WEBVTT - Will Tether Crash Next? 0:00:00.450 --> 0:00:03.960 There's a lot of questions surrounding Tether, the third largest 0:00:03.960 --> 0:00:07.530 crypto by market cap with the collapse of USD. People 0:00:07.530 --> 0:00:10.289 want to be sure that there is liquid backing. Dollar 0:00:10.289 --> 0:00:15.210 for dollar Behind USD 80 is the world's biggest stablecoin 0:00:15.210 --> 0:00:18.930 too big to fail? Today we welcome the Chief technology 0:00:18.930 --> 0:00:22.560 officer of Tether, Paolo Arduino to the show to ask 0:00:22.560 --> 0:00:26.610 these tough questions. We also discuss FTC's audits and the 0:00:26.610 --> 0:00:30.690 future of cryptos in general. We're a fairly stable podcast 0:00:30.690 --> 0:00:35.490 with unstable podcast hosts. Hopefully our guests can bring some 0:00:35.490 --> 0:00:41.460 stability to the show. On this episode, number 655. Of 0:00:41.460 --> 0:00:42.840 the Bad Crypto podcast. 0:00:42.960 --> 0:00:44.420 Five, four. 0:00:44.850 --> 0:00:52.320 Three. Ask are there all of the actors whose bad? 0:01:11.270 --> 0:01:13.640 I'm feeling unstable. 0:01:13.880 --> 0:01:19.649 Somebody hodl me. Is anything new? Yeah. You're not stable. 0:01:19.670 --> 0:01:21.949 Neither one of us are stable. This is the world's 0:01:22.400 --> 0:01:26.960 most unstable crypto currency podcast. Unstable for five and a 0:01:26.959 --> 0:01:28.429 half years of instability. 0:01:28.850 --> 0:01:31.970 Wow. Welcome to the Bad Crypto podcast. We are the 0:01:31.970 --> 0:01:37.309 metaverse morons, the web3 weenies, the algorithmic asshats, the bad 0:01:37.310 --> 0:01:40.490 crypto bad asses, duck, duck going stuff so you don't 0:01:40.490 --> 0:01:44.419 have to. And we are really excited about today's show 0:01:44.420 --> 0:01:48.050 because it's rare that you get sea level people from 0:01:48.050 --> 0:01:51.130 the big cryptos to come on the show to to 0:01:51.170 --> 0:01:53.810 talk about what's going on. We've tried to reach out 0:01:53.810 --> 0:01:58.400 to the CEO of Bitcoin. No response. You know, so 0:01:58.400 --> 0:02:01.010 maybe one day that'll happen. I don't know. 0:02:01.430 --> 0:02:04.370 Yeah, this one's going to answer some questions because we 0:02:04.370 --> 0:02:07.310 test some on some some pretty interesting topics with this guy, 0:02:07.310 --> 0:02:09.680 because I know a lot of people are thinking, wow, 0:02:09.680 --> 0:02:13.010 is is USD, is tether, is it stable? Is it 0:02:13.010 --> 0:02:15.380 going to last the long run? What's going to happen? 0:02:15.380 --> 0:02:18.350 Is it going to crash? And so we cover some 0:02:18.350 --> 0:02:22.369 of that today with the CTO of Tether who assures 0:02:22.370 --> 0:02:24.920 us that maybe or maybe not. We'll see. Awesome. 0:02:25.370 --> 0:02:28.700 Well, you believe him? Let's find out. Here we go. 0:02:32.610 --> 0:02:37.440 I guess you can say we're a stable podcast hosted 0:02:37.440 --> 0:02:40.260 by unstable people because we've been doing this five and 0:02:40.260 --> 0:02:41.220 a half years now. Trevor. 0:02:42.780 --> 0:02:44.190 So which one's the stable one? 0:02:44.970 --> 0:02:45.810 Clearly, Me. 0:02:46.470 --> 0:02:47.640 Clearly it. 0:02:47.639 --> 0:02:50.220 Is. Is there really? Is that even up for debate? 0:02:50.490 --> 0:02:53.430 I seem pretty stable. I mean, I'm definitely more more, 0:02:53.639 --> 0:02:55.200 you know, steady. 0:02:55.500 --> 0:02:57.959 I expect you to break out in a re any second. 0:02:58.440 --> 0:03:01.540 I'm not. I'm not in that easily offended. Thank you. 0:03:02.190 --> 0:03:05.130 Well, as long as we're talking about stable, one of 0:03:05.130 --> 0:03:09.480 the most controversial subjects in the crypto world has been 0:03:09.480 --> 0:03:14.160 stable coins, and one of the coins has been in 0:03:14.160 --> 0:03:18.660 the spotlight again and again with lots of questions surrounding 0:03:18.660 --> 0:03:22.920 it in spite of its massive adoption. Of course, we're 0:03:22.919 --> 0:03:26.970 talking about USD tether and today we are privileged to 0:03:26.970 --> 0:03:32.340 have with us the CTO of Tether, Mr. Paolo Arduino. Paolo, 0:03:32.340 --> 0:03:33.840 thanks for coming on Bad crypto. 0:03:34.470 --> 0:03:35.910 Hey guys. Thank you for having me. 0:03:36.630 --> 0:03:38.880 Absolutely. Why don't you go ahead and give us a 0:03:38.880 --> 0:03:41.940 little bit of your history in crypto and how you 0:03:41.940 --> 0:03:43.320 came to be with Tether. 0:03:44.370 --> 0:03:47.190 Sure. So I started coding in a very young age. 0:03:48.610 --> 0:03:52.060 So I started cutting since I was eight years old 0:03:52.510 --> 0:03:56.470 and it kept kept growing in me. The Passion always 0:03:56.470 --> 0:04:03.490 excited about privacy, could top WiFi, distributed applications and the 0:04:03.490 --> 0:04:07.720 power of computing. So, you know, initially at the beginning 0:04:07.720 --> 0:04:12.880 of my career worked on a super cool communication system 0:04:12.880 --> 0:04:17.979 for battlefields, for, you know, client communications in battlefields and then, 0:04:17.980 --> 0:04:20.979 you know, was in Italy, didn't pay much. So I 0:04:20.980 --> 0:04:24.909 moved to finance. To, you know, trying to make up 0:04:24.930 --> 0:04:29.409 the living. And so started working for a few hedge funds, 0:04:29.410 --> 0:04:33.630 started to build software for them, understanding all the intricacies, 0:04:33.640 --> 0:04:38.650 intricacies of finance. You know, also the bad habits of 0:04:38.920 --> 0:04:46.450 finance and the really, really bad infrastructure of traditional financial systems. So, 0:04:46.450 --> 0:04:49.120 you know, it's just to summarize, it is all cash 0:04:49.120 --> 0:04:54.550 buy together, buy rubber and beans. In 2014, I had 0:04:54.550 --> 0:04:58.480 the privilege to start becoming and well becoming one of 0:04:58.480 --> 0:05:01.690 the developers of the Phoenix, just focusing on matching engine. 0:05:03.460 --> 0:05:07.270 The platform was more and more adopted and hence they 0:05:07.270 --> 0:05:10.930 had some sort of lags and issues with the performances 0:05:10.930 --> 0:05:13.660 of their matching engine. So I was asked to, given 0:05:13.660 --> 0:05:19.270 my expertise in parallel computing scalable applications to was asked 0:05:19.270 --> 0:05:23.739 to improve that. And in 2017 I became also the 0:05:23.740 --> 0:05:30.250 CTO of Tether. So taking care of the security side, blockchains, 0:05:30.250 --> 0:05:36.930 integrations and you know swap of multisig and similar. So yeah, 0:05:36.940 --> 0:05:40.349 that is my energy's my story. I'm just a dude 0:05:40.350 --> 0:05:40.990 that codes. 0:05:42.010 --> 0:05:46.240 Dude that codes at some of the highest levels, right? 0:05:46.600 --> 0:05:49.570 And I mean, from what you've done, you know, working 0:05:49.570 --> 0:05:52.210 with the military as a researcher and some of those things, 0:05:52.390 --> 0:05:55.540 learning about cryptography and doing some of those things kind 0:05:55.540 --> 0:05:57.400 of prepared you for where you are today, which is 0:05:57.400 --> 0:06:00.300 an exciting thing. And I think a lot of people, 0:06:00.370 --> 0:06:02.830 they're looking at your background. They're saying, okay, wait a second, 0:06:02.830 --> 0:06:07.930 you're the CTO of Bitfinex and the CTO of Tether. 0:06:08.170 --> 0:06:10.810 How does that work and how does they work together? 0:06:11.920 --> 0:06:14.470 Well, and also I'm the CSO that hole punch this 0:06:14.470 --> 0:06:18.159 news amazing peer to peer communication system that we are building. 0:06:19.630 --> 0:06:22.890 That sounds really busy to me. That's like. That's a 0:06:22.890 --> 0:06:23.529 lot of stuff. 0:06:23.540 --> 0:06:27.010 Yeah. That's your DIY mask over there. Yeah. I mean, I. 0:06:27.010 --> 0:06:28.810 Hope you're delegating like crazy. 0:06:30.640 --> 0:06:34.570 I'm a control freak. So, but also, yeah, I have 0:06:34.570 --> 0:06:38.650 great teammates, so total delegation, but I like to call 0:06:39.220 --> 0:06:42.700 the shots when it comes to architecture and and security. 0:06:43.750 --> 0:06:47.350 You know, the history of crypto has been told by 0:06:47.350 --> 0:06:51.700 so many hacks that I'm always, you know, scared and always, 0:06:51.700 --> 0:06:55.030 you know, making sure that I can review every single 0:06:55.029 --> 0:06:57.490 line of code that is pushed to the systems to 0:06:57.490 --> 0:06:59.500 make sure that, you know, we we don't have any 0:06:59.500 --> 0:07:04.029 any problems. So. Well, yeah, really. So on the on 0:07:04.029 --> 0:07:06.280 the Bitfinex side, well, we have an amazing team of 0:07:06.279 --> 0:07:10.120 engineers and I still the main developer of the machine engine. 0:07:11.020 --> 0:07:13.900 You know, it's kind of one of my passions to 0:07:13.900 --> 0:07:16.840 make sure that we can squeeze as much performance as possible. 0:07:17.230 --> 0:07:19.990 So these with this last update that we published just 0:07:20.000 --> 0:07:22.600 few weeks ago, we were able to go below one 0:07:22.600 --> 0:07:26.800 millisecond of fool around latency. That is quite an achievement 0:07:26.800 --> 0:07:30.670 for a platform that started from crypto right in 2014 0:07:30.670 --> 0:07:34.090 when I joined, we could process only 50 to 100 0:07:34.090 --> 0:07:36.380 or two per second. Now we are basically at 1 0:07:36.380 --> 0:07:40.600 million or third per second, like in 2014 crypto exchanges 0:07:40.600 --> 0:07:44.980 where felt like more e-commerce keys for bitcoin rather than, 0:07:45.790 --> 0:07:49.100 you know, our additive trading platforms. And nowadays, while the 0:07:49.120 --> 0:07:52.150 fast forward we hired not just us but the general 0:07:52.150 --> 0:07:57.220 industry hired many professionals from other industries. And now things 0:07:57.220 --> 0:08:02.710 seem quite better from the infrastructure point of view and 0:08:02.710 --> 0:08:03.460 on the other side. 0:08:06.100 --> 0:08:09.010 Did Did you say a million transactions per second? 0:08:09.850 --> 0:08:10.390 That's correct. 0:08:10.690 --> 0:08:12.910 And is that bitfinex or is that tether? 0:08:13.690 --> 0:08:16.119 No, it's bitfinex. So, you know, Dimension Engine is the 0:08:16.120 --> 0:08:19.090 part of the system that takes the orders from the 0:08:19.090 --> 0:08:21.970 different users and matched them. Right. So of course we 0:08:21.970 --> 0:08:24.910 go we go in parallel or multiple. So we have 0:08:24.910 --> 0:08:28.300 one CPU dedicated per trading pair. So you can every 0:08:28.300 --> 0:08:32.260 trading pair can independently use as much performance as possible 0:08:32.590 --> 0:08:34.000 for four per core. 0:08:35.020 --> 0:08:38.440 Well, let's go ahead and get to basics, because there's 0:08:38.440 --> 0:08:39.790 a lot of people that might be listening to the 0:08:39.790 --> 0:08:42.940 show that don't even understand how a stablecoin works. So 0:08:43.270 --> 0:08:48.550 give us a basic bird's eye definition of tether and 0:08:48.550 --> 0:08:49.420 how it works. 0:08:51.990 --> 0:08:56.160 Sure. So there is as simple as a dollar and 0:08:56.160 --> 0:09:00.120 a blockchain. Now let me expand on that. So that 0:09:00.179 --> 0:09:03.030 I was born in 2014, right? Tetris is the company 0:09:03.150 --> 0:09:09.180 that created the concept of Stablecoins. So the reason of 0:09:09.179 --> 0:09:11.880 two exists of Tether at the beginning was I'm not 0:09:11.880 --> 0:09:15.900 sure how many of you guys that are listening remember 0:09:15.900 --> 0:09:23.610 the crypto sphere and ecosystem in 2014, but definitely was challenging, right? So. 0:09:25.400 --> 0:09:28.340 Bitcoin was traded on four or five top exchanges at 0:09:28.340 --> 0:09:34.309 a time. There was Bitfinex, Kraken, Bitstamp, Coinbase and Okcoin. 0:09:35.240 --> 0:09:40.310 And in order to run an exchange or having, you know, 0:09:40.309 --> 0:09:43.550 in a health exchange, you need market makers. But also 0:09:43.760 --> 0:09:46.070 you want to make sure that the price of Bitcoin 0:09:46.070 --> 0:09:49.520 is pretty much the same across all the exchanges. So. 0:09:51.460 --> 0:09:54.069 In August 13 was the first time Bitcoin went above 0:09:54.070 --> 0:09:57.370 $1,000 and you had some exchanges that were trading at 0:09:57.370 --> 0:10:01.449 1.2 thousand. Other exchanges that were trading $900. Right. Because 0:10:01.840 --> 0:10:06.040 there is in for that was that in order to 0:10:06.070 --> 0:10:09.580 keep prices aligned across exchanges you had. You needed to 0:10:09.580 --> 0:10:14.559 have arbitrage reverse arbitrage. You're smart. Those traders that sell 0:10:14.559 --> 0:10:17.199 bitcoin on the exchange where the price is higher and 0:10:17.200 --> 0:10:19.330 buy back on the exchange where the price is lower. 0:10:19.570 --> 0:10:21.400 Of course, when you do that, you have to move 0:10:21.400 --> 0:10:25.330 dollars from one exchange to another. And in 2014, moving 0:10:25.330 --> 0:10:28.120 dollars from one exchange to another would take five days. 0:10:28.300 --> 0:10:35.110 So the arbitrage opportunity was basically gone. So the reason 0:10:35.140 --> 0:10:39.460 of tether to exist initially was, okay, let's use this 0:10:39.460 --> 0:10:42.790 pretend technology that Bitcoin created. It was called blockchain and 0:10:42.790 --> 0:10:46.860 why we don't use blockchain to move dollars. So at 0:10:46.870 --> 0:10:50.200 least at that time you could move, well, Bitcoin in 0:10:50.200 --> 0:10:53.890 10 minutes. Bitcoin blockchain is one one block every 10 0:10:53.890 --> 0:10:57.820 minutes pretty much. And we wanted to just use the 0:10:57.820 --> 0:11:01.449 same thing for tether. And so suddenly we could optimized 0:11:02.110 --> 0:11:07.750 the trading markets for four for across exchanges. So that 0:11:07.750 --> 0:11:11.500 is a symptom of a growing and more mature industry. 0:11:12.620 --> 0:11:16.580 And nowadays terror is becoming many more things. Is actually 0:11:16.580 --> 0:11:20.120 an inflation hedge for Turkey, for El Salvador, for, you know, 0:11:20.120 --> 0:11:24.740 for Venezuela, for Argentina and so on. So basically, is 0:11:25.130 --> 0:11:28.400 this total monetary base of terror is growing because people 0:11:28.400 --> 0:11:33.140 just need to not be subject to the enormous inflation 0:11:33.140 --> 0:11:36.380 due to their, you know, national currency like the Turkish 0:11:36.380 --> 0:11:41.420 for the last 80% year on year to, you know, 0:11:41.420 --> 0:11:44.660 from monetary policies and so on. Right. So is actually 0:11:44.660 --> 0:11:47.330 being used as a way to as a lifeline for 0:11:47.330 --> 0:11:51.410 for many people around the world, especially in virtual markets 0:11:51.410 --> 0:11:52.340 and developing countries. 0:11:53.420 --> 0:11:55.790 Yes. So somebody if they have some Bitcoin, right. Let's 0:11:55.790 --> 0:11:57.829 just say and say, hey, you know what, I think 0:11:57.830 --> 0:12:00.560 the price of Bitcoin is going lower. I'm going to 0:12:00.559 --> 0:12:04.459 sell my Bitcoin, But they don't typically sell the Bitcoin 0:12:04.880 --> 0:12:07.250 out to their bank account. They normally will put it 0:12:07.250 --> 0:12:09.770 in USD and they're going to put it in Usdc 0:12:09.950 --> 0:12:13.489 or some other stablecoin. Now we've seen what happened to 0:12:13.490 --> 0:12:17.780 USD with Luna, right? We saw how they were overleveraged. 0:12:17.780 --> 0:12:21.080 They didn't have enough. We just went through this horrendous 0:12:21.080 --> 0:12:23.689 thing with FCX. And so I know a lot of 0:12:23.690 --> 0:12:26.839 people are out there right now talking about what happened 0:12:26.840 --> 0:12:30.410 if what happens if tether fails? What happens if Tether 0:12:30.410 --> 0:12:33.679 does not have enough in their reserves to get us 0:12:33.679 --> 0:12:38.030 through this? Bitcoin we could see sub $5,000 price in 0:12:38.030 --> 0:12:42.080 bitcoin because people wouldn't have a mechanism to easily get out. 0:12:42.380 --> 0:12:45.589 And so I guess my question to you, Paolo, would 0:12:45.590 --> 0:12:50.179 be how do you ensure that tether never goes down? 0:12:50.179 --> 0:12:55.160 Because we need this decentralized stablecoin more than ever because 0:12:55.160 --> 0:12:59.059 we are on the precipice of this technocracy that wants 0:12:59.059 --> 0:13:02.120 to bring in these central bank digital currencies and they 0:13:02.120 --> 0:13:04.130 want to get rid of a lot of this crypto stuff. 0:13:04.280 --> 0:13:06.440 So how do we build up the faith and ensure 0:13:06.440 --> 0:13:07.820 that tether never crashes? 0:13:09.200 --> 0:13:12.890 Well, just to be clear, Tether has older reserves that 0:13:12.890 --> 0:13:16.219 are extremely liquid, right? So there is a huge difference 0:13:16.220 --> 0:13:19.280 between Terra and, you know, all the other stablecoins that 0:13:19.280 --> 0:13:24.740 failed and tether. So with the latest attestation we have seen, 0:13:24.740 --> 0:13:30.230 we have shown that 82.5% of of the assets of 0:13:30.230 --> 0:13:34.400 tether are cash and cash equivalents. We increased the number 0:13:34.400 --> 0:13:38.510 of the exposure to U.S. Treasury bills. You know, all 0:13:38.510 --> 0:13:43.080 that craziness about, you know, the commercial papers. Well, we 0:13:43.580 --> 0:13:46.610 we show to our community that in less than one 0:13:46.610 --> 0:13:49.790 year we could do take the $30 billion that we 0:13:49.790 --> 0:13:55.480 have in in in commercial papers and move everything to U.S. T-bills. Right. 0:13:55.490 --> 0:14:00.080 So tether listen to the community and act in the 0:14:00.080 --> 0:14:04.820 best interest of the community. So the rest of the 0:14:04.820 --> 0:14:09.830 remaining 70% of assets are extremely collateralized assets by extremely 0:14:09.830 --> 0:14:13.880 with the collateral being extremely liquid. No FTT, nothing like 0:14:13.880 --> 0:14:18.710 that is overly overly collateralized assets. We have displayed also 0:14:18.710 --> 0:14:22.700 with Celsius with all the other companies that blew up. 0:14:22.700 --> 0:14:26.600 That tether has been the only one. Only company being 0:14:26.600 --> 0:14:33.050 exposed to these market issues has taken a risk management 0:14:33.050 --> 0:14:37.850 extremely seriously. You know, everyone is looking at obsessed by tether, 0:14:38.120 --> 0:14:41.430 but look at all the companies that are failing, right? 0:14:41.450 --> 0:14:44.960 So all the companies that we are consider the white knights, 0:14:45.260 --> 0:14:50.640 the holy heroes of the crypto industry. And yet, you know, 0:14:50.690 --> 0:14:55.820 they all failed their customers. Tether has older reserves that 0:14:55.820 --> 0:15:00.470 are extremely liquid, was able to process $7 billion in 0:15:00.470 --> 0:15:04.910 redemptions in you know in between the 14 and 15 0:15:04.910 --> 0:15:10.100 of May ensuing 48 hours process $7 billion silver redemption 0:15:10.100 --> 0:15:14.210 that where around 10% of our reserves. No bank in 0:15:14.210 --> 0:15:16.670 the world can do that. The first bank that tried 0:15:16.670 --> 0:15:20.060 to do that was Washington Mutual in 2008, and they 0:15:20.060 --> 0:15:26.240 went belly up that they're adding $20 billion in 30 days. 0:15:26.240 --> 0:15:32.180 That was 30, 20, 25% of our reserves. And recently tether, tap, 0:15:32.180 --> 0:15:38.480 redeem always redemption honored no failed to honor single redemption 0:15:38.630 --> 0:15:43.250 all redeem at $1. So I mean we is not 0:15:43.250 --> 0:15:45.680 that we don't have enough information we have a ton 0:15:45.680 --> 0:15:48.860 of information about ourselves out there but also we have 0:15:48.860 --> 0:15:52.670 something that others don't have that are facts, right? So 0:15:52.670 --> 0:15:56.360 we have facts that say that we can redeem what 0:15:56.360 --> 0:15:59.990 people need in cash in dollars. Right. 0:15:59.990 --> 0:16:03.430 So let me let me explain why people are obsessed, Paolo. 0:16:03.440 --> 0:16:05.810 People are obsessed because if you look here at the 0:16:05.810 --> 0:16:08.600 crypto market, cap tether is the number three in crypto 0:16:08.600 --> 0:16:12.710 market cap with a market cap of $65 billion ahead 0:16:12.710 --> 0:16:17.390 of U.S. DC, which is at 44 billion. On your website, 0:16:17.390 --> 0:16:21.530 you talk about transparency and say, Here's how we're backed. 0:16:21.710 --> 0:16:26.390 But the audit is is still not happening. This article 0:16:26.390 --> 0:16:30.440 in Cointelegraph goes back to July of 2021. Tether Promises 0:16:30.440 --> 0:16:33.860 Audit in months as Paxos claims USD is not a 0:16:33.860 --> 0:16:37.580 real stablecoin. So this was more than a year ago. 0:16:37.730 --> 0:16:40.750 So I went looking. All right. Has any information been released? 0:16:40.760 --> 0:16:44.420 I ended up at BLOCK Works and the page that 0:16:44.630 --> 0:16:47.660 the headline is Tether Pushes Back Timeline and Audit Report. 0:16:48.020 --> 0:16:50.600 I get a four or four. It's gone from the website, 0:16:50.600 --> 0:16:54.230 so I had to go to archive.org to find the 0:16:54.230 --> 0:16:57.920 actual article that was captured but is no longer there. 0:16:58.100 --> 0:17:01.580 Where were you said that you promise a full review 0:17:01.580 --> 0:17:05.590 of its books and the timeline is being pushed back. 0:17:05.600 --> 0:17:07.790 Of course, you're the you're the guy they go to 0:17:08.060 --> 0:17:11.090 for this in which you said it was likely months 0:17:11.090 --> 0:17:15.350 away still. So the question is, is why is this 0:17:15.350 --> 0:17:18.440 taking so long to get an audit? 0:17:19.440 --> 0:17:23.360 Right. Let's unpack that. Right. So you you rightfully express 0:17:24.710 --> 0:17:27.170 the opinion that a few people in the industry have. Right. 0:17:27.170 --> 0:17:30.889 So let's look at the first thing. So no other 0:17:30.890 --> 0:17:35.930 out there. Stablecoin has audits. The industry standard is attestations, 0:17:35.930 --> 0:17:38.630 so I think is unfair to single us out. That 0:17:38.630 --> 0:17:41.660 is the first thing. Second thing is, yes, we are 0:17:41.660 --> 0:17:44.150 working on an audit. First of all, a few months 0:17:44.150 --> 0:17:48.500 ago is around three months ago we moved from our 0:17:48.500 --> 0:17:54.770 accounting company. That was more common, right was top well, 0:17:54.770 --> 0:17:57.950 was the 12th biggest company in the world to a 0:17:57.950 --> 0:18:01.070 top five company in the world that is just out 0:18:01.070 --> 0:18:05.540 the first one outside a big four companies right that 0:18:05.540 --> 0:18:09.909 two attestations that the accounting. So we actually have the 0:18:09.910 --> 0:18:13.360 company that does accounting, that does at the stations that 0:18:13.359 --> 0:18:19.179 is the most reputable among the others Stablecoins. So also 0:18:19.180 --> 0:18:22.449 we are working. So I will let before we go there, 0:18:22.450 --> 0:18:25.090 let me explain why doing an audit with also a 0:18:25.090 --> 0:18:30.550 big four is so difficult. Because we have contacted them 0:18:30.560 --> 0:18:32.530 and we try to work with a few of them 0:18:32.540 --> 0:18:35.630 of the big four. And the issue is that without 0:18:35.630 --> 0:18:39.950 having clear regulations on stablecoins, they don't want to take 0:18:40.250 --> 0:18:43.080 the risk for them. Is there a potential reputational risk? 0:18:43.280 --> 0:18:48.139 So how you can fully audit something that you don't 0:18:48.140 --> 0:18:52.490 know exactly how you should own it, right? Because if 0:18:52.490 --> 0:18:55.880 there is no regulator, be great. It of course that 0:18:55.880 --> 0:18:58.790 tells you how many we each type of reserves are allowed, 0:18:58.790 --> 0:19:00.770 how many reserves, what is the type of backing that 0:19:00.770 --> 0:19:03.379 is allowed? What is there processes that you should allow 0:19:03.380 --> 0:19:07.580 and so on. Let that takes enormous risk on the 0:19:07.580 --> 0:19:10.700 shoulders of the big four. So they have too much 0:19:10.700 --> 0:19:13.340 to lose I think is unfair, but it is what 0:19:13.340 --> 0:19:17.510 it is. We got this exact answer now. We believe 0:19:17.510 --> 0:19:21.260 that with video and there are right now, right now 0:19:21.260 --> 0:19:25.129 other companies interested in proceeding with the audit is not 0:19:25.130 --> 0:19:27.410 that we didn't try it. We are ready and we're 0:19:27.440 --> 0:19:34.250 working towards it. We have again, we changed our accounting 0:19:34.250 --> 0:19:37.790 company just to prove that we can raise the bar, 0:19:38.210 --> 0:19:42.130 and that is that remains our top priority. So again, 0:19:42.140 --> 0:19:45.830 is not something that only is this is not just 0:19:45.859 --> 0:19:49.010 our issue is an issue of the industry and definitely 0:19:49.010 --> 0:19:51.980 have the accident didn't help. Right. So the more you 0:19:51.980 --> 0:19:55.070 make it a step forward, the more people are scared 0:19:55.070 --> 0:19:59.420 because you said, well, we have this claim to have 0:19:59.420 --> 0:20:04.340 a gap audit. FDX was, you know, so regulated and 0:20:04.340 --> 0:20:08.149 look what happened. So I can tell you that auditors 0:20:08.150 --> 0:20:11.600 are scared. So it takes time. You know, I'm the 0:20:11.600 --> 0:20:15.190 first one to say that unfortunately, is taking more time 0:20:15.200 --> 0:20:18.109 than what we wanted. We are not alone in not 0:20:18.109 --> 0:20:20.540 having an audit. And also the guys that claim to 0:20:20.540 --> 0:20:24.020 have an audit, you know, they went belly up. So 0:20:25.730 --> 0:20:30.440 in this way, the auditing firms are extremely scared. And 0:20:30.440 --> 0:20:32.720 so we need now to regain the trust for an 0:20:32.720 --> 0:20:33.680 entire industry. 0:20:34.890 --> 0:20:40.770 So you understand why it looks questionable to people, because, 0:20:41.100 --> 0:20:43.830 you know, this is not the first time there's been 0:20:43.830 --> 0:20:49.500 something that's that's happened that that's questionable. The attestation that 0:20:49.740 --> 0:20:52.439 was done by tether probably before you came on in 0:20:52.440 --> 0:20:57.810 2017 showed that Bitfinex, which is a sister company, transferred 0:20:57.810 --> 0:21:01.980 382 million to the bank account just before the attestation 0:21:01.980 --> 0:21:05.550 took place and you guys settled the case. Nobody admitted 0:21:05.550 --> 0:21:08.280 or denied. You know, the allegations were true or not, 0:21:08.280 --> 0:21:11.940 but it's certainly suspicious. And that's I think that's why 0:21:11.940 --> 0:21:15.510 people are rightfully so concerned to ask these questions. 0:21:16.859 --> 0:21:21.180 I'm not so. The beauty of the beauty is that 0:21:21.180 --> 0:21:24.480 people should be allowed to ask questions and answers should 0:21:24.480 --> 0:21:29.220 be given. Right. So I'm not annoyed by people asking question. 0:21:29.220 --> 0:21:33.900 Absolutely not. What I'm saying is that this industry, you know, 0:21:33.900 --> 0:21:39.480 my you know, my scene, that everything is easy from 0:21:39.480 --> 0:21:43.710 the outside. But we have fought both with Tether, with bitfinex, 0:21:43.710 --> 0:21:46.860 with hole punch, which seen for the industry more than 0:21:46.859 --> 0:21:49.770 anyone else and why. And everyone was looking at us. 0:21:50.310 --> 0:21:53.580 Many other companies failed. So what I'm saying is that 0:21:53.580 --> 0:21:58.140 questions are always fine, right? So, absolutely. But the problem 0:21:58.140 --> 0:22:02.200 is that what I find I'm finding myself and a 0:22:02.250 --> 0:22:04.800 little bit bitching about it is like being single out 0:22:04.800 --> 0:22:08.220 or like being like that. This black sheep, when you 0:22:08.220 --> 0:22:10.890 know all the mighty heroes are failing around. 0:22:11.700 --> 0:22:14.010 I don't know that they're necessarily going after you or 0:22:14.010 --> 0:22:17.490 targeting you like that. They're just trying to see transparency 0:22:17.490 --> 0:22:21.210 within the space. Right. And my thing would be this 0:22:21.210 --> 0:22:23.729 is that I don't know how what tethers do or 0:22:23.730 --> 0:22:26.850 if they're doing anything wrong. I trust tether I have USD. 0:22:27.060 --> 0:22:30.149 If it collapsed, I would be very sad boy. Right. 0:22:30.840 --> 0:22:34.110 But what I would like to see is some sort 0:22:34.109 --> 0:22:38.219 of proof of transparency within exchanges, right? So it could 0:22:38.220 --> 0:22:42.780 be pretty pot proof of transparency. And any time I'd 0:22:42.780 --> 0:22:45.480 like to look at and see, oh look you know 0:22:45.990 --> 0:22:49.979 tether has this Binance has the oh look the USD 0:22:50.130 --> 0:22:53.040 are USD. Oh I can look and see and it's 0:22:53.040 --> 0:22:57.200 almost like this power if you know in my mind. Right. 0:22:57.210 --> 0:22:59.160 And I think a lot of people's mind is if 0:22:59.160 --> 0:23:02.409 I give you $10,000 or I'm buying tether with $10,000, 0:23:02.410 --> 0:23:05.669 that $2,000 just going to a bank account or something. Right. 0:23:05.670 --> 0:23:07.920 So you could almost be like, oh, we have $65 0:23:07.920 --> 0:23:12.390 million our and there it is. And I, I probably 0:23:12.390 --> 0:23:16.230 shouldn't be so hard if those are the off those 0:23:16.230 --> 0:23:21.150 deposited funds from users are there and not in distributed places. 0:23:21.150 --> 0:23:24.720 That's why a layman would look at that and say, so, 0:23:24.750 --> 0:23:27.989 you know, $65 billion worth of assets, there should be 0:23:27.990 --> 0:23:31.470 $65 billion over here, as long as there's not fractional 0:23:31.470 --> 0:23:34.200 reserve banking going on of some sort and leverage. 0:23:34.740 --> 0:23:36.660 Can I So let me answer to that. Well, we 0:23:36.660 --> 0:23:38.790 have the at the station so people diminish the value 0:23:38.790 --> 0:23:41.070 of the at the station. Yet this station shows exactly 0:23:41.070 --> 0:23:44.100 what we have. Right. The difference between us, the station 0:23:44.100 --> 0:23:46.949 and food audit is that the audit shows also the 0:23:46.950 --> 0:23:50.460 attestation is more punctual, right? We are doing every three months. 0:23:50.700 --> 0:23:52.889 We are trying to make it and we are improving 0:23:52.890 --> 0:23:56.220 our processes to make more, to make it faster so 0:23:56.220 --> 0:24:00.000 that we can read this, release it month. Right? So 0:24:00.359 --> 0:24:03.060 we started from three months and it was taking 45 0:24:03.060 --> 0:24:07.020 to 50 days to do the attestation and to collect 0:24:07.020 --> 0:24:09.389 all the information and provide the information to the auditors 0:24:09.390 --> 0:24:12.270 and do the attestation. Now we are going below the 0:24:12.270 --> 0:24:14.970 30 days so that we can release this monthly. So 0:24:14.970 --> 0:24:17.550 it's not like we don't have anything. We have exactly 0:24:17.550 --> 0:24:20.460 what the other stablecoins have. And also we if you 0:24:20.460 --> 0:24:23.760 look at the length and the details of our attestation 0:24:23.760 --> 0:24:26.760 is much is far higher than the others. Also, we 0:24:26.760 --> 0:24:29.040 did the very same thing with Bitfinex. With the next 0:24:29.040 --> 0:24:32.640 we release the proof of reserve. So we showed, we 0:24:32.640 --> 0:24:36.389 displayed and we provide all the hot and cold wallet 0:24:36.390 --> 0:24:41.550 addresses of bitfinex. And also we have developed ourself a 0:24:41.550 --> 0:24:45.149 tool I developed with a couple of guys myself, a 0:24:45.150 --> 0:24:49.170 tool called Anthony, that also does proof of liabilities with 0:24:49.170 --> 0:24:53.640 a merkle, with a Merkle tree, and we'd bring signature 0:24:53.640 --> 0:24:57.810 type style of, of, of accounting so that people with 0:24:57.810 --> 0:25:01.740 privacy can verify that what we claimed it should have 0:25:01.740 --> 0:25:05.129 in the in the in the assets is effectively on bitfinex. 0:25:05.670 --> 0:25:09.179 So I agree that the transparency of this industry should 0:25:09.180 --> 0:25:13.080