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Speaker 1: Joining us to talk more about the business of crypto

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Speaker 1: is Brett Harrison. He is Architect Financial Technologies founder and CEO,

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Speaker 1: and of course he's a former president of FTX. Before

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Speaker 1: we get to anything involving the latter, Brett, I want

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Speaker 1: to talk about Architect because I've noticed in your press

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Speaker 1: release from April that you guys are already talking about

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Speaker 1: GPT four and using AI and crypto before we had

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Speaker 1: the big blow up in prices. How would you integrate chat,

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Speaker 1: GPT or GPT four into or how do you integrate

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Speaker 1: it into your product?

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Speaker 2: So part of the goal of Architect is to give

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Speaker 2: institutional gray technology, not just to trading institutions like hedge funds,

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Speaker 2: trading firms, asset managers, but also to sophisticated individual investors.

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Speaker 2: And one of the things that digital assets has allowed

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Speaker 2: for individual investors to be able to do is to

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Speaker 2: be able to access programmatically exchanges a lot more easily. Well,

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Speaker 2: part of that comes with the ability to write sophisticated

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Speaker 2: strategy g strategies that can do market making, that can

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Speaker 2: do arbitrage between exchanges, and we think that we can

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Speaker 2: greatly lower the barrier to entry to writing those kinds

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Speaker 2: of strategies by using natural language prompts, for example, be

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Speaker 2: able to it's arbitrage the price of this quid between

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Speaker 2: these two exchanges, and have GPT be able to actually

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Speaker 2: create code for you on the fly using our internal

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Speaker 2: APIs and make it just much easier to be able

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Speaker 2: to be a sophisticated trader in these markets.

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Speaker 1: So, even if AI is a killer app for your

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Speaker 1: exchange for your business, you've still got to get customers

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Speaker 1: to come and use it. Has has has your business

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Speaker 1: been tainted at all by your involvement in FTX? I

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Speaker 1: mean when you talk to new customers, do they say, hey,

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Speaker 1: we got to deal with this question and get it

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Speaker 1: out of the way first.

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Speaker 2: No, I mean long since you know talking about FTX. Really?

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Speaker 2: I mean, first of all, I look at the you know,

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Speaker 2: the composition of our team. We have people from x

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Speaker 2: chain Street, from DTCC, from RBC. We put together a

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Speaker 2: really stellar group of people who have this long experience

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Speaker 2: in the financial services sector. Secondly, you know, we are

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Speaker 2: a pure software business. We're not taking customer funds, We're

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Speaker 2: not executing trains on our customer's behalf. We take a

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Speaker 2: security first approach to building software that works in a

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Speaker 2: self hosted fashion on people's own hardware, so you can

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Speaker 2: get direct access to exchanges, not just digital asset exchanges,

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Speaker 2: but also to regulated derivatives exchanges like the CME, And

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Speaker 2: so we're trying to take a pan asset approach using

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Speaker 2: all of the sort of skills and know how that

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Speaker 2: we've developed over our combined decades of experience in this industry.

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Speaker 3: On the subject of exchanges, Brett and it's Kaylee in Washington.

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Speaker 3: Obviously one of them. Coinbase has now been sued by

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Speaker 3: the SEC, and I'm wondering how that lawsuit or the

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Speaker 3: one against Binance may ultimately affect your business.

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Speaker 2: So right now, because of all of the regulatory uncertainty,

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Speaker 2: we're seeing a real turning point for exchanges, a bifurcation

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Speaker 2: of liquidity into what I'm going to see call as

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Speaker 2: like the heavily regulated space like derivatives under the CFTC

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Speaker 2: at the CME Bitcoin eat their futures and options, as

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Speaker 2: well as the very unregulated space of non US exchanges

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Speaker 2: that combine spot and crypto into one sort of vertical

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Speaker 2: clearing model. And both of these are going to continue

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Speaker 2: to develop and grow over the next coming years. I

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Speaker 2: think it's interesting seeing what's happened with the SEC and coinbase.

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Speaker 2: I think if the goal is to create regulatory clarity,

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Speaker 2: this is certainly going to be a long expensive path,

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Speaker 2: both in terms of time and money to go through

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Speaker 2: the litigation. I think with all the pushback from the

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Speaker 2: industry trying to get clarity, trying to make it possible

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Speaker 2: for SEC registrants to be able to operate within the rules,

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Speaker 2: to be able to list and to execute and custodian

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Speaker 2: different digital assets, I think hopefully we will see a

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Speaker 2: more incremental approach from the SEC and the CFTC over

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Speaker 2: the coming years, so we don't have to wait just

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Speaker 2: for litigation to be able to get that clarity.

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Speaker 3: In the meantime, though, how optimistic are you on the

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Speaker 3: outlook for crypto in the US specifically or do you

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Speaker 3: also find yourself needing to look abroad.

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Speaker 2: We are looking globally, I mean, we see firms that

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Speaker 2: are participating in the institutional trading of crypto in the

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Speaker 2: US and of course in places in Asia and in Europe.

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Speaker 2: In the US there are still very high institutional confidence

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Speaker 2: that this is an asset to trade that's going to

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Speaker 2: continue to grow. Obviously, we saw you know edX launch today.

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Speaker 2: There's going to be different approaches to the trading of crypto.

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Speaker 2: There's Sebo Digital, there's Nasdaq entering the game with custody

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Speaker 2: and possibly eventually in exchange as well. So there's going

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Speaker 2: to be the sort of traditional approach to crypto where

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Speaker 2: you have separate matching and clearing in US or separated

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Speaker 2: clearing verse settlement model, and then you're going to see

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Speaker 2: you know, exchanges like coinbase continue to exist and fight

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Speaker 2: and grow in the more integrated approach where people can

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Speaker 2: combine trading with more of the utility aspects of digital assets,

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Speaker 2: such as staking and lending and different things like that.

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Speaker 1: Speaking of custody, I noticed edX is launching, which is

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Speaker 1: an exchange backed by Citadel Fidelity and Schwab, and they

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Speaker 1: are a non custodial exchange, so they just facilitate the transfer,

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Speaker 1: but they don't ever hold the asset. Do you think

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Speaker 1: that's going to be a leading way forward?

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Speaker 2: I do, And in a couple of different ways. There's

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Speaker 2: this sort of traditional model where you have a separate

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Speaker 2: clearing entity that's facilitating the final clearing and the movements

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Speaker 2: of money and funds between different customers. There's also a

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Speaker 2: number of startup exchanges that are coming to the for

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Speaker 2: now that are combining off chain matching similar to the

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Speaker 2: way that edX is doing, the way that NASDAC would do,

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Speaker 2: but on chain settlement and clearing, where they're combining kind

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Speaker 2: of the best of the centralized and decentralized exchange world.

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Speaker 2: And I think you're going to see those kinds of

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Speaker 2: models up here as well to compete with the more

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Speaker 2: traditional models the way that edX or a traditional exchange

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Speaker 2: like NASIK or CM might offer.

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Speaker 1: Do you shift your business maybe more towards taking a

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Speaker 1: crypto perspective on a trad fi business model? I mean,

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Speaker 1: can't you use the blockchain to help old banks trade

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Speaker 1: assets in a faster and more efficient way.

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Speaker 3: Yeah.

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Speaker 2: So, our view at architect is that we're preparing for

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Speaker 2: a world in which the lines between additional and digital

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Speaker 2: assets continue to blur. Whether that's banks that are using

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Speaker 2: private blockchains to settle tens of not one, hundreds of

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Speaker 2: millions of dollars of repose every day, to digital assets

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Speaker 2: being able to wrap real world assets, or to token

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Speaker 2: I securities. We want to make sure that customers can

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Speaker 2: trade seamlessly to every kind of exchange model from the

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Speaker 2: most traditional to the most decentralized, all from one single

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Speaker 2: interface and order management system. And so that's exactly why

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Speaker 2: we started this company in the first place.

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Speaker 3: And Brett, final question, as you pursue that vision or

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Speaker 3: more fundraising plans in your future.

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Speaker 2: Absolutely, you know, we've raised a really great roundback in

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Speaker 2: January from some of our wonderful investors like Coinbase and Circle,

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Speaker 2: sv Angel, Motivate and AsSalt Funds. But we're all of

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Speaker 2: course going to consider opportunities in the future, especially as

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Speaker 2: we look to build out regulated entities underneath the Architect umbrella,

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Speaker 2: whether those are under the CSDC or the SEC are both,

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Speaker 2: We're going to look to probably expand our investor set

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Speaker 2: and raise funds in the future.

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Speaker 1: All right, Brett, thanks so much for coming and really

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Speaker 1: appreciate your time. Brett Harrison. They're from Architect Financial Technologies.