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DAO Weekly Meeting #67

Date
April 21, 2023
Timestamps
0:00 Intro • 0:25 Intro to Publius counsel • 4:36 Overview of what has been done so far • 13:07 The Kraken connection • 14:40 Was the Kraken connection known at the time of the interview? • 16:08 Should the DAO hire a lawyer to represent it? • 17:35 What is Steve’s full name? • 18:15 What is the process for following up with law enforcement? • 21:06 If the SEC starts asking questions about Beanstalk would Steve act in a similar capacity? • 22:51 Will the complaint be uploaded to Discord? • 24:24 Was the FBI made aware of the Kraken connection? • 24:52 Could you redact all of the info that could tip off the hacker? • 26:05 What type of information is in the FBI complaint? • 28:03 Are there any civil suits going on? • 28:17 Can the DAO/ Publius file a civil suit against Kraken? • 29:21 When was the most recent info given to the FBI? • 31:46 Could the DAO file a negligence suit? • 33:13 What are the different states that a grand jury can be in? • 35:53 Can members of the DAO open a class action complaint? • 36:53 Closing statements
Type
DAO Meeting

Recordings

Meeting Notes

Intro to Publius counsel

  • Steve is a former federal prosecutor for 6 years and now is a defense attorney and investigation attorney
  • Steve and his colleagues were hired by Publius to form a plan to get the government to respond to the Beanstalk exploit.

Overview of what has been done so far

  • From when Steve was hired, there was already a firm looking into where the funds had gone to. This firm had already reached out to federal prosecutors. This firm connected Publius with the FBI and the secret service.
  • When Steve’s firm took over they reached out to the head of the DOJ’s National Cryptocurrencies enforcement department. Steve’s firm made itself available to federal prosecutors and the DOJ. They explained why they thought this was a fraud and how it was misleading. Steve’s firm prepared a memo to send that laid out what information they had. Then they ask Publius to do a 2-hour interview with the FBI. At this point, there is a grand jury that can issue subpoenas. Once an investigation starts, they will not give a lot of updates until they can publicly charge someone. Steve reached out not too long ago and they told him that there is nothing to tell him

The Kraken connection

  • Steve would like someone else to share the details of the Kraken connection

Was the Kraken connection known at the time of the interview?

  • The Kraken connection was known at the time of the FBI interview, one of the reasons Steve’s firm reached out to the FBI was because Kraken made it clear that you need a subpoena to get information from them.

Should the DAO hire a lawyer to represent it?

  • If you ask a lawyer if they need a lawyer, the lawyer will say yes. Steve's view is that his goals are aligned with the DAO and there is not a lot of work to be done as of right now.

What is Steve’s full name?

  • Steven D. Feldman, he works at Stradley Ronon Stevens & Young, LLP.

What is the process for following up with law enforcement?

  • Steve does not like checking in with prosecutors, but he thinks if we have some important information we should pass that along. Steve is not aware of any new information since the interview

If the SEC starts asking questions about Beanstalk would Steve act in a similar capacity?

  • Steve would ask with Publius and make sure that is what they want Steve to do

Will the complaint be uploaded to Discord?

  • Probably not, some of the information is still private and the hacker could use it as a roadmap to get around the FBI. Only DAO members that are involved in the recovery effort will get a copy.

Was the FBI made aware of the Kraken connection?

  • Yes

Could you redact all of the info that could tip off the hacker?

  • The information that is important to the DAO is also important to the hacker, so there would be no point

What type of information is in the FBI complaint?

  • It is a package of all of the research and other supporting documents. In addition to that there was an explanation of how the hack went down.

Are there any civil suits going on?

  • Not that Steve is aware of

Can the DAO/ Publius file a civil suit against Kraken?

  • Anyone can sue anyone for anything. The real question is do you have a chance to win the suit.

When was the most recent info given to the FBI?

  • July 14th of last year. This was a follow up, and they were giving explanations on how Beanstalk works

Could the DAO file a negligence suit?

  • This is outsides Steve’s role currently

What are the different states that a grand jury can be in?

  • They can go on forever, there is no real deadline. A grand jury can be either open or closed.

Can members of the DAO open a class action complaint?

  • This is not what Steve is here to give advice about.

Transcript

Everybody. I think we have enough folks here to consider a quorum so we can go ahead and get started. I figured that, you know, since most of the discussion will be centered around asking some a perverse counsel questions around some of the investigation that did take place on sex Point figured we should start there for today. So probably it's I don't know if you had something you wanted to say to kick things off or introduce who would be doing some of the speaking and question answering today. If you're speaking, we can't hear you. So no dice can continue on mute. Can you hear me now? We can hear you now. Well, it's probably best for Steve to introduce himself so he can just take it away. I mean, probably introduce himself, and then people can just start asking questions. But we'll just do it right. Hey, Steve, how are you doing? Would be awesome. If you can give a little bit of an overview to everyone about your relationship to some of the investigations that have happened up to this point. That would be, I think, helpful to kick things off. And Steve, I think you're on mute. So the mute buttons are not in the bottom left of the of discord. Well, in the meantime, while Steve is getting set up, you know, I would encourage everyone to either if you have questions to unmute when the time comes and if not, drop them in the in the Bono chat. Don't don't see any questions dropped in there yet. Steve, it seems like you're still muted, so you're going to need to cut the uneven. We see you unmuted now. Can't hear you quite yet. I just got in touch with Steve and he said he wasn't able to hear us, so he was trying to restart it. So hopefully in just a sec he'll be online. Sounds good. Well, while we have a few minutes, maybe we can it. Feldman, can you hear me? Hey, Steve, We can hear you now. Sorry about that. No sweat. Were you able to hear hear anything up to this point? Nope. This is my the first moment I've heard. So I apologize for being like us. No sweat. I was just asking. Would be awesome if you could give a a brief introduction to yourself and your relationship to the investigation related to Beanstalk. And I think that would be a great place to start as far as our discussion goes. Absolutely. So I am a former federal prosecutor because my practice on white collar criminal defense investigations and compliance. I was a prosecutor in the securities unit at the U.S. Attorney's office for six and a half years, starting in 2002 and ending in 2008. And I've been a defense attorney and investigations attorney since that time, since May of 2008. So my colleagues and I will write to assist police in strategizing how best to report the crime and get some action from the government. Right. Everybody can file. And I see three form which Publius took care of doing. But we in my experiences, if you have folks who actually have been in the trenches, we can get on taken more seriously by picking up the phone and using our contacts so well we were retained to help do that, come up with a strategy of how to get the government's attention, how to report the crime, and try to get law enforcement authorities and prosecutors to investigate and and aid us and Publius and the Dow in getting all that done. Could you give an overview of what has been done up to this point? Yeah, I can also I can give the overview from from my standpoint, from the legal side, from from when we came in, there had already been a security consulting tracing type investigations from hired. That was Davis's firm. Davis. His firm had already reached out to some agents, FBI agent, etc. I think you're cutting a bit of that in and out. Not sure if there's anything you can do to fix your mike. At that point. We try to come closer and move it. Maybe that'll be better. So I might call an attack. Davis firm had already reached out to Steve. Can you maybe just say who Ed Davis is? He was is a investigating ground, I think in the Boston police force as a high level person there. Isn't that right? Yeah. If I recall correctly, Ed Davis oversaw the Boston bombing investigation as part of the Boston Police Department. And we originally retained him to do an investigation into the the theft. So that just, I think, a helpful, helpful piece of color. And Ed Davis, as you said, connected us with, I believe, the FBI and also the Secret Service. And sorry to interrupt. Helpful because that was that was a little bit right before we got involved. So please continue. Thanks. And it was, you know, really after and shortly after that, I think we really took over into Ed and his colleagues. And in terms of coming up with the strategy, strategy we pursued at that point was too. And a contact e, f B to make sure there were prosecutors on the case and make sure that we had the attention of the authorities and got them the information we needed. So one of the things we did is we reached out to the head of the Department of Justice's that now National Cryptocurrency Enforcement team woman name onion choy, who had been in at the same U.S. Attorney's office where I worked. She was a prosecutor in the Southern District of New York before becoming DOJ's national cryptocurrency enforcement team head. So we'd reached out to board and make sure she knew what was going on. And she and validated and confirmed that there was a team through Ed Davis contact of both FBI and federal prosecutors already involved in the case. And we started working with those people, particularly with the federal prosecutor who was take on this at the US Attorney's office in New Jersey. So that's not something we controlled, whether it went to New Jersey or New York or wherever. The FBI agents who I think were contacted by Ed reached, I think took the lead in reaching out to prosecutors who they must have had relationships with at that point. We made ourselves available to the prosecutors and to the FBI agents got their attention. We told them the background, the narrative of what had happened, what what we you know, our thoughts on the best of what we knew about what had happened, why we considered as a crime, as opposed to just somebody being smart and how there was how it was fraud and how it was misleading and why we thought that it was something they should be doing. Criminal activity. Our phone calls. After answering some questions from them, they then we we prepared a memo laying out in detail the information we had collected, backed up with, backed up by the documents and the information that we knew to date and asked for Ben to do an interview. So Ben sat for a two hour interview with the with the agents and the FBI agents and the federal prosecutor. And the question ends about anything they wanted to know. But really explaining happened and why it was a crime and why we wanted them to look into this and take it seriously, and that there were then some follow up questions from them where they asked for us to provide some additional answers to the questions, provide additional documents or documents that we had not provided. We did all that, and that really was where things stood at that point. What I expected to happen is kind of where we are today. I mean, although not as quickly seeing more results that we know about. But what happens in these situations is the government commences a grand jury investigation. They can issue subpoenas, they can make efforts to obtain documents from financial institutions, exchanges. Anybody who they can reach out to with subpoena power. But all of those subpoenas are secret. They're part of a grand jury investigation, and they're not allowed to tell us who they've subpoenaed, whether those people are cooperating in their getting documents back or whether they are, you know, or whether they've decided they're going to, you know, not pay no attention to the FBI agents and prosecutors. So what happens in these situations and that's and this is routinely tough for my clients is once an investigation commences, you don't get much information. The information you glean are things like, is there a prosecutor assigned to your case and did they ask you questions? Did they do an interview? Well, we had those things. So we we had their attention at that point. They seemed they took it seriously. They spent time. But then they don't tell us what's going to go on until they can publicly charge someone, publicly reveal in a public forum what's happening. And the way they do that is through criminal charges or through, you know, sort of space where they might retrieve money. But that's often the next steps. They're not going to say to us, this is what we've done so far, the likelihood of success. This is one who we suspect is involved, did reach out recently and said, you know, is there anything you can tell us still ongoing? They said there's nothing we can tell you. Well, the one takeaway from there's nothing we can tell you is at least they can close the investigation. If they only closed that, they might say to us, if we've closed the investigation, we don't think this is something we should pursue, but we can't tell you anything, actually likely means they've they're doing the grand jury investigation. They can't tell us anything. So, again, anyone should feel free to unmute and ask, but I'll just go from the top of the chart. So there's a process. I would love to know. More info on the Kraken Connection to the hackers. What? Steve, I'm not sure how involved you were with that information, whether as part of the memo that you presented or something to that effect. Not sure if you have much if you have any insight to share on that. Well, I mean, that would be something I feel better about if they have information to share the details of that than me putting it on that. So I'm having a little bit of a hard time. I think your mike is cutting a bit in and out. Could you could you restate what you just said? I prefer that somebody else answer that question if you can. In terms of the details of the Kraken connection and what you guys believe you have found, I mean, there's there are others out there who have tried to investigate how the different organizations are connected in the trail of the crypto. And certainly that we shared all of that information, everything that we knew had been collected by different constituencies with the agents and the prosecutor. But what it means and what the details are, I'm not the person to go into that makes sense. Backus asked what information was known at that point back as you can specify what what point you're referring to, that would be helpful. They also ask, was the potential Kraken link known during the interview? Not sure if maybe perverse would be the best person to answer that one. Or if Steve, you know potential Kraken leak. So we had done, you know early on there had been some contact Kraken there had been to think that the Kraken had a role. We knew about that at the time that Publius did the interview. I mean, one of the reasons we are reaching out to the FBI is that Kraken made clear that you needed to have a subpoena, as all these organizations have, take take the position that they're not going to tell us because we're the victims. You need subpoena power. And so that and I'm on the FBI and the prosecutors to use the grand jury subpoena power. And so just to be clear, was that told to the FBI, like the information or on the Kraken link, believe it was back ice? Next question. Got it. Okay. Defi Summer asks, In your opinion, Steve, should the Dow hire a lawyer to represent it? Oh, well, it's a little bit of a bind when you ask a lawyer who if one needs a lawyer or should they get a lawyer. Generally lawyers always just say, yes, you should have your own look. You think you need your own lawyer, Go get your own lawyer. I am I am Publius lawyer. So I have particular clients and that's who I am working in my view, from Publius. Inside interests of Publius are aligned with the Dail and not more to be done at this point. You know, at this point, unfortunately, if we have more information, I am happy to convey that information to the FBI agents, to the prosecutors. And if we can, if there is more information out there, that would be great. But I don't know what more another lawyer would do that I'm not already doing, even though I'm not representing the Dow as a whole. I feel and chill asks Steve, what is your full name? Steven Feldman and I work for the law firm Straddling Ronin Stevens and Young LLP. We work office at 100 Park Avenue. Great. Appreciate that, Steve. We'll just pause for a few moments for folks to drop off questions and chat or unmute. I've got a quick one. Steve. First of all, thanks for taking the time to come speak with us and walk us through everything. I'm curious, could you speak a little bit to the process of following up with the FBI or whoever else would be managing this case? From a law enforcement perspective? I know that response is generally, you know, not there's not much information to share. But I'm curious, you know, to what extent you think we should be routinely, you know, checking in and delivering them new information or, you know, whatever information we have, I suppose, and to what extent that's been done thus far. So in terms of only checking in with them, I, I do professionals and use them on a regular basis to do their jobs. They, they, they're trying to help us. That's why they're in these positions. That's why they have these jobs. And certainly, you know, I try to be careful about the line between, hey, we would love an update if there's anything new to share. And I've become a bother in some way and I'm being respectful of them just doing their job. So I don't like routinely just checking in with with prosecutors having sat in that seat in the past, we have substantive, real information to give them. I encourage us to do so. Happy to package that up. There's an email we can send it to FBI agents, we send it to the prosecutor. If we have information there, they'd be happy to take it from us. They won't know. I imagine they are also following and investigating closely. I'm sure they have information and sources that we don't have, but if we do substantively information, let's send it to them. I don't I wouldn't want to be you know, I, I say to people that the prosecutors and the FBI are not our pen pals. Right. They don't want to be hearing from us every day. Oh, I heard this and I saw that. And somebody said this on the chat. We have real substantive information. Let's put it together in a memo. Let's have attachments and exhibits and send it to them. Question Have we done that recently? No, we have not. I have not been aware of any new information to send them since since the you and the information we provided after that, which was last year. So Ben's on fire in the chat, asked Steve if the SEC or another regular regulatory agency were to start asking questions and to be in stock, Would you act in a similar capacity as you are now and ask them to clarify what they meant by that in their request statements or documents specifically? CC is out there looking as find all the crypto and help us recover it. I imagine that I would talk with Publius and make sure that that's something they wanted me to be doing and that we would be in touch with the money. But it's a little bit for me of a question that doesn't fit so well because that's not really what the SEC does as much there, or at least it could imagine that we would, I imagine, cooperate with them. But but, but it'd be a question I'd have to ask cowboys. Hey, Ben's on fire. Not sure if you're unmuted intentionally, but there's some noise coming through. You might go for a follow up over voice. If you had something you wanted to add or follow up, it. Okay, I'm going to server mute you for now. Ben's on fire, but feel free to just hang me in the chat if you want to speak up. Okay. Defi Summer asks Can you slash your client upload the complaint that was filed with the FBI to the discord three that you guys are talking about that is that what they they're referring to? The one. So assuming. So I guess my answer following I'm a little has to I think as a group we were hesitant to the information provided to the FBI publicly to everybody because if any of that is, well, secret and helpful to the FBI where people are road map, if it becomes public on how to respond to whatever we've discovered so far and and make changes and may take steps to hide their conduct so my understanding is that the agreement has been that only those people down members who are affirmatively getting involved with with with visual work of try to help do investigations are going to get access to that information. I think that's a good plan. I endorse that. And I think if you'd be a little hesitant about getting too much information publicly, given that we can't control who it goes to as asked, did we get a firm answer about whether the FBI was told about the potential Kraken link? My understanding from your last answer was yes, but Casey, I want the opportunity to clarify, and I owe our initial contacts with crack and then what we learned early on, if what you're referring to. Yes, all of that was shared with the FBI. All right. Defi summer follows up and says, could you simply redact said information that may tip off the hacker if that is a concern? They're referring to the sharing of some of these documents publicly. The question is, if you're redacting everything that you're worried is going to make everything that might be helpful to the hackers is going to be the information that you guys want to see. What are you what would you be not redacting in this situation? I guess. I mean, that's a call. It's not a legal decision, right? It's a strategy decision. The community decides that all of this information should be shared with everybody. And to what degree you agree to do that this is. Yeah, but, you know, I role in wanting to counsel Publius and the best friend for recovery and not step on the FBI or DOJ toes. I would counsel being fair about publicizing the information it's already shared with the government. And you briefly describe what type of information is in question here that you mentioned. You know, you're skeptical of sharing. Seems like there's some mixed opinions in the community about whether that would be good or bad to do it. Yeah, it'd be great if you could explain at least like what kind of insight is there, gave it possible to do so without, you know, revealing anything. I mean, I think we gave the FBI and the prosecutors a package and done up until the dates of the conversation. So there had been a search efforts by the organizations out there. Those those research reports were collected. There were in member stations with organizations such as Kraken to try to get our help. Who had we contacted, what had they said? What were their responses, depictions of things we had seen going on out there. I see three report our explanation and understanding of how the exploit went down, the various iterations of what had happened, what had been proposed, what had been voted on, so we could explain to them how it happened. Those are the different things we provided up for. Thanks. I'll just pause and leave the floor open again for for folks to speak up or drop questions. I kept being asked. So are there any civil suits that you are aware of against any of the parties involved? I'm not aware of any civil suits or any contemplated civil suits. Defi Summer asks, Can the Dallas Pugilist file a civil suit against Kraken? Still answer Right. First of all, you can file a suit against anybody for any reason you want. The question is, do you have a case you're likely to win? That, of course, would require some analysis of what would be the cause of action they do wrong. And then do you have that's going to survive a motion to dismiss. So if the theory is the crack in connection with before or after the fact, the the person who conducted the exploit the evidence of that, then, you know, maybe there's the basis for a lawsuit. I'm not aware from my vantage point what I've learned to date of a viable reason to bring a lawsuit back. As asked, One was the most recent information given to the FBI, has it been since April of last year, with around July 14th of last year? Well, and what was learned then that wasn't learned or closer to the exploit? Or is that information that would not be a good answer. Sure. Publicly that may have been isn't what was necessarily learned part of it that's following up. So we were also educating the FBI and then stock. Right. The FBI needed to understand and, you know, how the exploit worked and what were all the different processes. Part of what we're doing is responding to their questions in addition to just sending them information, educating them on beinstock from the right. They didn't know a thing about it. So we're educating them on the from the ground up about it. That was part of the process. Makes sense. So you said July was the most recent time that that happened or you're answering questions or giving new information. And I believe you mentioned earlier that more recently, like in the last few weeks, they did confirm that the investigation was still open. Is that correct? Not sure if you can still hear me, Steve, but if you're speaking, we can't hear you. I'll repeat it. What They did not say the investigation's ongoing. They only would say that. They simply say there is no additional information they can share with us at this time. I take that to mean they're still in the investigation. Otherwise it would be a little misleading for them and they can't share any more information at this time. But they don't even just say there's no more information they can share at this time, which to be clear is you're saying it's not explicitly saying the investigation is still open, but you're saying it implicitly is. That's what I'm trying to say. Thank you. The better way of saying it, no worse. Got it. Makes sense. So Defi Summer, who asked if the Dow could file a civil suit against crack and they follow up and said what about a negligence suit to have you going a little outside of what my role here is. Right. Which is I'm here to help. Oh, and Publius in particular. When my clients ran into the prosecutors, the FBI and other law enforcement that we've all been victimized, that you were all victimized by this exploit and trying to get law enforcement to go after and help do that helped resolve this. One of the reasons people pull enforcement to do these things is because they don't, you know, with taxes and law enforcement acts, we don't have to pay out of our own pocket for separate private lawyers to try to bring a lawsuit and prove it and all those things that go on up to analyzed whether the Dow has a negligence case or any other kind of case to bring against fracking. That's not been my marching orders. So I'm a little out of I got on a limb here to tell you whether you could bring a case, a negligence case against it or not. I, I haven't analyzed it. I don't really want to give an opinion on it, quite honestly. I've been asked what are the different states that a grand jury investigation can be an active and can it be put on hold? Is it possible that we can sit here for years without knowing anything, or will it eventually? And one way or another, oh, great situations can go on for eternity. They there's no particular deadline. The deadline, quite honestly, is the statute of limitations. Right? Generally, it's five years from the time something occurs for the government to a criminal case, there's sometimes reasons even that can be delayed. For example, if you were seeking records overseas, I'll send out a request to get overseas records, which can take a year or more to get a response sometimes that that request can delay actually limitations and stop it from going forward. And a grand jury investigation is seen as either open or closed. It can have times when it's very quiet, right. You send out a bunch of subpoenas to financial institutions and it might take them six weeks or three months to provide you. One of those records mean that they dig through those records once they get them back to figure out one of those records mean what more who do they need to subpoena next? Are there follow up people to question And I'm going through the records and doing that for some period of time. The prosecutors and the FBI agents will come to a conclusion. Either we have probable cause to believe a crime's been admitted and we've identified the particular person as the person who we think there's probable cause to believe committed that crime. Then we indict that person if we want to or we just some don't or forever hasn't exercised our discretion not to go forward with charging anybody with a crime. So that's how things usually play out. And if they don't charge anyone with a crime, they don't really get that so often either, although sometimes they may say, we've decided to close the investigation and let some of the victims know that. But it it's less it's also not frequently done. I have plenty of cases where I have clients who are worried that they're being targeted in grand jury investigations. And you never know when it really ends. So I think what equal question is intended to mean is can individual members of the Dow or. Yeah, if can individual members of the Dow open a class action complaint? Should they buy that? That's beyond what I'm here to give advice about. Guys can by law, anybody can go file a lawsuit. The basis to bring a class action and against whom and by whom and who would do that, that I you know, I'm not here to give opinions about that. Guys. I'm I'm sorry. Well, regardless, I appreciate you coming here to field questions and being willing to play ball. So I'll I'll wait to see if more folks have questions they want to try Monmouth's as well. All right. Last call for questions. Go on. Once. All right. I think we'll go ahead and leave the meeting at that for this week. Apologies have to reschedule and thank you very much, Steve, for for coming to and answering all of our questions. Pleasure. I'm happy to help. And for that, we're going to do that. We have good folks from the FBI and U.S. attorney's office or so this. But my thought is hopefully that while this might take time, I'm hopeful there's that we have good people willing to help us and that we might get good results someday. Likewise. I appreciate it, Steve. Thanks, everybody. We'll see you next week.