KYLE BASS: What percentage of the transactions that were going on, were done, say, for dark reasons as opposed to for reasons of commerce?

KATHRYN HAUN: Well, in the early days, the number of the percentages were way higher. Because the thing we know about criminals is that they're often the earliest adopters of new technology. And we saw this in the internet.

KYLE BASS: And they love the anonymity of this one. Yeah.

KATHRYN HAUN: They love the anonymity. But it turns out, it's not anonymous. If anything, it's like digital breadcrumbs. This 21,000 bitcoins goes missing overnight. DPR looks into it and says, hey, it's Curtis Green's pins and passwords that have allowed this to all be drained. And actually, I want to have a hit put out on him.

KYLE BASS: So, kill Curtis Green?

KATHRYN HAUN: Where we live in a world of daily cyber breaches, centralized systems are huge targets and huge honey pots.

KYLE BASS: Well, this one's going to be a fun one, Katie, it's a pleasure to sit down with you in a more formal sense, since we're mostly informal.

KATHRYN HAUN: Likewise, Kyle. Thanks for inviting.

KYLE BASS: So, for those of you that don't know Katie, she is one of the partners at Andreessen Horowitz. But more importantly, the former US attorney here in San Francisco who prosecuted the Bitcoin Silk Road case. We're going to talk about a lot of interesting things today. And for the Real Vision crowd, I think talking a lot about crypto digital assets will come more at the end. But let's go back to your law school days. And talk about which Supreme Court Justice you clerked for and why, and then how that brought you into working in the US Attorney's office?

KATHRYN HAUN: Well, it's funny, Kyle. I wasn't actually planning to be a prosecutor, some people think I'm going to go to law school and go be a corporate M&A lawyer or go into international business or go be a public defender. I didn't really know what I wanted to do. But I knew I wanted to go to law school. And that's something that I had always wanted to do even from the early days. And so, I went to Stanford. And there, I really was focused on going to New York City. And so, I signed up, I took the New York bar. And I was planning to go work at Kravets, which is a big Wall Street firm.

And one of the things I realized, though, was that what was really interesting me in law were the human stories and the human element, whether you're talking about things like employment law, or especially criminal law. And ironically, my best grades, were not from the transactional classes, like the corporate law, or the securities and capital markets classes, but from the criminal law, or the constitutional law side of things. So, maybe that was an early sign.

KYLE BASS: It was and clearly it's what drew me to you as we developed our friends over time is this you're one of the coolest ladies that I know. You're one of the few people in San Francisco that can carry a gun. You've prosecuted some of the worst MS13 cases as well as, again, the Bitcoin Silk Road case, which I'd love to get into a little bit next. I know that there are movies being made about this and things like that. But if you would, I think this talk, what people are going to find to be most interesting about our conversation is, is how you came from law enforcement on the criminal side into the investment universe into being a partner at one of the most prestigious venture capital firms in the world.

KATHRYN HAUN: I was fortunate to clerk for Justice Kennedy. And I remember that he asked me in my interview- I'll never forget, he asked me, what do you want to do when you leave here? What's your five-year or 10-year career plan? And I told him, I want to go be a prosecutor. And I knew by that point that I really felt strongly that I wanted to be involved in the criminal justice system in some way. And that was quite a shift from the early days of when I thought I was going to be a corporate lawyer in New York City.

And I went to work for a big law firm in Washington, DC. And I told the partner very candidly, my goal here, the partner who hired me, my goal is to really go into the US Attorney's Office. And fortunately, that was a firm called Sidley Austin, they appreciated the transparency and said that it's a tough nut to crack. But if you can get into that office, good for you. And 10 months later, I found myself there.

And that was out in the Washington DC area, it was in the Eastern District of Virginia called the Rocket Docket. Because the Rocket Docket, so named because of the pace with which cases go through. And we were doing cartel cases there, a lot of the international work that the DEA was doing. So, that's where I cut my teeth as a baby prosecutor, was in this Rocket Docket.

And then I was out, also in headquarters working on some national security cases, and also working in the attorney general's office. But in 2008, so they call it back to the line back, to the line being a prosecutor. So, I had been in some senior roles in headquarters working on national security, and things implicating national policy, and went back to the line of prosecuting cases, which is what I loved.

KYLE BASS: And that's when they sent you to San Francisco?

KATHRYN HAUN: I actually chose to move out here, mostly for family reasons. And I had been in DC by that point for eight years. Which was a nice long time.

KYLE BASS: But you got involved in some really interesting cases really quickly. Somewhere gang-related and somewhere, again, then the Bitcoin case came. And that was a big one. So, if you would take us right into the Bitcoin case.

KATHRYN HAUN: Sure. Well, so it was around 2012, late 2012 I think it was, and my boss came into the office. I had been doing murder cases and organized crime and Rico gang murders up until then. Had done a few trials, I did a two-month biker murder case and was felt like I had been there and done that with a lot of violent crime cases. And my boss knew that I really was looking for a change, but I still wanted to stay in the office. And they proposed, why don't you work on this new case that we have in the office? And that's a case against Bitcoin.

Here we were in 2012-2013. And we quickly learned there's no such thing as prosecuting Bitcoin, that would be like prosecuting cash, it's not possible. We also quickly discovered it's not desirable. There were some really good things about this new technology also. Instead, what we did was we focused on- we said, let's- just like we do with cash or wires or any medium of exchange, let's focus on the bad uses of this. And that same thing happened in the early days of tech and in the early days of the internet. It wasn't let's prosecute technology, it was like, let's stand up a computer crimes unit within the Justice Department and go after the nefarious cases using this technology.

So, that's how we were approaching Bitcoin in those early days. And there were a lot of bad, nefarious uses involving crypto. And in those days, when I say crypto now, I mean crypto assets are there are more than 1500 of them. Back in those days, we're talking really just about Bitcoin. We're talking about Bitcoin, this is pre-TOR.

KYLE BASS: And in your mind, what percentage of the transactions that were going on in let's just say Bitcoin early on were done, say, for dark reasons, as opposed to for reasons of commerce?

KATHRYN HAUN: In those early days?

KYLE BASS: Yeah. KATHRYN HAUN: Well, in the early days, the number of the percentages were way higher. Because the thing we know about criminals is that they're often the earliest adopters of new technology. And we saw this in the internet.

KYLE BASS: And they love the anonymity of this one. Yeah.

KATHRYN HAUN: They love the anonymity. But it turns out, it's not anonymous, which I'll get into. It's pseudo anonymous, and there's an important distinction there. Because Bitcoin is far from anonymous, if anything, it's like digital breadcrumbs. Speaking as a former investigator and prosecutor, we actually loved cases that involve Bitcoin, way more than cash. And sometimes even more than wires because turns out Bitcoin is highly traceable, which I'll get into, as I tell you a little bit about this story.

KYLE BASS: Great. So, what happened?

KATHRYN HAUN: So, we're prosecuting some early cases involving criminal uses of Bitcoin. And my colleagues out in New York were prosecuting a case known as the Silk Road. And at that time, no one really knew who was running the Silk Road. The government was really trying to find out who was running the Silk Road, where were the people or person, he or she, it was unknown at the time who it was, was running the Silk Road, and where were they doing it from? Little did they know they were doing it right here from San Francisco. At that time, the mastermind of the Silk Road could have been anywhere in the world. And so, the US government was really trying to find out who was running this criminal enterprise, or depending on your perspective, libertarian paradise.

KYLE BASS: So, the Silk Road was essentially a marketplace from the way I understand it. And again, correct me. I'm not an expert in these things. And the marketplace had various nefarious items on it. So, what were some of the things that the Silk Road was purveying?

KATHRYN HAUN: Sure, well, you're exactly right, Kyle. It was a marketplace. It was an online marketplace, like an eBay, or an Amazon. But more akin to an eBay. So, there were vendors on this marketplace. And Silk Road was an online platform, and you could access it using TOR, which do you know what TOR is?

KYLE BASS: No.

KATHRYN HAUN: It stands for The Onion Router, okay. And it's basically a way to anonymously browse online.

KYLE BASS: