1/ Translation: Brian Armstrong is saying Coinbase doesn't know who its customers transact with, meaning they're likely helping SDNs receive funds from the U.S. financial system. This would put Coinbase in conflict with a host of U.S. OFAC and statutory prohibitions. https://twitter.com/brian_armstrong/status/1331745196887867393

2/ If Coinbase is eyeing an IPO, they'll need to make stringent representations and warranties to their underwriters that they are compliant with OFAC regulations and U.S. blocking statutes.

3/ If I'm the underwriters, I would want to really drill down on this. I'd make them hire reputable counsel, do an investigation and make voluntary disclosures before taking them public.

4/ We saw echoes of this in the Dropbox S-1. They disclosed an oopsie under U.S. sanctions and export laws, and noted that they had made a voluntary disclosure to the appropriate federal agencies. I assume this was driven by the underwriters.

5/ If you haven't done an IPO, this is an area to clean up in advance of the process. It will come up. Underwriters' counsel has no incentive to go easy on you. And you'll be over a barrel if this you need to hit an exit window to keep investors happy or manage burn runway.

6/ Great companies know this and invest in being helpful participants in the U.S. financial system instead of being whiny rent seekers.

7/ Square, Stripe and PayPal all have invested heavily in getting this right. They have fantastic compliance teams and systems, and help government agencies root out fraud, trafficking, and terrorist activities.

8/ If crypto currency, specifically Coinbase, is going to play a meaningful part in global commerce, they'll need to do the same.

9/ If I were at a firm, my rate would be ~ $1,000 an hour. But I'll give some free advice to @brian_armstrong - it's better to play by the rules than try to work the refs over twitter. OFAC relishes its independence and ties to the Treasury Secretary won't bail you out.

10/ As a fun story, I once worked for a client where the White House asked OFAC to help with a licensing request. The folks at OFAC asked to set up a call, which made us excited that we'd get the license granted in short order.

11/ They opened our very short call by effectively saying the White House told them to take the call, so they set it up to check the box on the request. Then, in so many words, they highlighted their independence from the White House and told us not to expect any special favors.

12/ We never did get that license granted.