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Ep 48: How AI is Changing the Game for Legal & Compliance in Web3
41 Plays2 days ago
What if your AI assistant could explain complex crypto laws in plain English—and connect you with an actual expert if things got tricky? That’s the idea behind Crystal, built by lawyer and founder Joni Pirovich. We talk about the chaos of compliance, the myth of AI replacing lawyers, and why this tool could change the game.
Discover more: https://www.cryptococounsel.com
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Transcript
Introduction to Owl Explains and Episode Focus
00:00:06
Speaker
Hello and welcome to this Owl Explains Hootenanny, our podcast series where you can wise up on blockchain and Web3 as we talk to the people seeking to build a better internet.
00:00:17
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Owl Explains is powered by Avalabs, a blockchain software company and participant in the Avalanche ecosystem.
Highlight on Women-led Web3 Projects
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My name is Silvia Sanchez, project manager of Owl Explains, and with that, I'll hand it over to today's amazing speakers.
00:00:34
Speaker
Hello everybody, it's Sylvia once again and I am really excited about today's episode. At OWL Explains, we love featuring real-world projects, practical use cases, and the brilliant minds building in Web3.
00:00:47
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And I especially love when those initiatives are led by powerhouse women bringing clarity, creativity, and care to complex challenges.
Guest Introduction: Joni Pirovich
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Today's guest is doing just that.
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And also a little random fact, she was part of the first crypto panel I've moderated at a conference a couple years ago. She has ah beautiful energy. So let's welcome Joni Pirovich all the way in
Joni's Work in Crypto Compliance and AI Tools
00:01:09
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Australia. Hi, Joni.
00:01:10
Speaker
Hi, Sylvia. Thanks for having me. Awesome, we're really glad to have you. So just to give a ah little context to our listeners, Joni Pirovich is a lawyer, policy thinker, and now an AI founder.
00:01:23
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Joni is the founder of Bedazzle, a crypto specialist law firm, as well as Crypto Co-Counsel, a software development company focused on eliminating inefficient crypto compliance by blending specialist humans with AI tools.
00:01:37
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So CryptoCo Council is built by someone who understands exactly how complex crypto compliance can be.
Challenges in Global Crypto Compliance
00:01:44
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So the way you can think about it is that if you've ever wished for a legal sidekick that doesn't sleep and knows your jurisdiction inside out, you're definitely going to want to hear this.
00:01:53
Speaker
Okay, so... Let's start at the beginning, the genesis of CryptoCo Council. So, Joni, what is CryptoCo Council? What problem is it solving for lawyers and compliance professionals in crypto?
00:02:07
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Sure. Well, it was born out of advising in this space for nearly 10 years now, and I've i've 100% focused on crypto matters for at least the last seven.
Creation and Features of Crystal Legal Database
00:02:21
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So in that time, I've seen everything from individuals, your mum and dads, um or your high schoolers, or, you know, mid 20s and 30s,
00:02:33
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advocates and enthusiasts trying to get into crypto, um creating chaos for themselves and then seeking out um a crypto specialist like me to help them clean up the legal and the tax, all the way through to crypto exchanges, DAOs, service entities to DAOs, crypto funds and even banks as they've been considering whether to provide custody and and other sort of crypto services.
00:02:56
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So I've seen that no matter what the person or stage or maturity of business that they have, that any involvement with crypto involves some sort of compliance chaos.
00:03:10
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And that ranges from being able to find the relevant crypto-specific laws and regulatory guidance And if you've done that, then you've got to find people who are actually experienced and know how to apply those laws with reference to the history of of why we've done something a particular way and why we don't do it that way anymore ah because the the technology might have evolved or um the legal meta and the policy meta has moved on to a different sort of mischief. So it is and extremely dynamic area compounded by each different country trying to introduce laws and and approaches to
00:03:51
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either encourage the innovation or squash it out. And with all of that chaos and mess, I just thought, surely we all need something simpler. And and Crystal and crypto compliance software was born out of predominantly my own frustration in how much legwork it took to um to to just service clients effectively and also empower them to carry on that level of standard themselves.
00:04:23
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So crypto compliance software and and the whole crypto co-council concept was born. I love that that. In a way, it seems like necessity is the mother of invention. And there's no doubt that crypto law is super dynamic. I mean, you've got tax issues, securities law questions, AML, KYC requirements. It's like a never ending puzzle, no?
00:04:43
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Yeah. um So how does your AI tool help legal professionals navigate all of this? How does Crypto Code Council work? How do you update the database? Yeah. Sure. so So the backbone of Crystal is this global database of crypto-specific laws, regulatory guidance, policy consultations and other materials that lawyers or um strategic consultants will look to, you know, the official source of information to figure out what's legal in a jurisdiction and if there's no specific laws, you know, how are the regulators approaching
00:05:21
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a particular type of crypto activity. So ah that global database is something that I was collecting because I had to anyway over the last 10 years.
00:05:33
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But ah we made a decision to make a conscious effort of putting that database into an AI pipeline so that once you put an AI chatbot front end to that, it's a lot easier now to interact with that global brainpower of um all of the crypto specific laws around the world and it's taking away all of the time that it would take to find the relevant materials, um collate them and then search them.
00:06:05
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When you ask k Crystal, you know, summarize what the stablecoin legislation is around the world or crypto custody approaches, um across ah the EU and the US, we now have accelerated ability to get the legal information quickly and an impression of of what, you know, hundreds or thousands of pages of crypto-specific documents might be telling us.
00:06:31
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So the really important thing about the way Crystal produces her responses is they are cited and hyperlinked to the official sources. So in terms of the AI accountability and for you to know that there's no hallucinations involved in the response, you can very easily and quickly click the hyperlink and Check that it relates back to the official government website or or other official website.
00:06:57
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And if you wanted to, you can read the full document yourself. um But otherwise, you can just keep re-prompting Crystal to say, you know explain this particular requirement as if I'm a developer or as if I'm a C-suite executive or or if as as if I'm a politician trying to um announce good policy.
AI's Role in Legal Work and Enhancing Human Efforts
00:07:18
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The beautiful thing about Crystal is it takes complex crypto and crypto-illegal concepts and allows you to put them in your own language and has the accountability to go back to the official source.
00:07:30
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So, like, taking those inefficiencies away and and bringing a sense of productive compliance into play. That sounds super cool. I think that's definitely a big one, no? Preventing the AI hallucinations and basically getting the responses cited, hyperlinked, and just doing like this, i don't know, I'm visualizing more like as a spider web, no? It gives you, okay, this is the answer, but you can continue here, read the full article, get the the dig gist, no? And...
00:07:58
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and I think when we talk about AI, of course, there's the the conversation that AI is taking over jobs and all of this discourse.
00:08:09
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So should lawyers be worried or do you see AI more as a co-pilot rather than a replacement? What are your thoughts on that? Very strong thoughts on this. i I think that...
00:08:21
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the The way I'm building Crystal and and the way that I've told my team is important for us to build Crystal is that it's always got humans embedded in the delivery of of the AI efficiencies or the AI augmentations to business processes.
00:08:41
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So when you log into Crystal and and you start chatting with Crystal about you know, whatever the focus is for a day. If, for example, you're interested in saying, i would like to enter the US market as an existing crypto exchange and, you know, give me the lay of the land, give me the relevant legislation and regulation and licenses that I need to apply for.
00:09:04
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Yes, that will help you get up to speed and it might even take away the cost that you would have paid a consultant or a lawyer um to provide preliminary market entry advice. But the the more important thing is that we have the crypto professional directory that's accessible in chat.
00:09:22
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So once you finish talking to Crystal, you can say connect with a crypto pro and that will bring up a dialogue box that allows you to search US crypto lawyer and you might put in a couple of other keywords such as if you're a crypto exchange and wanting somebody with experience there and you hit search and you you will then be presented with crypto professionals that have been vetted by myself and my team who are the people that actually have experience in this this world and you can connect with them in a matter of seconds and and send the chat history or send a specific message to the crypto professional
00:10:01
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and there And anybody that's listed on the directory is subject to service standards, so they've got to get back to you ah within a certain time period so that you can have certainty and and really just keep up with the speed that the crypto industry expects.
User Features and Benefits of Crystal
00:10:17
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um but But you're embedding the humans right there, but the right humans, and um it's not intending to um take jobs, but it is intended to um connect the right humans that can deliver the right services ah once the background tasks or the initial tasks are sped up by AI.
00:10:39
Speaker
That sounds amazing. So it's basically enhancing the legal work, making it more efficient, not just in the knowledge search, as you were mentioning, you can go through this huge database, have it explained it to you in your language, but also connect you with a crypto professional, someone specific on that. So I think it also acts like a super smart search engine tailored to your needs, connecting you to the right person with that. So so quick I love how it basically covers that on um both ways, both for your self-exploration, but then for a specific consultation. So let's say, oh, sorry, go ahead.
00:11:17
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Well, and and it's just to say, it's not just lawyers. The crypto professional directory will span across developers, people with accounting, marketing, ah risk analysis, management experience, DAO governance,
00:11:31
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There's a number of different domains that are searchable that gets you to the right crypto pro anywhere around the world instantly. That's amazing. Wow. so So let's say a person starts using CryptoCo Council. What's the the usual workflow? Like what's the experience? Do they chat directly with it and then feed it documents? Like what would be a ah really quick description of ah this first and interaction with CryptoCo Council? Sure. well The sign up to Crystal Basic is very easy and ah we've got some free trial codes so anybody can try Crystal out for seven days without having to pay anything because we do think it's very important for people to try before they buy, especially with all of the AI tools flooding the market.
00:12:18
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But um if you're happy, then it's US $25 per month. And Crystal Basic is really access to that global crypto-specific legal database through that easy chat interface.
00:12:35
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And once you're in that chat interface, as I mentioned, you've got the CryptoPro directory, but you can also, through the drop-down menu, choose your large language model.
00:12:47
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So we've got support for all of the major models, you know, the OpenAI, the Anthropic, Google, each of the Groks and Google Gemini. We don't have support for DeepSeek yet, but this is API access to all of those major models within the one chat interface.
00:13:07
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So, gone are the days where you have to pay multiple subscriptions for ChatGPT or Claude or other ones, which can quickly add up per month. you actually can chop and change within the Crystal interface and see what each LLM um voice is saying for your particular question.
00:13:24
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if If you wanted to go to the effort of saying, well, I want to double check myself, I do rely on ah the OpenAI 01 LLM model, which is performing quite well at the moment, but hey, I might just check what Claude 3.7 Sonnet has to say because that's a popular model and I'm hearing good reviews about it. So,
00:13:46
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um The convenience of doing that all in the one interface is is in Crystal Basic, and that's the gateway product. um If you're happy with that basic functional functionality, then we're now starting to roll out Crystal Business subscriptions, which are at a higher price point, but it's designed to maintain more privacy and security around commercial and business data, but also has API connections to the CoinGecko crypto um cryptoric feeds, the BitQuery blockchain data feeds, and templates that are submitted, compliance templates that are submitted by our crypto pros around the world.
Encouragement for AI Adoption in Teams
00:14:27
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So this this is really where um the AI superpowers of Crystal are exciting because um all of the manual compliance tasks, and there going to be more and more compliance effort that that crypto businesses around the world are going to have to cover, we we now have a dedicated compliance engine with the right data inputs and with the right crypto pros submitting templates per jurisdiction to combine that with business data and and produce internal reporting and external compliance reporting and disclosures
00:15:05
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a lot quicker than we've ever had before. Oh, wow. no and And I think that's definitely a key part of it. And in our chat earlier, you mentioned something about a coolant system cool incentive system for keeping the database updated.
00:15:19
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Could you share a bit more about that? Yeah, so this is Crystal Credits. And um it's It's not a token on any blockchain yet, but it is the and sort of closed-loop incentive system where for any user, they don't have to be a crypto pro, but if they identify that there is a document missing from the crypto legal database, then they get a dollar crystal credit per document that is approved for addition to the database.
00:15:52
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And we are updating this this database every day. um I think in February we uploaded about 70,000 pages worth of of new crypto legal specific documents.
00:16:04
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and And Crypto Pros, they will also get crypto crystal credits for uploading their compliance templates and tagging which jurisdictions they they are are referable to and as each business, crystal business user, is accessing those templates, we've got the internal maths now still in testing, but um that they can be incentivised for the use of their IP, for the use of their templates from each business user yeah adopting those in their compliance processes.
00:16:39
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So yeah, Crystal credits um essentially pay for the AI tokens that are used up for every request that that Crystal completes.
00:16:50
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So you you want to be stacking your Crystal credits so that you can pay for all of the things that the system is doing for you. And it's it's really designed to recognize um people's effort and meaningful contributions to making the the compliance system and the compliance engine useful for crypto businesses everywhere around the globe.
00:17:12
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Amazing. And even the name sounds cool. Crystal credits. I feel like it's just meant to flow. Yeah. And I think anytime you insert like an incentive incentive system, um whether it is a token on a blockchain or not, or just credits on a video game, I think by human nature, there's always going to be like that, that drive to be like, oh, I got to accumulate this and get these points, these rewards. So and it's also neat that you've included that. Mm-hmm. So for crypto startups or just legal teams listening, how can they start integrating AI law tools into their workflows? Like what's one practical step for teams looking to leverage AI tools like Crypto Co-Counsel?
00:17:53
Speaker
I would say don't just scroll past the the LinkedIn or the Twitter or X sort of post or video. You actually need to take the effort to you know use the free trial code or or use the one week out free trial period.
00:18:11
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And only once you're actually using it, do you realize, oh my God, I've just... done something in 10 minutes that I could have that that would have otherwise taken me two or three hours and and it's that epiphany moment when you're actually using it that means you want to keep using it but the longer you sort of watch from afar and um admire the innovation or or admire the the the compliance problem that you have um you're just not getting your hands dirty and trying it and he Even um the sparks that flow and and the different way in which you might approach your compliance processes, it starts with understanding what the AI is capable of and how that changes your productivity capacity and what you're capable of.
00:19:00
Speaker
So you you you might treat Crystal as being an assistant in some tasks or a legal associate in others or um an executive or a mentor that you can bounce things off.
Future of AI in Legal Practices
00:19:13
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And so to improve your blind spots and to to improve um areas where where you feel like you haven't had a mentor, or you haven't been able to get the regular feedback from your supervisors, Crystal can, or or any ai any sort of general purpose ai is being used for those purposes for people that want to improve themselves, their way of thinking and their way of working.
00:19:37
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You know, all with a grain of salt. AI is not truthful all of the time, so you have to double check what it's saying, but um until you use it, you will not know what you're capable of.
00:19:49
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And I think that's a great way to put it. Don't just scroll past the social media. Don't just be an observer, but actually take the effort to use it, interact with it, dip your toes in it. Like, as as they say, no, you never know until you try. I think it's definitely true when you actually interact with a tool and realize, oh, wow, this is so efficient. It's optimizing my time.
00:20:10
Speaker
Like you mentioned, I did this hard thing in 10 minutes. I think that was like also, i think that's a really good way, especially for I think the older generation, not to like, oh, wow, I can do this. Because I think there tends to be a bit of skepticism or just, oh, this this thing, this AI, is sort of like a ah mystic oh way too to to see these technologies. But like, oh, you can actually...
00:20:32
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get this done ah efficiently, but also as you mentioned, you gotta double check and we be super sure. But speaking of compliance, now let's turn to the regulators. Do you think that regulators see AI as the tools they can use? Could we get to a point where AI is helping regulators enforce laws more effectively? like how How is it being used or how could it be used on the regulatory side of the spectrum?
00:20:58
Speaker
Well, actually one of the um projects on the feature roadmap is the regulator directory. So in in the same way that you can ah choose your crypto pro from the in-chat directory, my vision is that you can also select, okay, VARA in Dubai, ASIC in Australia,
00:21:21
Speaker
um from in chat as soon as the compliance report has been produced by crystal and you've had you know your internal crypto pros or external crypto pros review and sign off the report that sort of compliance pathway can be contained in crystal and submitted directly to multiple regulators around the world um not just one anymore so so My vision is actually that we we turn global crypto compliance into something that is much simpler than it currently is so that compliance can be as close to real time to crypto speed as we need it to be.
00:22:02
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And that's only when we reach that kind of level do we start to have a good go at protecting consumers from scams and fraud and harm which is what the regulators are trying to protect by a lot of ad hoc reviews of compliance processes and disclosures but to bring it forward and to be more real time I think we're actually now giving our crypto businesses and all of our users a real shot at safer innovation and involvement with crypto.
00:22:31
Speaker
That's great. And I like the the term you use as close to crypto speed. I think we all know what what that entails. It's super fast. Yeah. um yeah So building on that, fast forward five years or so, how how do you see AI transforming the legal industry, especially for Web3 and blockchain that, as you mentioned, is crazy fast? Like, what's your vision for AI's evolution in the tech legal space?
00:22:56
Speaker
Well, I'm a bit biased because I see it through the vision for for Crystal and for Crypto Co-Council, but i I honestly think, or my thesis is that more people and more businesses will spend a lot of their time in AI chat interfaces.
00:23:13
Speaker
or in AI-optimised interfaces. So we're already seeing a lot of word plugins where to the side you might have the AI working and suggesting track changes or how to optimise your drafting or to say, no, actually this clause is is not consistent with what this particular law requires.
00:23:32
Speaker
We're already seeing that in a lot of legal AI. mostly through Microsoft Word. um Google Gemini is is sort of catching up in your Gmail view as well as your Google Docs view, but um we sort of don't have as as many bots operating in Slack or Telegram or WhatsApp groups.
00:23:53
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to sort of inject, and um you know, or moderate some sense based on whatever laws might be applying to that particular chat group or crypto token.
00:24:04
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So i think that AI will embed itself in more of those interfaces and and we will also have um the traditional AI chat interface being used.
00:24:16
Speaker
So unless lawyers and law firms meet people and businesses in those interfaces, I do think that lawyers will get forgotten. and And the marketing that we see from lawyers to try to bring people and clients back to them or to remind them that they have to go back to the lawyer for the human review, where...
00:24:37
Speaker
that's where like Crystal crystal is is my way of embedding the right humans in the in the interfaces that the people and businesses are. And and that the only revenue model or pricing model that I think works is granting the credits to the underlying people.
00:24:56
Speaker
I don't think that lawyers will be able to get away with high hourly rates going forward. I think a lot of the pricing of legal work is is going to be denominated or understood in terms of well, I could have done this with, you know, 100 or 1,000 AI tokens, um which would have cost maybe $2 worth of of um AI tokens. So, you know, why, lawyer, what is the value that you're bringing to charge $1,000 an hour?
00:25:30
Speaker
um that That becomes a really hard sell, and especially as the AI gets better and better. So I do think pricing models will change. Lawyers will have to change the way in which they deliver services and be part of the ai flows and pathways. But I still think there are a lot of slow-moving behemoth institutions that will like traditional law the way that they've always had it.
00:25:55
Speaker
And I don't think that that will necessarily disappear in five to ten years, but a lot of the legal market will be disrupted and have to transform. Oh, wow. that That's a very interesting way to put it.
00:26:07
Speaker
And it's, yeah, I think it's a lot of value in embedding the right humans, like you said, but also evolving the price models. um Wow, Joni, I think this has been a ah really cool discussion. i think we're almost out of time on the Delecure at our clock, but...
00:26:24
Speaker
it's It's quite clear that AI is here. It's changing how legal professionals engage with crypto law. But before we wrap up, is there anything else you'd like to add? Where can our listeners learn more about Crypto Co-Counsel and follow your work?
00:26:39
Speaker
Yeah, well, they can find us at crystalchat.ai or cryptococouncil.com. And we're posting a lot with latest feature releases and what we're doing, what we're thinking across X and LinkedIn, as well as you'll you'll see various things on the website.
00:27:00
Speaker
You can follow me on LinkedIn. That's mostly where I post. And i hang out on Telegram at Joni at Bedazzle. which is the crypto specialist law firm that I that i still run. So um I'm here. i try to respond at crypto speed all of the time. Some people actually ask me whether I have a bot working for me, but I still do a lot of the response as a human. So ah do do reach out. I try to read everything and I respond where I can.
00:27:29
Speaker
Thank you so much, Joni. Great to chat with you as always. Well, that's it for this episode of OWL Explains, where clarity meets curiosity in the world of Web3. Huge thanks to Joni Pirovich for showing us how AI can be a real ally for crypto lawyers and compliance pros.
00:27:46
Speaker
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00:27:58
Speaker
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00:28:13
Speaker
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