Hello and welcome to the messy middle. It's your favorite podcast that covers law, tech, the world of work with a little bit of fun and pop culture mixed in. I am your host, the chief global affairs and legal officer here at LinkedIn, Mr. Blake Lot. With me, I have some friends on my right here. I got my chief of staff, Mindy Hepburger. How we doing, Mindy?
Doing well, Blake. How are you?
Pretty good. So, now we're going to revisit for those of you who listened to our first podcast. I checked in with you on your excitement scale. So, we're going to go back to the excitement scale. On the first episode, you were a solid three out of 10. Where are we at today?
Same. Okay. Okay. Well, one of these days we're going to... well, we'll probably stay there the whole time, honestly. But I'm going to go to my left here. I got my producer, Mr. Michael Hughes. Hi, Mike.
I'm going to answer for myself.
Oh, please do. Just jump right in there.
Yeah. Yeah. I'm doing well.
Okay. You're doing well. So, today we got a great guest with us. We have the chief legal officer of Coinbase, Paul Grewal, joining us. And look, some people they say that cryptocurrencies, it's just kind of like gambling. So I thought it would be good for us to talk a little bit about our own personal experiences with gambling. Mike, you a gambler? Have you seen... first of all, have you seen the Kenny Rogers movie, The Gambler?
I did not even know it was a movie, but I do love the song.
You do love the song. Do you know when to hold them?
I do. And when to fold them.
Okay. So, what is your personal experience then with gambling, because you clearly know the Kenny Rogers stuff.
Yes. Not profitable but immensely enjoyable.
Okay. So, what are some of the ways that you've lost at gambling?
Oh, pick a table game that's in a casino, probably losing. I have played baccarat, which I don't really know how to play.
I also heard it's the best odds in the casino.
I think it helps if you know how to play the game. That helps.
Well, you got to get closest to nine. I know roughly how to play, but I don't know like a strategy for it. So, I'm just hoping, you know, luck is on my side there.
So, you're like an amiable gambler.
I'm an amiable gambler. Like, I enjoy blackjack. I think there's a little bit of thinking involved there. Like, I like craps. I know how to play that. I don't really understand how someone can win over the long term with it. And then I've dabbled in sports betting.
Dabbled in sports. Well, I think we'll get more into that later on today, but we're gonna head over to Mindy here. Mindy, how about you? You like to throw the money down a little gambly?
I'm not a gambler. I mean, I'd play enough to get the free drinks.
Spend the least amount of money and still get the free drinks and have a good night, but that's about it.
Okay. So you're looking at like where's the slots?
Yeah. Slots, or like the cheapest table.
Yes. And now there is no such thing as a cheap table anymore. You go to Vegas. Like unless you're like a $50 drink or something, it's trouble.
You can go up to... I mean if you go up to Nevada state line.
Tahoe. You can play for less.
Play for less. And that's what you're targeting.
That's what I'm targeting. I feel like life is enough of a gamble that I don't need to go do it.
Oh, that was deep. That was deep. I agree. I agree. Life is a gamble.
What about you, Blake? What is your personal experience with gambling?
Lot of poker in college. A lot of poker in college. Like in the dorm room, there was many many hours. And I didn't lose, but I didn't win. Well, I lost. We had one Rob, my roommate basically. We funded, you know, at least his social life, his books, you know, I'd say his travel.
And now poker in the sense of like today where it's like Texas Holdem or were you playing like stud and stuff?
Definitely stud. We would play guts. A lot of guts.
I don't know if you know that one. I don't think I know that.
It's like a matching pot game and used to get... but like basically if you're in college you can kill the hours there if you have a... and we had a keggerator in the room as well. Yes. So keggerator poker many many many hours. And led me to really be able to embrace disappointment in life when it happens.
Yeah. You can embrace failure early.
Exactly. I learned how to get over that. That and probability. Mindy knows I do math in my head all the time.
So that's all from gambling.
That's pretty good. And but no table games for you. That was in college. Now you're done.
Rare. No. No. Yeah. I've... actually when I played poker in casinos I tend to win but that's again it was Rob's fault. The guy was a very very good poker player. So we basically funded most of his enjoyment in college. But look, that's just one aspect of ourselves with gambling. And you know what we need to do is we need to talk to our buddy Paul, talk to him about cryptocurrencies and whether or not it is or isn't gambling. Because look, on the one hand when it comes to cryptocurrency there's definitely some folks who think it's just rampant speculation and should be banned and other people who think it's the finance of the future. The truth I think it's somewhere in the messy middle but we're going to need to ask our friend Paul Grewal. Paul Grewal, welcome Paul.
Thank you, sir. It's great to be on with you.
So, thanks for coming on and mixing it up with us here. We usually like to start, it is a LinkedIn podcast, so we like to start a little bit on... with career journey with our friends. Now, I know that, you know, you did a bunch of stuff, then you went to law school, you became a law firm partner. We all know that nobody cares about law firm partners. So, let's start the story after that, and where you became a magistrate judge. And so how does one actually become a magistrate judge? Like do you have to... how much do you have to network? Do you have to... is it about who you know or how does that process work?
Well, first of all thank you again for having me and I will say talking career journey with the senior executive at LinkedIn is a bit intimidating. So I will do my best. That's... I'm also going to stare at you like very intimidating fashion. So there we go.
Look, the process and path to becoming a magistrate judge is both highly formal and extremely informal in a couple different ways. The formal path is you apply like any other job.
Oh, I didn't realize that.
Yeah. Because unlike most federal trial court judges who are nominated by the president, confirmed by the Senate and serve for life, magistrate judges are actually appointees of the court themselves. And so what happens is when there is an opening on a district court like for example the Northern District of California where I serve, there's official notice posted, there are qualifications laid out and you submit a written application to kick off the process. That's how it works formally. The less formal, maybe even informal part of the process is that by the time you get to sort of the final list of candidates, in most cases it's a group of five, six or seven people. You're talking about people all of whom could do the job and do the job very well, I'm sure. And so I think part of it is, you know, who the sitting judges are most comfortable with, who they're most excited about, and maybe even a little bit, you know, who they know from previous experience. So it's all that wrapped up into one big question. Honestly, not so different than a lot of jobs, right?
And then when did you have... did you have a judicial philosophy? Anything that for... I'm not sure... if you're on the Supreme Court you are Scalia and you are originalists. If you're a magistrate, do magistrate judges have judicial philosophies? Did you have one?
Um, I'm sure some magistrate judges have a judicial philosophy. I'm not sure I ever found mine.
Yeah. And the reason for that is, you know, 98.6% of the cases and controversies that come into any court including a federal district court presided over by a magistrate judge don't really involve politics or philosophy. It's really about taking the law, applying it to the facts and making calls. And so the circumstances where I think one's philosophy could present itself or form are actually pretty far and few between.
Yeah. Interesting. So your career journey went on and you left and it's somewhat like I remember when I heard about... at the time I was interested and surprised you left the bench and you went to Facebook and sort of led litigation, regulatory, a bunch of things that was like had overlap with what I was doing at the time. And I'm curious at the time like you were there at a pretty interesting time and it changed over time. When you joined, did people still think of Facebook as the good guys? And was it different inside the company versus outside the company? Did it change for either one of those at the time you were there? And how did that affect your job?
Well, after about six years, give or take, on the bench, I looked at people like you, Blake, and frankly, it looked like you were having a lot of fun.
Yeah. And still do, right?
And you know, I was at a point where I hadn't accomplished everything I maybe could have as a judge, but I felt like I had done a lot and done maybe even more than I would have expected after a relatively short tenure. And so, you know, I did take a somewhat unusual step in leaving the court. Maybe even more unusual than that was, you know, leaving the court to go to a tech company. I don't think that is very common. And I don't think that since I left there has been a stampede following me but for me it was... I think the combination of the challenge, I'd never worked in house before, and the particular challenge that Facebook was facing at that time as you allude to. For almost its entire history up until that point, you know, Facebook was one of those tech success stories that could do no wrong and that captured the public's imagination and attention. You know, at that time, we were still in the phase of the company's history when presidents and prime ministers would be walking around campus like it was nothing. Or, you know, you'd go to lunch and you'd bump into a rapper or a famous artist in the cafe.
Which rapper did you bump into in the cafeteria?
I can't betray confidence under the terms of my exit agreement.
It was Nelly, wasn't it? Was it Nelly?
Honestly, if it were Nelly, I would tell you because I would be so excited by that. But, you know, it was just no big deal. These were things that just happened every day. And then the worm turned, as they say, and by the fall of 2016 when I finally settled in after a few months, things changed dramatically at Facebook. We had the election, the presidential election, which raised, you know, allegations of Russian interference on the platform. Not long after that, we had the Cambridge Analytica affair. And so in my role running lit and regulatory affairs, I was kind of soon dragged into a bunch of stuff that maybe was predictable with the benefit of hindsight, but certainly was not something I expected to be playing some part in so quickly in my tenure there.
And how much did your time on the bench prepare you or not prepare you for where you ended up there?
It was actually the most fantastic preparation I could have ever imagined. And the reason for that is, you know, as you know, maybe better than just about anybody, when you're running a chunk of a legal team at a company like LinkedIn or Facebook, you are thrown into a dozen, maybe two dozen different subject matter areas on any given day, right?
You are dealing with highly charged rooms and environments regularly. You are often given, almost always given, no good choice in a situation, only a series of bad ones.
And you know I think the other thing that also was quite relevant and drew upon my experience at the court, you are forced to make decisions and do so quickly even if on imperfect information. And so in a lot of ways, yeah, that my time at the court was the ideal training for what was to come.
Nice. So you've been at Facebook now for a few years. You've spent time on the bench, now worked in-house at a tech company. What drew you to crypto in general and Coinbase? What was the genesis of you becoming the chief legal officer there?
Yeah. So, I was at Facebook when in 2018 or so the company made a decision to pursue something called a stable coin in the form of a project called Libra. And it turned out that as we were dealing with a number of... open question I haven't... because you know, right, as we were dealing with Cambridge Analytica and all the concerns about our privacy practices, it turns out you announcing the intent to launch a global stable coin that to some felt like a threat to the US dollar and other fiat currencies.
Everybody was like, 'Huzzah, great. Let's do it.'
Wasn't exactly perfectly timed or well staged. Again, with the benefit of hindsight.
Even though I wasn't directly involved in that product launch, in the aftermath of that and as our executives were called to testify and the like, I certainly was given the opportunity to learn much more about how crypto worked, what stable coins were, and what interesting legal issues could come of that. And so in a lot of ways, I was primed for the call from Coinbase. And as I came to learn not long after that, it was already anticipating many of the issues that were to follow. I also should say there was one earlier moment, Blake, and everybody, that was certainly a part of the genesis for me, which was on the bench as a magistrate judge, something in like 2011 to 2012, I issued a search and seizure warrant for this strange new digital currency called Bitcoin. And while I can't say for certain I was the first to do that, I certainly must have been one of the first. And so the breadcrumbs had been laid long before Coinbase came calling for sure.
Oh, that's so interesting. So, okay, great. I'm glad we got to crypto because I want to ask you, so Coinbase, the leading crypto exchange in the world and probably much more. So, I like many people have heard about crypto, talked about it all the time, but like really have no idea what it is, right? So, if you're like a... just a regular person, like treat me like I'm a seven-year-old, why should I care about crypto? Assume I know nothing and you won't be far from the truth. And also, as an extra bonus points, if you do not use the word the blockchain because nobody really knows what... that's not... I don't even know if that's a real thing. I hear it all the time. But you may use the words distributed ledger if you'd like.
All right. Well, within those very narrow constraints, I will attempt to do my best. I will start by saying that if you were actually a seven-year-old, I will tell you you shouldn't care about crypto. Frankly, you ought to go outside and play. Touch some grass, go feel the sun.
But I'm a very curious seven-year-old as I was.
Fair enough. Fair enough.
Well, look, the reason why anybody should, I think, care about crypto is that in a nutshell, it has become, I think, an important part of our financial system and will impact how we all interact with our economy both here in the United States and globally in very important ways. So, that's the why. Now, what is it? What does it do? You can think of it in a number of different ways. A lot of people inside of crypto think of it as alternatively a store of value like something like gold which holds value over time and space in ways that are useful even as dollars and other fiat currencies rise and fall sometimes quite dramatically. It's also a unit of account or a means of payment. Which means it's another way to pay for things and move value in ways that are much more efficient than gold bars or dollars or if you think back to early money, things like seashells or stones. It is effectively programmable money and so it is as easy to send from one person to another as an email and just as fast.
Hm. So, well, I'm a big seashell guy, actually. So this is... you're talking my language. Mindy, how do you feel about seashells as currency?
Never used seashells as currency. Actually, not as currency. I watched a TikTok video actually. I asked it to explain to me crypto. And it gave me an analogy to using points at like a Sephora, which tells you something about my TikTok feed, actually personalizing here. So it, you know, like points that you can use to purchase things.
Is that... how did TikTok do on that one, Paul? You seem a little underwhelmed by that one.
I'd give it an eight and a half out of 10. I guess the basic idea.
Yeah. I mean, look, whether it's, you know, ancient societies that use seashells or more recent ones that used gold bars or, you know, whether today, you know, with your Sephora account, the fact of the matter is like we rely upon all sorts of alternatives for credit or value to pay for things. And in most cases, dollars or euros or whatever work perfectly fine. In most cases, if you want to send money electronically, a wire through your bank or a send on Venmo or Cash App is probably okay. The problem is in many cases there can be delay, there can be expense and if you're talking about a single payment to a manufacturer down the street it probably doesn't make as much sense to rely upon crypto. But if you're managing treasuries, if you're moving tens of millions of dollars on a daily basis from one account to pay for vendors in one country to another account to pay for employees, it matters that this be as efficient, as fast, and as cheap as possible, and that's what crypto offers.
Yeah, usually that's a winning strategy.
What about like... some people are... and popular perception is like okay crypto is like for young bros who like to gamble. I was literally... I was in DC. I was in an Uber. I was talking about how I was going to interview like the chief legal officer at Coinbase and the Uber driver goes, 'Oh yeah, I lost all my money in crypto.' He's like, I had 150,000, I invested, it went to 500,000, then I put in these other coins and those went down and they're gone and now I'm driving an Uber. But he was still very pro crypto actually. He was super pro crypto. But so what if somebody says, 'Hey, crypto is just gambling.' What do you say to them?
Well, what I say to them is it's probably time to take another look because look, the reality is that in the earliest days of crypto, people were just first learning what these things were and what they could do. Quite naturally, it was the early adopters, many of who used these currencies for activities that fell outside of traditional finance, that were the first to embrace it.
The fact is though that today though crypto in many ways has become boring. I hate to admit this, LinkedIn crypto is now... crypto is LinkedIn now.
Well you know I need... I'm neither young, I don't really gamble much. And I'm a pretty poor example of a bro in many ways. I've got couple kids. I go to bed at 8:00.
You go to bed at 8:00. I don't believe that.
Yeah. I'm a farmer. I'm a farmer.
What time do you get up? You get up at 2:30 in the morning?
Not quite 2:30, but not much long after that. Yeah.
Is that because you like to do like... I'm going to grind and get stuff done from 3 to 6 when nobody else bothers me? Or is it just... are you actually a farmer? Do you farm?
