WEBVTT - Michel Lee on Crypto (Radio)

0:00:00.040 --> 0:00:03.280
<v Speaker 1>We're joined now by Michael Lee, executive president at hash

0:00:03.360 --> 0:00:07.200
<v Speaker 1>Key Group, to discuss the latest in crypto and a

0:00:07.280 --> 0:00:11.680
<v Speaker 1>very big day in the life of cryptocurrencies. And Michael,

0:00:11.720 --> 0:00:13.480
<v Speaker 1>I just want to start off by getting your view

0:00:14.080 --> 0:00:17.400
<v Speaker 1>on what's been going on with finance and f t

0:00:17.680 --> 0:00:20.160
<v Speaker 1>X and give us a sense of the significance of

0:00:20.239 --> 0:00:24.239
<v Speaker 1>this moment, particularly in terms of your own business. Hi,

0:00:24.720 --> 0:00:27.920
<v Speaker 1>nice to meet you. UM Hashi Group. We are a

0:00:28.000 --> 0:00:33.159
<v Speaker 1>Asia base UH blockchain and crypto company where one of

0:00:33.159 --> 0:00:35.640
<v Speaker 1>the earliest and largest investor in the in the in

0:00:35.680 --> 0:00:38.280
<v Speaker 1>the space has been active since two thousand and fifteen.

0:00:38.640 --> 0:00:41.240
<v Speaker 1>I think a longer term vision has always been is

0:00:41.960 --> 0:00:46.879
<v Speaker 1>a is a very innovative, new new technology that that

0:00:46.920 --> 0:00:50.200
<v Speaker 1>can really check up how financial services and how commerce

0:00:50.560 --> 0:00:54.640
<v Speaker 1>in general h will be conducted in the future. So

0:00:54.840 --> 0:00:58.720
<v Speaker 1>we continue to be superb sort of I think optimistic

0:00:58.840 --> 0:01:02.000
<v Speaker 1>on the technology. It's health but as we all know,

0:01:02.240 --> 0:01:05.600
<v Speaker 1>right um, and and you look back at history, you

0:01:05.680 --> 0:01:08.120
<v Speaker 1>continue to have I think you're four in the market

0:01:08.240 --> 0:01:11.560
<v Speaker 1>and then potential bursts of bubbles, and I think it's

0:01:11.600 --> 0:01:14.800
<v Speaker 1>just part of the learning process of the market. UM.

0:01:15.680 --> 0:01:19.520
<v Speaker 1>It's obviously it's quite sad, upsetting, UH and and especially

0:01:19.520 --> 0:01:23.880
<v Speaker 1>for those involved, I feel quite quite uh, I stand

0:01:23.880 --> 0:01:27.320
<v Speaker 1>with them. But I think as the ecosystem though, the

0:01:27.319 --> 0:01:30.520
<v Speaker 1>the the everyone is really learning from some of the

0:01:30.680 --> 0:01:33.560
<v Speaker 1>lessons right that that we would probably come out from

0:01:33.560 --> 0:01:37.440
<v Speaker 1>the fallout. The way we look at the this whole

0:01:37.480 --> 0:01:42.880
<v Speaker 1>space UM is that ultimately, if you're running an exchange platform,

0:01:43.200 --> 0:01:45.880
<v Speaker 1>you really there a few cardinal rules you have to follow. Right.

0:01:46.160 --> 0:01:49.560
<v Speaker 1>First of all, it's client assets segregation, UM. You can

0:01:49.640 --> 0:01:52.320
<v Speaker 1>never touch it. You shouldn't never touch a client asset

0:01:52.400 --> 0:01:55.400
<v Speaker 1>if you're a custodian UM. And that's the way we

0:01:55.480 --> 0:01:59.800
<v Speaker 1>have run out of business. Uh. Under the the new

0:02:00.040 --> 0:02:03.840
<v Speaker 1>the license regime in Hong Kong, there's a regulator regime

0:02:04.120 --> 0:02:07.720
<v Speaker 1>that that's set up by regulators here. So we're required

0:02:07.760 --> 0:02:10.519
<v Speaker 1>to ensure your asset us safe and we we will,

0:02:10.720 --> 0:02:12.880
<v Speaker 1>and we shouldn't be using client asset for for for

0:02:12.960 --> 0:02:16.600
<v Speaker 1>running leverage positions. Well, as you know, Michael, there is

0:02:16.639 --> 0:02:20.200
<v Speaker 1>a certain part of this space that is pretty much

0:02:20.200 --> 0:02:23.040
<v Speaker 1>functioning as though it's the wild West, so to speak.

0:02:23.120 --> 0:02:26.480
<v Speaker 1>There's very little in in the way of regulation. And

0:02:26.520 --> 0:02:28.880
<v Speaker 1>I was struck by a note today from the Strategy

0:02:28.919 --> 0:02:32.519
<v Speaker 1>just over JP Morgan Chase talking about the fact that

0:02:32.600 --> 0:02:37.480
<v Speaker 1>crypto markets will be facing weeks of deleveraging from fallout

0:02:37.520 --> 0:02:40.680
<v Speaker 1>of this crisis. I'm wondering whether or not we're already

0:02:40.720 --> 0:02:43.240
<v Speaker 1>seeing that. And part of the equities sell off that

0:02:43.280 --> 0:02:45.960
<v Speaker 1>we have seen is people raising money in order to

0:02:46.000 --> 0:02:49.000
<v Speaker 1>pay back or to cover these margin calls. Do you

0:02:49.040 --> 0:02:51.000
<v Speaker 1>think that that's likely and talk to me a little

0:02:51.040 --> 0:02:54.480
<v Speaker 1>bit about your belief on using leverage in in in

0:02:54.680 --> 0:03:00.839
<v Speaker 1>the crypto space. I think, um, the this space has

0:03:01.080 --> 0:03:06.840
<v Speaker 1>really developed over the last twelve years also or maybe fourteen,

0:03:06.880 --> 0:03:10.160
<v Speaker 1>depending on how you counted. And I think the people

0:03:10.160 --> 0:03:12.600
<v Speaker 1>who have been in this space have also have seen

0:03:12.680 --> 0:03:15.639
<v Speaker 1>a lot of cycles, and I think there's a lot

0:03:15.639 --> 0:03:18.480
<v Speaker 1>of fear and Greek type cycle. I think what has

0:03:18.760 --> 0:03:22.600
<v Speaker 1>UH and and the the I think technology has reached

0:03:22.600 --> 0:03:26.200
<v Speaker 1>a stage where the transaction per second is very high

0:03:26.280 --> 0:03:29.000
<v Speaker 1>and you now see this whole movement around work three

0:03:29.120 --> 0:03:31.720
<v Speaker 1>where the technology is being used for real life use

0:03:31.760 --> 0:03:34.440
<v Speaker 1>cases UM and I think that has attracted a lot

0:03:34.440 --> 0:03:37.680
<v Speaker 1>of attention, and that's why there's so much attention around

0:03:37.680 --> 0:03:39.600
<v Speaker 1>the space. Every felt that they need to get in

0:03:40.320 --> 0:03:44.760
<v Speaker 1>UM and I think yes, Unfortunately, there's some some probably

0:03:45.080 --> 0:03:48.720
<v Speaker 1>a bit too much speculation, and when the speculation, there's

0:03:48.720 --> 0:03:53.200
<v Speaker 1>always leverage. UM, I would hope. I mean, unfortunately, one

0:03:53.200 --> 0:03:56.760
<v Speaker 1>of the things within this unregulated space is that a

0:03:56.800 --> 0:03:59.960
<v Speaker 1>lot of the data has historically not been that transparent.

0:04:00.000 --> 0:04:02.720
<v Speaker 1>And I think part of issues right now is how

0:04:02.720 --> 0:04:05.880
<v Speaker 1>to ensure that this food transparency on how how things

0:04:05.880 --> 0:04:09.120
<v Speaker 1>are run. And this is quite oxymoronic in a sense

0:04:09.160 --> 0:04:15.160
<v Speaker 1>because blockchain was designed to be precisely exactly exactly, so

0:04:15.200 --> 0:04:18.440
<v Speaker 1>I've been perverted in some set I think by Unfortunately,

0:04:18.520 --> 0:04:21.000
<v Speaker 1>if you are running fast grain business, people just made

0:04:21.839 --> 0:04:25.000
<v Speaker 1>may have made some wrong decisions along the way and

0:04:25.120 --> 0:04:27.520
<v Speaker 1>going forward to really need to relok at this. We

0:04:27.560 --> 0:04:30.840
<v Speaker 1>need to ensure this transparency in the system. And there's

0:04:30.880 --> 0:04:32.440
<v Speaker 1>a lot of good news that's coming out over the

0:04:32.520 --> 0:04:35.400
<v Speaker 1>last twenty four hours right people actually talking about, oh,

0:04:35.400 --> 0:04:37.160
<v Speaker 1>I need to a lot of platforms that are now

0:04:37.200 --> 0:04:40.600
<v Speaker 1>saying I'm gonna disclose my audited numbers. UM, I'm gonna

0:04:40.720 --> 0:04:44.359
<v Speaker 1>use moco trees or a large proof technology to ensure

0:04:44.440 --> 0:04:47.640
<v Speaker 1>that clients can confirm their holdings. I mean, this should

0:04:47.640 --> 0:04:50.760
<v Speaker 1>have in hindsight, it is always in hindsight. Unfortunately, just

0:04:50.760 --> 0:04:53.080
<v Speaker 1>have been done probably a year ago. But I think

0:04:53.080 --> 0:04:55.840
<v Speaker 1>people are so busy trying to win market share and

0:04:55.880 --> 0:04:59.680
<v Speaker 1>really forgot Um. Yeah, so the basics right, Yeah, Well,

0:05:00.240 --> 0:05:03.000
<v Speaker 1>your your company hash keys recently received full license to

0:05:03.080 --> 0:05:06.440
<v Speaker 1>operate virtualizer trading platforms in Hong Kong. So how is

0:05:06.480 --> 0:05:09.800
<v Speaker 1>the regulatory environment different in Hong Kong to the US

0:05:09.880 --> 0:05:13.000
<v Speaker 1>and other markets? And can you see a lot more regulation,

0:05:13.080 --> 0:05:15.880
<v Speaker 1>a lot more requirements for that transparency that you're talking

0:05:15.920 --> 0:05:19.719
<v Speaker 1>about coming down the pipe. Um. I'm not an expert

0:05:19.760 --> 0:05:24.120
<v Speaker 1>on US regulations, but my understanding is all regulators globally,

0:05:24.600 --> 0:05:27.640
<v Speaker 1>improper jurisdictions are looking at this because it's a very

0:05:28.600 --> 0:05:32.320
<v Speaker 1>powerful technology get that can be level leverage and using

0:05:32.440 --> 0:05:34.760
<v Speaker 1>good ways. But I think a lot of the problems

0:05:34.800 --> 0:05:37.600
<v Speaker 1>that we're seeing are on these unregulated platforms that are

0:05:38.240 --> 0:05:40.640
<v Speaker 1>I mean that that are set up in in in

0:05:40.760 --> 0:05:43.880
<v Speaker 1>jurisdiction that that really have real little oversight. And I

0:05:43.920 --> 0:05:47.400
<v Speaker 1>think some of these platforms are definitely very well run um,

0:05:47.480 --> 0:05:51.120
<v Speaker 1>and I think the founders belief in transparency and do

0:05:51.160 --> 0:05:54.400
<v Speaker 1>a very good job in running it. But unfortunately there's

0:05:54.440 --> 0:05:58.240
<v Speaker 1>no standard, there's no established standard in these regular unregulated

0:05:58.320 --> 0:06:01.680
<v Speaker 1>jurisdiction and I think that's where well, Hong Kong. I

0:06:01.720 --> 0:06:04.960
<v Speaker 1>think it's in some sense the regulators really taking a

0:06:05.000 --> 0:06:06.560
<v Speaker 1>bit of a slow boat. I mean there's been a

0:06:06.560 --> 0:06:09.679
<v Speaker 1>lot of criticisms that all other jurisdictions have moved quicker,

0:06:10.040 --> 0:06:11.960
<v Speaker 1>but Hong Kong actually, over the last two years have

0:06:12.120 --> 0:06:16.880
<v Speaker 1>put in a very clear regulations around UM how these

0:06:16.880 --> 0:06:21.120
<v Speaker 1>exchange should be run, internal klient, asset safety, confident interest,

0:06:21.160 --> 0:06:23.560
<v Speaker 1>et cetera. And I think the US definitely doing the

0:06:23.600 --> 0:06:26.680
<v Speaker 1>same thing, right. I mean, Gary Guess obviously one of

0:06:26.720 --> 0:06:30.240
<v Speaker 1>the smartest guy and most knowledgeable in this. I'm looking

0:06:30.279 --> 0:06:33.800
<v Speaker 1>at this, the various regulators really looking at this UM.

0:06:33.800 --> 0:06:37.080
<v Speaker 1>There's a lot of work for the regulators UM and

0:06:37.080 --> 0:06:39.599
<v Speaker 1>and the space just moving so fast. But I would

0:06:39.600 --> 0:06:43.120
<v Speaker 1>imagine people, Yes, there are basic ground rules you have

0:06:43.160 --> 0:06:45.839
<v Speaker 1>to follow right or else accident the bad thing happened,

0:06:46.000 --> 0:06:49.240
<v Speaker 1>or accidents do happen. Michel, very quickly, I'm gonna give

0:06:49.240 --> 0:06:52.599
<v Speaker 1>you ten seconds to give me a target. Give me

0:06:52.640 --> 0:06:55.400
<v Speaker 1>a number that you think is the floor for bitcoin.

0:06:55.560 --> 0:06:59.960
<v Speaker 1>Right now we're trading around sixteen thousand one. Oh, that's

0:07:00.000 --> 0:07:02.359
<v Speaker 1>a very tough question. I mean, this is by no

0:07:02.440 --> 0:07:06.800
<v Speaker 1>means investment advice. I mean, personally, I would take a

0:07:06.920 --> 0:07:10.920
<v Speaker 1>number of round twelve thousand. Very good. That's interesting because

0:07:10.920 --> 0:07:13.840
<v Speaker 1>that JP Morgan note that I referred to earlier as

0:07:13.880 --> 0:07:17.360
<v Speaker 1>looking at a floor of around thirteen grand Mickli, thank

0:07:17.360 --> 0:07:19.960
<v Speaker 1>you so much for being with sa Michael as executive

0:07:19.960 --> 0:07:23.880
<v Speaker 1>president at the hash Key Group, joining us here talking

0:07:24.000 --> 0:07:25.600
<v Speaker 1>about the latest in crypto