Latest / Connecting the Dots / New Market Watchdogs, TikTok’s U.S. Reset, and the Rise of Prediction Trading

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New Market Watchdogs, TikTok’s U.S. Reset, and the Rise of Prediction Trading · Connecting the Dots

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  Today's tech news moves fast, but understanding
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  it shouldn't be hard. That's why Snarful Solutions
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  Group brings you Connecting the Dots, where we
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  break down what's happening in tech and why it
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  matters to you. Now, let's dive in with your
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  hosts. Welcome to Connecting the Dots. I'm Alex.
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  And I'm Morgan. It is Friday, December 19th,
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  2025. And today, we are looking at this... massive
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  collision of forces we saw this week. We're talking
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  federal regulation, national security, and, well,
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  the financialization of just about everything.
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  Happy Friday. It was a huge week, you're right,
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  especially for the future of digital finance
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  here in the U .S. So before we get into the nitty
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  -gritty of regulatory appointments and these
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  massive corporate deals, let's get a quick check
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  on what's happening outside the studio. Yeah,
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  let's do it. And the weather is... Interesting
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  today. It really speaks to divergence. Nationally,
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  there are these extreme fire weather concerns
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  across the plains. Oh, wow. Yeah, really strong
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  winds, low humidity in places like Colorado and
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  Wyoming. But then you look at the East Coast
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  and a huge cold front is moving through. Heavy
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  rain, strong winds, and the beginning of some
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  serious lake effects now. So two totally different
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  worlds happening at once. Exactly. And we kind
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  of saw that in the markets, too, though the overall
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  direction was, well, it was up. The major index
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  is closed in the green yesterday. But the real
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  story, the real energy, was somewhere else. Right.
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  The Dow Jones had a good day, a respectable gain,
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  up what? About 182 points, closing at 48 ,157.
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  And the S &P 500, followed suit, was also up,
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  gained about 15 points to close at 6 ,807. But
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  you mentioned that energy, and it was all flowing
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  into digital assets, which, you know. ties directly
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  into our first big story. Absolutely. Bitcoin
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  had a seriously strong day. It jumped over $2
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  ,300. Wow. Yeah, it's a 2 .73 % jump in one day.
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  It closed out the week at an eye -watering $87
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  ,796. And this kind of growth, this kind of market
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  movement, it's forcing regulators to pay attention.
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  Which is the perfect lead -in. But first, a quick
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  them out today at oldglory .com. Okay, let's
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  jump into the Morningstar report, starting with
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  the biggest piece of regulatory news all week.
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  We're calling this one the new sheriff in town.
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  The U .S. Senate late Thursday night confirmed
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  Michael Selig as the new chairman of the Commodity
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  Futures Trading Commission, the CFTC. Travis
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  Hill for the FDIC was also confirmed. And this
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  is so much more than just a standard appointment.
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  I mean, sure, the FDIC is always big news. It
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  handles bank stability, but the CFTC, that's
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  different. Right. They traditionally handle the
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  really obscure stuff, right? Like swaps and derivatives.
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  Exactly. It's the agency that was designed for
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  the, let's be honest, boring financial plumbing.
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  But things are not boring anymore. No, not at
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  all. We've seen lawmakers signaling a huge shift
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  in what the CFTC is going to be responsible for.
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  That's the key. Sillig is taking the helm at
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  what one senator called a critical moment. And
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  that's because Congress is seriously considering
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  giving the CFTC primary oversight of two massive,
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  and I mean massive, growing sectors. And these
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  are two sectors that have been operating in a
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  sort of gray zone for years. Totally. First,
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  you've got the entire digital assets industry,
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  so crypto. And second, this burgeoning new world
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  of prediction markets. OK, so this is a huge
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  deal for the crypto world. They've wanted this
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  for a long time, haven't they? Oh, for years.
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  They have been arguing that they should be regulated
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  by the CFTC, not the SEC. And why is that? What's
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  the big difference? It really boils down to regulatory
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  philosophy. The SEC, the Securities and Exchange
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  Commission, tends to be very prescriptive. They
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  ask, is this thing a security? And if the answer
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  is yes, they hit you with, you know, 50 years
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  of very complex, very strict rules. And the industry
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  sees them as just focused on enforcement actions.
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  Yeah. It's stackily punitive. The CFTC, on the
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  other hand, historically uses what's called a
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  principles -based approach. So they regulate
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  markets based on big ideas, like consumer protection
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  and market stability, not by defining every single
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  asset. So for something new and fast moving like
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  crypto, that's a much more flexible system. It
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  lets them innovate. That's the hope. And Seelig's
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  confirmation is a huge signal that Washington
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  is taking that preference seriously. The guy
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  is uniquely qualified, too. He's not an outsider.
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  He came from the SEC, right? Yep. He was a senior
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  official working directly on crypto policy at
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  the SEC. He was part of something called Project
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  Crypto. Project Crypto. That sounds intense.
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  Was that about cracking down on it? Actually,
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  no, just the opposite. It was explicitly about
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  understanding the space to establish more friendly
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  policies. Things like regulatory sandboxes, clarifying
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  definitions, really trying to encourage the industry
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  to operate legitimately here in the U .S. Okay,
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  but doesn't that raise some flags? I mean, is
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  he maybe too friendly with the industry he's
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  now supposed to be policing? That's a fair question,
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  and it definitely came up in his confirmation
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  hearings. But his supporters argue that his hands
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  -on experience is what's needed. He knows how
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  this stuff actually works. So he can set clear
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  rules without just killing innovation. That's
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  the idea. And the industry's reaction tells you
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  everything. The CEO of the digital chamber called
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  his confirmation a great sign. They believe he'll
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  help build a durable market here, not just create
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  more gridlock. So the Boring Agency is about
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  to become the center of the universe for modern
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  finance. Pretty much. And we'll see that play
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  out with prediction markets later. But first,
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  let's pivot from financial regulation to Well,
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  national security and the saga that is TikTok.
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  Ah, yes. The app that's been a geopolitical football
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  for, what, five years now? It feels like it.
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  Well, that game might finally be over. Or at
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  least in the final quarter. ByteDance, TikTok's
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  Chinese owner, signed binding agreements on Thursday
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  to hand over control of the US operations to
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  American investors. Yeah, and I think control
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  needs to be in giant air quotes there. This is
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  probably the most fascinating story of the week,
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  because the devil is in every single detail.
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  This is not a simple sale. It looks really convoluted.
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  It's a corporate structure that looks like it
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  was drawn up on a cocktail napkin. OK, so break
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  it down for us. What's the new company and who
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  owns what? So the new entity is called the TikTok
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  USDS Joint Venture LLC. On paper, the ownership
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  looks simple. American and global investors,
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  Oracle, Silver Lake, MGX, they get the majority
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  stake 80 .1%. Okay, so ByteDance keeps the other
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  19 .9%. Right. Majority American ownership. That
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  sounds like a clear win for the U .S. National
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  Security Hawks. On paper, yes, but this is where
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  that functional split comes in. Think of TikTok
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  as a giant airplane. The 80 .1 % owners, led
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  by Oracle, they get custody of the plane's security
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  systems. Data protection, algorithm security,
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  content moderation, software assurance, all the
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  regulatory stuff. Oracle is the trusted security
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  partner, auditing everything. So they make sure
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  the plane isn't flying into restricted airspace,
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  basically. Precisely. However, the 19 .9 % minority
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  stake, the part ByteDance keeps. they still control
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  the core revenue drivers. You're kidding. Nope.
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  They own the tickets, the in -flight e -commerce,
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  the advertising contracts. They control the cash
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  register. Wow. That's an incredible separation
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  of power. It's like a corporate divorce, where
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  one parent gets the sensitive files and regulatory
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  duties, but the other parent keeps control of
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  the family business that brings in all the money.
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  That's a great analogy, and it's so important
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  because it means ByteDance still has the core
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  incentive to keep the platform profitable and
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  growing. If the American investors had full control
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  of e -commerce and ads, what incentive would
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  ByteDance have to cooperate? This way, they can
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  keep profiting from their tech genius while theoretically
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  walling off U .S. data. But the algorithm is
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  the whole thing. It's the secret sauce. How can
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  the U .S. side audit the algorithm if ByteDance
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  still controls it for global interoperability?
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  That is the multi -billion dollar question. And
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  the agreement is apparently very vague on that
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  point. We don't know if it was transferred, licensed,
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  or is just being monitored in real time by Oracle.
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  And auditing a constantly learning global algorithm
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  sounds maybe impossible. It's an immense technical
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  challenge, that's for sure. The big worry is
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  that the parent company could still subtly tweak
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  it to favor certain political narratives or products
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  for US users. And politically, this whole deal
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  looks a lot like the one the Trump administration
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  tried to broker back in 2020. With Oracle's CEO
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  being so close to the former president, that
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  just adds another layer of scrutiny. It's a colossal
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  deal, about $14 billion, that really just does
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  the bare minimum to keep the app running in the
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  US. The big takeaway for you is that the era
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  of simple tech companies is just over. There
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  are now these complex multinational entities
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  defined by geopolitical compromise. Okay, so
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  we've got a new regulator for digital assets,
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  a social media giant split apart by national
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  security. Let's connect those dots back to the
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  CFTC with our third story. The race into prediction
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  markets is heating up. And this is where that
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  boring old derivatives regulator smashes right
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  into Vegas -style gaming. It is a massive collision.
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  It really is. DraftKings, which is already a
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  giant in sports betting, just launched DraftKings
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  Predictions. It's a new standalone app and web
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  product. This is their big formal entry into
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  prediction markets. And they are making a huge
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  regulatory statement right out of the gate with
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  this launch. What do you mean? The platform lets
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  customers in 38 states trade contracts on real
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  -world outcomes. You know, sports, finance, to
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  start. But the key thing is that DraftKings is
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  explicitly launching it under the oversight of...
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  Me guess. The CFTC. The U .S. Commodity Futures
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  Trading Commission. Exactly. That is a bold move.
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  They're really forcing the issue. So just for
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  clarity, what is a prediction contract on this
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  platform? Is it just a bet? Well, they would
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  say no. It's basically a financial instrument
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  based on a binary outcome. So instead of betting
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  $100 on the Lakers to win, you're trading a contract
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  that pays out, say, $10 if it settles, yes, the
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  Lakers win. You're treating the expectation of
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  an event. And because you can buy and sell that
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  contract before the game ends, they argue it's
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  a commodity, not a gamble. That's the argument.
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  A bet on a price, not an outcome. Okay, so why
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  is that distinction so important to DraftKings?
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  Why claim it's a commodity under the federal
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  CFTC? Because it's all about jurisdiction and
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  money. If it's a federal commodity, they only
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  have to deal with one regulator, the CFTC, now
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  headed by Michael Selig. They get to bypass all
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  the state -by -state gaming licenses. Which unlocks
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  markets in states where sports betting isn't
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  even legal. Precisely. You're talking about massive
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  states. California, Florida, Georgia, Texas.
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  These are huge, untapped revenue pools. This
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  is why analysts are estimating this whole space
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  is a $5 billion total addressable market. But
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  I don't get it. If they're trading contracts
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  on whether the Yankees will win a game, how can
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  a state regulator in New York not just say, that's
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  an illegal sports bet, stop? And that is the
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  conflict. It's already boiling over. State gaming
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  regulators are furious. They see this as an illegal
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  sports bet disguised as a commodity. We've already
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  seen states trying to revoke licenses over this.
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  Arizona tried to pull underdog's license specifically
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  because of their prediction market product. So
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  DraftKings is knowingly risking its profitable
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  sports betting operations in all these states.
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  Just to get into this new market, that is a huge
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  gamble on the future. It's a massive, high -risk,
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  high -reward play. But they're joining companies
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  like Kalshi and Polymarket, who are all racing
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  to grab a piece of that $5 billion pie. By launching
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  now, they are guaranteeing that the courts, probably
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  the Supreme Court, eventually will have to decide
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  this. Does federal commodities law override state
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  gaming law? it forces the issue. So we've got
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  the new CFTC chair ready to regulate what looks
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  like financialized games, a social media giant
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  split by national security, and a gaming company
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  launching a financial product to get around state
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  law. It all comes back to that convergence. Absolutely.
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  The three are now completely inseparable. Before
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  purchase. The website is sconee .com. So to quickly
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  recap our three stories today. First, we saw
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  the confirmation of Michael Sillig to the CFTC.
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  This signals a huge regulatory shift, putting
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  an agency the industry actually prefers in charge
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  of both crypto and prediction markets. Right.
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  And second, TikTok resolved its years -long national
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  security drama with this incredibly complex $14
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  billion ownership split. It separates regulatory
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  control from the money -making parts, but leaves
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  that big question about algorithmic influence
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  still hanging out there. And finally, Draft King's
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  predictions launched, which just intensified
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  this whole battle over prediction markets. It's
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  forcing a direct showdown between federal law
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  and state law, all for a shot at that $5 billion
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  market in non -bedding states. So what does this
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  all mean for you? Well, when financial tools
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  start to look more and more like games, and social
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  media apps become these complex multinational
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  financial entities, you're witnessing the complete
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  convergence of tech, finance, and entertainment.
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  The provocative question for the weekend is this.
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  If a commodity can be a game and an app can be
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  a security threat, can our century -old regulatory
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  structures possibly keep up? That's something
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  to mull over. The speed of innovation is definitely
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  outpacing the speed of legislation. We're seeing
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  the consequences of that play out in real time.
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  We're here to help at Snarful, so reach out on
• 14:12
  our website if you have any more questions. That's
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  a wrap on today's top stories. Remember, tech
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  doesn't have to be complicated, and we're here
• 14:23
  to help connect the dots. If you've got questions
• 14:26
  or want to learn more, visit us at snarful .com.
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  Thanks for listening, and we'll catch you next
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  time.