Episode summary
Worried Noises | Money Stuff: The Podcast
Money Stuff The Podcast
· · 29 min · Hosts: Matt Levine, Katie Greifeld
Summary
The conversation centered on a wave of tax-driven financial engineering, especially 351 exchanges and related ETF structures that let wealthy holders of appreciated assets defer taxes by contributing assets to an ETF in exchange for shares. The hosts described how this has moved beyond classic ETF tax efficiency into a more explicit productized strategy, with Bloomberg reporting that roughly 105 such ETFs have been created and that the Treasury Department is now looking at whether some of them are abusive.
They also argued that tax law is not a pure “code is law” system. Even if a structure fits the literal rules, the IRS and courts can still apply form-and-function principles to challenge transactions that appear designed mainly to evade tax. That same tension came up in the discussion of a highly concentrated founder portfolio being diversified through borrowing and in-kind transfers, which the hosts treated as clever but legally shaky.
The episode then turned to Gary Gensler’s phone records and Coinbase’s fight with the SEC, using that story to contrast how traditional financial firms and crypto companies respond to regulators. It closed with two newer weirdnesses in markets: Truth Social’s plan to sell millisecond-faster API access to Donald Trump posts, and the idea of sports indexes that would package team performance into tradable ETF-like products.
Key takeaways
- The hosts said Bloomberg found about 105 351-exchange ETFs so far, and Treasury is now examining whether some are abusive.
- A guest argued that tax law is not a pure “code is law” regime, because the IRS and courts can look past literal compliance to purpose and substance.
- The hosts said the most obvious use of a 351 exchange is a founder with highly appreciated stock who wants to diversify without triggering current tax.
- Coinbase’s subpoena fight over Gary Gensler’s communications was used to show how crypto firms are more willing than banks to battle the SEC.
- The hosts said Truth Social’s API could become a meaningful revenue source by selling faster access to Trump posts to quant firms.
- A guest said sports indexes would effectively turn team performance into a continuous ETF wrapper for sports betting exposure.
Notable quotes
“there is a requirement that the portfolio you contribute has to be fairly diversified”
“tax is a weird system because I know like you're like, "Oh, crypto code is law. It's in the code." That's not how tax works”
“We accidentally deleted Whoops”
“we want some of that revenue. So instead of just giving it to everyone at the same time for free, they'll they'll give it to hedge funds and quantitative trading firms”
How the episode opens
Bloomberg Audio Studios podcasts radio news. — Katie. — Yeah, — Today is your last podcast. — I know. — For some period of time. — Yeah. Until at least 2027. I'm sad, I got to say. — Right. You definitely watched back what you were going to say. You're like, I'm pretty jazzed to never do this podcast. Sad. No, I mean sad. Sad. I was saying to Anna, our producer, before we started, I'm going to come back
To the podcast — To, you know, — You mean when you return from parallel leave, not not like — To visit in a month. — Yeah. Oh, no, no, no, no. You're not going to see me. But I'm going to come back to Bloomberg, but I have all these goodbyes. Like, this is my last podcast. I filed my last newsletter. Tomorrow is my last TV show. I don't like saying goodbye again and again and again, but I feel like it's part of the process.
It is definitely part of the process. I'm sorry to burden you with another goodbye, but like there is like administrative — Yeah, — We have to be like — Friends, listeners, this podcast will not be going dark for six months. — We're rebalancing.
We're rebalancing. I'm going to take August off. Then we'll be coming back to you with like a rotating cast of guest hosts who will not be filling Katie's shoes, but will be chatting with me. — Yeah. about the financial news of the week and whatnot and so forth.
Yeah, — We'll miss you. — I'll miss you, Matt, and I'll miss this podcast because it's fun to have an hour locked in a room with you every week. It has been — Wow, that doesn't sound sincere.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- tax code
- 351 exchanges
- crypto vs the sec
- truth api
- sports indexes and etfs
Companies and tickers mentioned
- Gabe Plotkin ETF
- Truth API
Watch the episode
Watch “Worried Noises | Money Stuff: The Podcast” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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