Speaker 1: We're joined now by Michael Lee, executive president at hash
Speaker 1: Key Group, to discuss the latest in crypto and a
Speaker 1: very big day in the life of cryptocurrencies. And Michael,
Speaker 1: I just want to start off by getting your view
Speaker 1: on what's been going on with finance and f t
Speaker 1: X and give us a sense of the significance of
Speaker 1: this moment, particularly in terms of your own business. Hi,
Speaker 1: nice to meet you. UM Hashi Group. We are a
Speaker 1: Asia base UH blockchain and crypto company where one of
Speaker 1: the earliest and largest investor in the in the in
Speaker 1: the space has been active since two thousand and fifteen.
Speaker 1: I think a longer term vision has always been is
Speaker 1: a is a very innovative, new new technology that that
Speaker 1: can really check up how financial services and how commerce
Speaker 1: in general h will be conducted in the future. So
Speaker 1: we continue to be superb sort of I think optimistic
Speaker 1: on the technology. It's health but as we all know,
Speaker 1: right um, and and you look back at history, you
Speaker 1: continue to have I think you're four in the market
Speaker 1: and then potential bursts of bubbles, and I think it's
Speaker 1: just part of the learning process of the market. UM.
Speaker 1: It's obviously it's quite sad, upsetting, UH and and especially
Speaker 1: for those involved, I feel quite quite uh, I stand
Speaker 1: with them. But I think as the ecosystem though, the
Speaker 1: the the everyone is really learning from some of the
Speaker 1: lessons right that that we would probably come out from
Speaker 1: the fallout. The way we look at the this whole
Speaker 1: space UM is that ultimately, if you're running an exchange platform,
Speaker 1: you really there a few cardinal rules you have to follow. Right.
Speaker 1: First of all, it's client assets segregation, UM. You can
Speaker 1: never touch it. You shouldn't never touch a client asset
Speaker 1: if you're a custodian UM. And that's the way we
Speaker 1: have run out of business. Uh. Under the the new
Speaker 1: the license regime in Hong Kong, there's a regulator regime
Speaker 1: that that's set up by regulators here. So we're required
Speaker 1: to ensure your asset us safe and we we will,
Speaker 1: and we shouldn't be using client asset for for for
Speaker 1: running leverage positions. Well, as you know, Michael, there is
Speaker 1: a certain part of this space that is pretty much
Speaker 1: functioning as though it's the wild West, so to speak.
Speaker 1: There's very little in in the way of regulation. And
Speaker 1: I was struck by a note today from the Strategy
Speaker 1: just over JP Morgan Chase talking about the fact that
Speaker 1: crypto markets will be facing weeks of deleveraging from fallout
Speaker 1: of this crisis. I'm wondering whether or not we're already
Speaker 1: seeing that. And part of the equities sell off that
Speaker 1: we have seen is people raising money in order to
Speaker 1: pay back or to cover these margin calls. Do you
Speaker 1: think that that's likely and talk to me a little
Speaker 1: bit about your belief on using leverage in in in
Speaker 1: the crypto space. I think, um, the this space has
Speaker 1: really developed over the last twelve years also or maybe fourteen,
Speaker 1: depending on how you counted. And I think the people
Speaker 1: who have been in this space have also have seen
Speaker 1: a lot of cycles, and I think there's a lot
Speaker 1: of fear and Greek type cycle. I think what has
Speaker 1: UH and and the the I think technology has reached
Speaker 1: a stage where the transaction per second is very high
Speaker 1: and you now see this whole movement around work three
Speaker 1: where the technology is being used for real life use
Speaker 1: cases UM and I think that has attracted a lot
Speaker 1: of attention, and that's why there's so much attention around
Speaker 1: the space. Every felt that they need to get in
Speaker 1: UM and I think yes, Unfortunately, there's some some probably
Speaker 1: a bit too much speculation, and when the speculation, there's
Speaker 1: always leverage. UM, I would hope. I mean, unfortunately, one
Speaker 1: of the things within this unregulated space is that a
Speaker 1: lot of the data has historically not been that transparent.
Speaker 1: And I think part of issues right now is how
Speaker 1: to ensure that this food transparency on how how things
Speaker 1: are run. And this is quite oxymoronic in a sense
Speaker 1: because blockchain was designed to be precisely exactly exactly, so
Speaker 1: I've been perverted in some set I think by Unfortunately,
Speaker 1: if you are running fast grain business, people just made
Speaker 1: may have made some wrong decisions along the way and
Speaker 1: going forward to really need to relok at this. We
Speaker 1: need to ensure this transparency in the system. And there's
Speaker 1: a lot of good news that's coming out over the
Speaker 1: last twenty four hours right people actually talking about, oh,
Speaker 1: I need to a lot of platforms that are now
Speaker 1: saying I'm gonna disclose my audited numbers. UM, I'm gonna
Speaker 1: use moco trees or a large proof technology to ensure
Speaker 1: that clients can confirm their holdings. I mean, this should
Speaker 1: have in hindsight, it is always in hindsight. Unfortunately, just
Speaker 1: have been done probably a year ago. But I think
Speaker 1: people are so busy trying to win market share and
Speaker 1: really forgot Um. Yeah, so the basics right, Yeah, Well,
Speaker 1: your your company hash keys recently received full license to
Speaker 1: operate virtualizer trading platforms in Hong Kong. So how is
Speaker 1: the regulatory environment different in Hong Kong to the US
Speaker 1: and other markets? And can you see a lot more regulation,
Speaker 1: a lot more requirements for that transparency that you're talking
Speaker 1: about coming down the pipe. Um. I'm not an expert
Speaker 1: on US regulations, but my understanding is all regulators globally,
Speaker 1: improper jurisdictions are looking at this because it's a very
Speaker 1: powerful technology get that can be level leverage and using
Speaker 1: good ways. But I think a lot of the problems
Speaker 1: that we're seeing are on these unregulated platforms that are
Speaker 1: I mean that that are set up in in in
Speaker 1: jurisdiction that that really have real little oversight. And I
Speaker 1: think some of these platforms are definitely very well run um,
Speaker 1: and I think the founders belief in transparency and do
Speaker 1: a very good job in running it. But unfortunately there's
Speaker 1: no standard, there's no established standard in these regular unregulated
Speaker 1: jurisdiction and I think that's where well, Hong Kong. I
Speaker 1: think it's in some sense the regulators really taking a
Speaker 1: bit of a slow boat. I mean there's been a
Speaker 1: lot of criticisms that all other jurisdictions have moved quicker,
Speaker 1: but Hong Kong actually, over the last two years have
Speaker 1: put in a very clear regulations around UM how these
Speaker 1: exchange should be run, internal klient, asset safety, confident interest,
Speaker 1: et cetera. And I think the US definitely doing the
Speaker 1: same thing, right. I mean, Gary Guess obviously one of
Speaker 1: the smartest guy and most knowledgeable in this. I'm looking
Speaker 1: at this, the various regulators really looking at this UM.
Speaker 1: There's a lot of work for the regulators UM and
Speaker 1: and the space just moving so fast. But I would
Speaker 1: imagine people, Yes, there are basic ground rules you have
Speaker 1: to follow right or else accident the bad thing happened,
Speaker 1: or accidents do happen. Michel, very quickly, I'm gonna give
Speaker 1: you ten seconds to give me a target. Give me
Speaker 1: a number that you think is the floor for bitcoin.
Speaker 1: Right now we're trading around sixteen thousand one. Oh, that's
Speaker 1: a very tough question. I mean, this is by no
Speaker 1: means investment advice. I mean, personally, I would take a
Speaker 1: number of round twelve thousand. Very good. That's interesting because
Speaker 1: that JP Morgan note that I referred to earlier as
Speaker 1: looking at a floor of around thirteen grand Mickli, thank
Speaker 1: you so much for being with sa Michael as executive
Speaker 1: president at the hash Key Group, joining us here talking
Speaker 1: about the latest in crypto