Legal Clarity in a Tokenized Financial Future with Joshua Klayman

Ari Redbord (00:02):

I am Ari Redbord and this is TRM Talks. I'm Global Head of Policy at TRM Labs, we provide blockchain intelligence software to support law enforcement investigations and to help financial institutions and cryptocurrency businesses mitigate financial crime risk within the emerging digital asset economy. Prior to joining TRM spent 15 years in the US federal government, first as a prosecutor at the Department of Justice, and then as a Treasury Department official where I worked to safeguard the financial system against terrorist financiers, weapons of mass destruction, proliferators, drug kingpins, and other rogue actors. On TRM Talks, I sit down with business leaders, policymakers, investigators, and friends from across the crypto ecosystem who are working to build a safer financial system. On today's TRM Talks, I sit down with OG crypto lawyer, Josh Klayman.

(00:58):

But first, Inside the Lab, where I share data-driven insights from our blockchain intelligence team. Today's Inside the Lab is not brought to you by the Blockchain Intelligence team. It's brought to you by the Policy team. And we're discussing the recent New York Department of Financial Services guidance that now formally expects New York regulated banks doing virtual asset business to incorporate blockchain intelligence like TRM into their compliance programs. New York TFS is signaling that as banks increase exposure to crypto via customers, counterparties, or new products, they can't treat that exposure as fringe. They must proactively manage it. That means wallet screening, source of funds checks, holistic monitoring of third-party flows, and validating that behavior matches expectations, not just plugging gaps into legacy systems. What's changed here is the stakes. blockchain analytics is no longer optional for banks in New York. It's becoming a regulatory expectation.

(02:00):

At TRM, our goal is to meet institutions where they are, delivering tools, workflows, and governance frameworks so they can embed crypto risk visibility into their compliance stack. The coolest thing about this guidance is it builds on guidance from a couple of years ago that New York DFS issued for crypto firms. And what we're seeing here over the last several months is really mass institutional adoptions. New York financial institutions moving more and more into crypto space. This guidance by DFS signals to firms how to do it safely using blockchain intelligence.

(02:36):

And now, I sit down with Joshua Klayman. Josh, thank you so much for joining TRM Talks.

Joshua Klayman (02:45):

Oh, my pleasure. I've been dying to be on here.

Ari Redbord (02:48):

It's so funny. I've been dying to have you. In fact, as we were just about to jump on, I said, "I think that the first time I asked you, the conversation would've been about regulation by enforcement, and today it's going to be such a different conversation." As I said, you've been doing this for over a decade, which puts you in a very, very small, elite group of lawyers. Talk to me about your legal journey and how you ended up as a subject matter expert on digital assets and blockchain and cryptocurrency.

Joshua Klayman (03:11):

So I guess if we go back before the land before time to the start of my legal practice, I've been practicing for, at this point, almost 20 years. And my first decade of practice had nothing to do with crypto or even technology, except to the extent it might happen to have popped up. I was a finance and securities lawyer. I was a deal lawyer. I wasn't a regulatory lawyer. I just did deals. So basically what happened, I was doing deals and I started hearing about some of the big banks that I was representing on these leverage buyouts and other sorts of transactions that they were starting to have incubators and they were starting to think about smart contracts and they were starting to think about, I think this actually was in the press at the time about trying to reduce legal spend by using smart contracts and blockchain technology.

(04:00):

So when I first heard about this, it was more of a defensive reaction than an excited reaction. I mean, I had been practicing for a decade at that time and I started thinking, well, wait a minute, if we can automate this stuff, what am I doing? Is my entire practice going to be commoditized? So I started looking into it thinking I could pick out all these flaws of why we would continue to need lawyers, finance lawyers, securities lawyers. And I sort of ended up down this beautiful rabbit hole. I started going to meetups and conferences. I got some early clients in this space, and this is pre-ICO days. This is years before the ICO boom. And some of my early clients ended up being folks who launched what are now very large and well-developed ecosystems. They just had an idea or maybe they had a different business at the time that was crypto related.

(04:58):

Basically, I was fascinated because back in college, a long time ago, I was really interested in game theory. I was not interested in finance. Let's just make that 100% clear. I was interested in things like game theory. I wanted to be an actress and a singer and all these sorts of things, but I would sit in the bookstore, the Penn Bookstore and read about game theory. And when I started realizing, hey, this technology, it uses game theory, it uses also human behavior. So people are acting in their own self-interest, but this actually helps the security of the technology. I became fascinated, and of course it sort of dovetailed with the financing piece, but that's how I got into it. I then started running around my firm at the time. This was probably early 2015. I started running around literally the halls, and I'm sure I sounded a little bit like Chicken Little.

(05:49):

Oh my gosh, the sky is falling. The sky is falling. I was going to people in bankruptcy saying, "Hey, someday there will be crypto bankruptcies." I was going to people in litigation, all these sorts of practices. And I think the immediate reaction from some people, from some people it was really like, "Hey, this is really interesting." From other people, it was like, "Do you have enough work to do?

Ari Redbord (06:09):

Yeah.

Joshua Klayman (06:10):

You busy enough? Yeah. Do you need more work? But yeah, luckily after doing that for a bit, someone at my firm then basically said, "Okay, look into it. " And I took that as my mandate to start a practice and I didn't call it a practice group. At first, I called it a task force because I was trying to fit within the lines.

Ari Redbord (06:34):

What did that task force look like? Who were your clients typically?

Joshua Klayman (06:37):

Sure. So it varied. It really varied. And I would say some of the ones that you wouldn't think about, there were a lot of what are now crypto companies. So one of my earliest clients actually was Jae Kwon who had not created Cosmos yet.

Ari Redbord (06:54):

Sure. So from those early days, obviously, and it's really cool. I think one of the things we hear from former colleagues at Big Law now is that you can't take on early stage startups, crypto businesses just based on the fee structures and all this. It's great that you had the flexibility to be able to take on those types of clients who are probably pretty big clients for you today.

Joshua Klayman (07:12):

I think that's absolutely true. Luckily where I was at the time, we did have an ECVC practice, so emerging company venture capital practice. But I mean, some of the deals, they were larger deals. Put it into perspective, when Circle acquired Poloniex back in the day, which was a big deal back in the day, I represented the financing sources on that.

Ari Redbord (07:34):

Walk through this sort of growth there. As your practice evolved, it sounds like definitely deals were day one for you, but then has it evolved more into the regulatory or other areas of the law?

Joshua Klayman (07:45):

I would say my practice is heavily regulatory. It's more regulatory than deals at this point. I think it's, to my mind, nearly impossible to be in this space without having some regulatory overlay. And I think regulatory is one area where because of the nature of the work that I used to do, there weren't really unsolved questions. I remember being a first year and someone saying to me, a partner saying to me, "The last thing anyone needs, any client needs is a creative securities lawyer." Well, we know that that's totally has been turned on its head again and again in our space. So I would say from the beginning of my practice in crypto, I was already heavily involved in the regulatory because one of the important questions is, is it a security, meaning the tokens, the digital assets. And that's been a question since essentially day one. The answers and the perspectives of regulators have shifted and certainly legislators have shifted.

Ari Redbord (08:52):

Let's talk securities for a second. It feels a little old school right now, but would you just provide a little color into what you're talking about when you talk about that being the biggest question that the space has faced and how you've thought about it over the years?

Joshua Klayman (09:04):

Yeah. So the question when people initially, if we go back years and years ago, we're raising capital, right? They were having trouble at the time. They were struggling certain of these projects to get VC money. One of the things that emerged from that was this idea of doing crowdfunding and doing token sales. So people were saying, "Hey, you can have the network effects." The idea of these early projects was not to avoid the law. Actually, many of them were seeking out lawyers proactively and forming structures that they thought would be helpful. But one of the main questions was, okay, if we are actually having our users help us build and they actually use this computer code, is this different from say capital raising by selling stock? And there are many, many different permutations that these took and many different conversations. But one of the challenging pieces was this question of, is there a security?

(10:06):

Is a security being offered? In part because it restricted whom you could sell these digital assets to and what the requirements would be and what the requirements would be for resale. I would say in terms of how I've thought about this, I think for clients, I took a very conservative view. In the beginning, I was a little arguing for flexibility in articles and Lewis and I would co-write things saying, "Hey, we shouldn't be treating these digital assets as securities, computer code. There should be flexibility." Sometimes they may be security, sometimes they may not be. And one of the challenges with that was the Dow report itself. The paradigmatic example of what the SEC at the time fault was a security was about as security like as you could get, because the Dow involved a virtual venture fund. So when the SEC said, "Hey, this looks like they could have been selling a security." Lee Schneider had already written a memo about it years prior saying, "Yes, this is how you would think about whether a security exists." But I think as the SEC under Gary Gensler grew tighter and tighter, but even under Jay Clayton, I remember when he said something like every ICO looks like a securities offering, but under Gary Gensler, obviously the view became very dark.

(11:29):

And I think for advising clients, really trying to say, you should assume that you're dealing that this is a transaction in securities because otherwise you risk being subject to enforcement. Whether or not a court may agree, the regulator is going to take the position that there likely is a security.

Ari Redbord (11:49):

Where do you see the state of play today?

Joshua Klayman (11:51):

So I think it depends on whom you ask. I think that the likelihood of enforcement by the SEC for the sale of securities absent fraud or crime, I think that's quite low. I think there is a general understanding and view that the digital asset itself, unless it is expressly a security, for example, it represents equity and looks like a traditional security, but the digital asset itself is code and that most of what we think of as alt coins are not themselves securities where I think this gets a little tricky and one person who I've heard explain it really well is Jason Gottlieb from Morrison Cohen. He has said, "Look, the cases that actually made it through to a verdict, certain types Judge Torres said did involve the sale of security, others didn't." And that's tricky because that's still the law. And what we don't have, and this is also tricky for advising clients, for the cases that the SEC brought against trading platforms, naming a whole laundry list of tokens, those didn't result necessarily in a verdict, right?

(13:07):

They were stopped, which is great and we're happy that they were stopped, but it doesn't give us a lot of precedent to grab onto to say, "Here is a court that clearly squarely said that this digital asset is not security and we still have class actions that are learning, that are ongoing. We'll see how that plays out because plaintiff's lawyers are going to plaintiff's lawyer."

Ari Redbord (13:32):

I love that answer. And it's really the reason I ask the question because I think that there's this sense out there that these issues are resolved. But from a legal perspective where what you care about is legal precedent, I mean, it's really extraordinary to think about. All the cases we studied in law school all those years ago, now there are new cases being written that are going to have critical legal precedent, but they're not resolved. I mean, the White House wrote a 160-page report essentially telling the regulators to provide clarity to the industry and essentially do what they're doing today without waiting for Congress, but that's just this current regulator in this position. And as a lawyer, you're more a prognosticator right now saying, "This is what I believe the SEC would do or not do, " as opposed to like, "This is what the legal precedent says and we can rock and roll." Is that a fair sort of interpretation of where we are?

Joshua Klayman (14:21):

I think so. I think that we are continuing to work in the right direction. You can just see from the many amicus briefs that were submitted in connection with the cases against trading platforms that were withdrawn by the SEC. All of this work to educate judges so important, so important in order to get us to having case law that actually reflects the current regulatory position. But I think also we can't forget the states. We've got federal regulators who are, as you mentioned, who have been told to provide clarity, we have legislation in the works hopefully that will make even more clear when we're dealing with commodities versus securities, et cetera. There are many states that have a different view than our current administration and who have actually a critical view of the administration. So I think it's important, yes, we're moving in this direction, but when advising clients, I think there's a much more liberal in terms of what the universe of what you potentially can do, but I think it's important to explain to clients it's not riskless.

Ari Redbord (15:39):

Absolutely. And that's why, look, my dad has been a small town, New Jersey lawyer, solo practitioner for 50 plus years, and his clients are partners, they're friends, they're people that he sits down with and doesn't say like, "Hey, this is what the law says." It's like, "Hey, how can we enable your business in this way to do this thing safely?" And I feel like that's a lot of what you're doing today. It's the handholding of what are the risks that are worth taking? What are the risks not worth taking? I know there are so many issues. I mean, this is like the gorilla has always been the elephant in the room or whatever in terms of is it a security, is it not a security? What does the Howie test say about digital assets? But there are so many others. In my world, it's, "Hey, how should we think about the Bank Secrecy Act when it comes to centralized crypto firms, when it comes to decentralized finance?" What does IEEPA say and what are the implications there for sanctions? What are other issues for you that you're super focused on as you're advising clients today? What do they want to talk with you about?

Joshua Klayman (16:36):

I would say this year has not only been a year for crypto, it's been a year for the banks whether it's a crypto native bank, but also traditional banks, global banks. So I think some of the things that I've worked on this year, we represented SoCGen Forge and SoCGen on the first issuance by a global bank of a US dollar-backed stablecoin available on public blockchains and digital asset exchanges. So that was a landmark transaction. I'm advising global banks on the rollout of margin lending programs secured by certain digital assets, which involves the UCC, but also banks are fascinated in stablecoins, but also just tokenization in general. So tokenized collateral has been a huge focus, tokenized securities, also frankly, trade finance and the impact of blockchain, which is so funny to me to see because trade finance, if we go back to 2015, 2016, that's what I would've predicted would've been the leading edge because it's so paper intensive. There's so many things that blockchain technology can help with, and now large global banks are really interested in the impact on trade finance all of a sudden. So I think these are some of the big things.

Ari Redbord (18:02):

It's really extraordinary. And I'll say we're having the really same experience. I would say a year ago, if you asked me how I'm spending my time, it was probably 75% with law enforcement and regulators globally working with them on how to do investigations and how to do compliance or how to supervise the industry. Today it's flipped. I'd say 75% of my time we've been spending with banks and financial institutions. What we get oftentimes is, "Hey, we see everyone doing this or talking about it. We've seen the Genius Act, we're studying it." Those groups within large banks that were, kind of, here's a lot of talking over the years are now looking to execute and operationalize. So they're coming to you. So this is not legal advice, but let's give a little free legal advice here. What does that conversation look like? Walk me through that conversation.

Joshua Klayman (18:45):

Well, I would say one of the first questions that we often get, and this also comes from foreign governments. People hear about, say, GENIUS, and then they say, okay, so what do we do? What do we say? What can we do? So one of the first things that we have to say is, "Hey, this hasn't been fully implemented yet. We still need to have the implementation of rules and regulations. There's a lot to go." And then even then there's a phase-in period. So this is a big point of discussion because people think, okay, well, we have GENIUS when some other countries, and frankly, businesses from outside the US who now want to come into the US or who may want to launch a US dollar backed stablecoin or something like that, they expect that there will be a whole list of specific things for them to do because that's somehow how laws and other countries work.

(19:39):

For us, we have a framework now, but we need to still develop this framework. Okay, I can give you the broad brush strokes of what that means, but we're not going to fully know. I think another thing that comes up is explaining, okay, well, if you have a stablecoin, a permitted payment stablecoin, it's not going to be a commodity, it's not going to be a security. And all these things are going to be more clear in the future when we have market structure. So trying to tie that in and let people know we do have GENIUS, but it's not completely divorced from the market structure legislation that will come down. It's supplemental. And I think also explaining, look, notwithstanding that we have GENIUS, we also have the bank lobby and many others who have views about how things should be changed. So trying to explain almost from a political perspective what the various views are and also explaining the state path, the federal path, different options under GENIUS.

(20:37):

Now, just thinking about tokenization more generally, and of course, tokenized deposits are intentionally outside of GENIUS, but really when we think about tokenization in general and tokenized securities, I think that leads us down a whole other path because there's a question when we talk about tokenization generally, and whether it's tokenized, collateral, whatever it is, an important thing to understand is what is the client actually thinking is happening here? Are they thinking that their actual equity is going to be replaced and only be issued via a token? Or is this token going to track the price or attempt to track the price? There also are questions about are we trying to dematerialize this thing entirely? Meaning is there going to be some kind of paper or document that still exists that is somehow stapled so that the rights come together? Or are we just literally saying if we have a digital bond, hypothetically, it's just digital.

(21:39):

Or when we think about for the future tokenized treasuries, is it just going to be a digital asset? Is there anything off-chain that's existing? And if so, what? Sometimes when we're talking them through from a business perspective or a marketing perspective, there's a lot of, "Oh, we've tokenized these stocks." And then when you try and actually peel it back to see, well, what's actually happening, you have to ask them different questions. And it's not always clear certain blockchains, certain protocols and groups, ecosystems, they will say, "Well, we want to be a place. We want to enable companies and organizations to tokenize their equity, or we want to be able to help them do X, Y, or Z or be a place for them, a home." And you kind of get back to, "Okay, so again, are we tokenizing their equity? Is that what we're trying to do here or is this another ICO?" Just under a different name.

(22:38):

And so I think that when you're asking what kinds of questions or what kinds of things come up, these are very important architectural questions that are tougher than they seem.

Ari Redbord (22:49):

This is amazing. I feel like you're building the checklist for what lawyers should be asking their clients when they come in for that first meeting. Please keep going. This is amazing. Let's go full lawyer.

Joshua Klayman (22:58):

Okay. So first of all, the uniform commercial code, it's like a model. So each state, to the extent it has adopted it or adopted different parts of it has its own version and not all of them follow what is recommended. One of the things that people may be aware of is in 2022, although Wyoming went first with this before the 2022 amendments were proposed to the UCC, Wyoming actually amended the UCC to add an Article 12 to deal with digital assets. But in 2022, there was a recommendation by the Uniform Law Commission to have a new UCC Article 12 that would deal with controllable electronic records, which includes digital assets, and then some conforming amendments to certain other articles of the UCC like Article 8, which involves financial assets and investment securities and also Article 9, which deals general intangibles. And they also amend other sections of the UCC that would be relevant, say, for people interested in trade finance.

(23:59):

Now, these have been adopted in certain states. They just got signed into law just a few weeks ago in New York, these 2022 amendments at the end of 2025. So imagine we have this new UCC Article 12 that's supposed to be helpful for purposes of crypto assets. However, you have to think about the way that custodians, how they're holding digital assets. What legal regimes do they use for purposes often of trying to ensure insolvency protection, such that the digital assets that are held by them would be treated as customer digital assets and not treated in a bankruptcy situation as being part of the platform's assets. A lot of them opt in to UCC Article 8 and they say, "Hey, we're acting as a securities intermediary." These are financial assets, which is a term of art, right? And this is a securities account. Distinguish this, of course, from US securities laws, right?

(25:00):

This is purely for property purposes and in this case for trying to say we're holding these on behalf of customers. Now, what that means is that the customer often has a securities entitlement in these financial assets and legal title is with the custodian. Why does this matter? I mean, you still have a beneficial interest in your digital asset, but just mechanically, this is the same way, for example, that DTCC holds traditional securities in fungible bulk. Now, think about the fact that if you're going to grant a security interest in something that you own, you can only grant a security interest in something that you have rights to. If at this time you only, you being the customer, only have a securities entitlement to your financial assets, to your crypto assets. You cannot grant a security interest in all of the stuff because you're already in an Article 8 regime.

(25:58):

So UCC Article 12 and UCC Article 8, in my view, does not necessarily contemplate the digital assets are being held in omnibus wallets by third party custodians.

Ari Redbord (26:11):

Obviously it's still early here, but how are you seeing this play out in the real world?

Joshua Klayman (26:15):

So the way I'm seeing it play out is that notwithstanding that jurisdictions like South Dakota or now New York, that they have adopted Article 12, people are still choosing for these secure transactions frequently to opt into Article 8. That's the way we were doing things to avoid Article 9. We were doing that before the 2022 amendments. One of the other challenges about Article 12 is that it contains its own choice of law. This means that for different types of digital assets, the default would be if say you have the Ethereum blockchain. That blockchain does not say, "We choose the law of Spain."

(26:56):

But it could. And if it did, then UCC Article 12 would say, "Okay, we look to Spain." If it doesn't say anything, it says, "Okay, we looked to the laws of Washington DC, which has adopted UCC Article 12." Where this becomes a little weird is, you may have digital assets of different sorts, and on day one, it might not have chosen a law. On day 12, it might've chosen a law. On year 12, it might've chosen a law, and different digital assets may have different governing laws. So what this means is you could have a control agreement that is governed by a particular jurisdiction, and you could have a security agreement, credit agreements all in this specific jurisdiction, and yet the choice of law for Article 12 has you going all over the place. If you're a bank and you want a legal opinion, there's choice of law, there's conflicts of law, and then you might have a deal that's in New York with New York lawyers, and then you need all these other lawyers to give opinions about these laws.

Ari Redbord (27:56):

This sounds like it needs much more than a legal precedent fix. A court's not going to solve this ultimately. I know there are a ton of young lawyers who are watching this sort of saying to themselves, "I want to be a crypto lawyer. I want to do this work." What advice do you give to them about what they should be doing, what they should be learning?

Joshua Klayman (28:12):

I mean, this is a super exciting time, I would say, to enter the space because it's mature enough and yet it's still young. So if you are following along, you're going to know more than someone who wasn't looking at the news for a week. I personally, I look at LinkedIn the most. I also look at publications in our space like CoinDesk. I've learned so much on LinkedIn, frankly, following friends. I think also though, once you are involved in deals and representing clients, you learn things in different ways because you start hearing them multiple times in multiple directions or you're researching that way. The reason I was framing this as being a maturing space is that pretty much if you become really deep in an area, there is going to be a way to work it into digital assets. So my advice would be get really good at an area of the law and learn the tech.

Ari Redbord (29:10):

I love the answer really. And I think for years I've thought people say, "I'm a sports lawyer. I'm an entertainment lawyer." And really what that means is you need to be the very best contracts lawyer if you're going to represent athletes. You need to be the very best real estate lawyer if you're going to do deals for theaters on Broadway. And obviously I famously agree on the LinkedIn comment, but also actions from regulators is something I say all the time.

Joshua Klayman (29:32):

 Oh, 100%.

Ari Redbord (29:32):

Look at what they're writing. In my world, it's like anything FinCEN puts out in terms of an enforcement action or guidance, read every word of it because they're previewing how they're really thinking about these things, OFAC, et cetera. But I mean, oh my gosh, 163-page White House report, read every word.

Joshua Klayman (29:47):

Yeah. I mean, and the cool thing is unlike when you're in law school and you're just reading a dry text or briefing cases or something or whatever it is you do back in law school, these are stories. Yes. That's what I have loved about our space so much is the stories, the stories of individuals, the stories of companies. Watching things evolve and watching the law unfold, it is a narrative. It's like a drama. Sometimes it's a comedy. Sometimes it's a tragedy. Every day is exciting and new in our space. And there are so many of like, some of my best friends in the world are from our space and I feel like I have a life of the mind because of our space.

Ari Redbord (30:30):

What you just said really resonated with me and it was quite frankly, beautiful. Any other tips for people that you would provide?

Joshua Klayman (30:35):

Another thing I would say, and this may be a strength that people have or something that they can nurse or grow, is questions about economics generally and also understanding payments flows. Whether this is your actual, you think it's your practice or not. When you start getting into helping a client commercialize or build a project, it's important, of course, that something be legally compliant, but it's also important that it be commercially viable. And part of that, you have to think about the various industries. Understanding that actually when you move from one currency to another currency, a lot of times there's no direct exchange and it goes back into dollars. Some people are like, "Yeah, duh, Josh." But for me, I didn't know this. And so learning this, understanding how market makers work, not just in crypto, but just in real life, this is extremely helpful for people who are trying to advise in this space.

(31:36):

If you have this strength, it is needed. If you have knowledge of this type, this is something where I think not a lot of crypto lawyers do.

Ari Redbord (31:45):

What I love about you actually is that this is not just a job, but it is part of your life. It's a hobby. It's an interest. It's like what you deeply care about. But what other hobbies, interests off-chain are you sort of most focused on? How do you relax?

Joshua Klayman (32:00):

How do I relax? Well, I know you're a runner. I'm not a runner, but I am a serious lover of walks.

Ari Redbord (32:10):

Amazing.

Joshua Klayman (32:11):

With music, I try and walk a lot. I feel like it helps me process things I'm thinking of. I'm not even consciously thinking of them. I'm listening to some song and somehow I get an idea or I figure it out.

Ari Redbord (32:24):

What type of music do you listen to?

Joshua Klayman (32:26):

I listen to some of everything I would say except for ... I used to say except for country, but then I actually found that some of the…

Ari Redbord (32:33):

I'm a big country music guy. You mentioned an interest in theater and singing when we first started the podcast. Tell me about that.

Joshua Klayman (32:41):

So yes, that was my, I would say my first love. I thought that I would be an actress and a singer and I wrote songs. I don't really write them now, but I thought that was what I felt most alive doing. But I moved away from that because I ended up ... I had my first child when I was in college, rather unexpectedly. So I've been a mom since I was in my teens. And so when I was having her, I thought, "You know what? Maybe I shouldn't become a starving artist because that's all and good for me, but maybe I shouldn't have a baby starving too." So that's how I started. I pivoted and I ended up, like I said, in the Penn Bookstore reading a lot about game theory, but then becoming a finance lawyer. Yeah. So that's one of the things that still excites me.

(33:30):

I love singing. You can hear me singing all the time. It's not particularly good anymore, but my children, and I've got five kids and my children, not necessarily the oldest one, but the younger ones, they're very into singing and acting. And so I would say that's something that I see now through them.

Ari Redbord (33:54):

To that end and getting a little bit personal, I think one thing people struggle with all the time is how you've built this extraordinary career as a high-powered lawyer in a really evolving space that it's 24/7. You're a mom, you have five kids. I know there's no balance. It's just integration and all these other things. How have you figured that out?

Joshua Klayman (34:14):

Yeah, I mean, I think the other sort of analogy that I sometimes use is, I guess, surfing. Even though if you know me at all, you know I don't know how to surf. But I imagine myself surfing and I imagine, because I do love the beach, I do love the water and nature. And I always think to myself, okay, so someday you're surfing, riding the wave, doing your thing. And then other days that wave is just going to crash over you, so you really have to love the water. And that's what I think. Those are the two images that I have. One is integration. My friends, my life of the mind, all these things are also my work. My clients are my friends. Regulators I feel like are my friends in many cases, and hopefully they feel the same way. The other part is just that I love the water, I love the industry, and not every day is going to be your day.

(35:07):

Not everything's going to go your way. And the thing is, I just feel so lucky every day to be in this space. And that's what I've found, is I feel incredibly grateful to have found this space and found something that I love that changes enough that it's not the same every day and every year.

Ari Redbord (35:27):

It's amazing. Well, I feel so grateful to be in this space with you and have for a really long time. So grateful to have you on TRM Talks. Thank you so much for taking the time.

Joshua Klayman (35:34):

My pleasure. Thank you for having me on.

Ari Redbord (35:42):

So that was exactly why I've wanted Josh to come on for so long. I think that when I asked the nuts and bolts question in particular like, "Hey, walk me through." A client of a large financial institution is coming into your office today. What is the checklist of questions you're asking them? And we heard about going deep into their project from a tech perspective. We heard about going deep on the regulations, her explanation of the UCC and why a Section 8 versus 12 is so critical, the differences between South Dakota and Wyoming and New York. That is the deep expertise why we want to have one of the foremost crypto lawyers in the space. Another thing that was really just extraordinary to me was just all of the shoutouts to really the lawyers that have been doing this for so long in the space, the Jason Gottliebs, the Lewis Cohens.

(36:26):

And when people ask me who to read, the white papers, the posts on LinkedIn and on X, it's those exact people. So super honored to have Josh here to really, really provide a lawyer's opinion on how the space is growing and how to advise clients.

(36:47):

On the next TRM Talks, I sit down with Chainlink's Head of Public Policy, Adam Minehardt. If you love the show, leave a review wherever you're listening to it. Follow us on LinkedIn to subscribe to our newsletter, the weekly Roundup, to get the latest news on crypto regulation, compliance, and investigations.

TRM Talks (37:11):

TRM Talks is brought to you by TRM Labs, the leading provider of blockchain intelligence and anti-money laundering software. This episode was produced in partnership with Voltage Productions. The music for this show was provided by iKOLIKS.

Ari Redbord (37:27):

Now, let's get back to building.