1
00:00:00,480 --> 00:00:04,280
Speaker 1: Shortly before Christmas, Sam Bankman Fried, the disgraced founder of

2
00:00:04,360 --> 00:00:07,920
Speaker 1: f t X and Alameda Research, was arrested by authorities

3
00:00:07,960 --> 00:00:10,680
Speaker 1: in the Bahamas. After spending a few days in the

4
00:00:10,720 --> 00:00:14,480
Speaker 1: notorious Fox Hill prison there, he was extradited to the

5
00:00:14,560 --> 00:00:17,400
Speaker 1: United States and promptly bailed on a two hundred and

6
00:00:17,400 --> 00:00:20,880
Speaker 1: fifty million dollar bond. He's now at his parents house

7
00:00:20,920 --> 00:00:24,919
Speaker 1: in California awaiting trial. The saga of f t X

8
00:00:24,960 --> 00:00:28,760
Speaker 1: and Alameda drags on surely. Before sp f's arrest, I

9
00:00:28,840 --> 00:00:32,360
Speaker 1: sat down with Ram Alaualia, an expert on both digital

10
00:00:32,360 --> 00:00:36,000
Speaker 1: assets and the world of traditional finance, to discuss the

11
00:00:36,080 --> 00:00:39,440
Speaker 1: situation as it was then and try to understand how

12
00:00:39,479 --> 00:00:42,640
Speaker 1: it ever managed to get so far. Ram had recently

13
00:00:42,680 --> 00:00:47,040
Speaker 1: published some intriguing threads on Twitter outlining his unique perspective

14
00:00:47,080 --> 00:00:50,440
Speaker 1: on what happened, and I wanted him to elaborate on them.

15
00:00:51,000 --> 00:00:53,680
Speaker 1: There have been a fair few developments since we had

16
00:00:53,680 --> 00:00:56,960
Speaker 1: our conversation, but the vast majority of what we discussed

17
00:00:57,080 --> 00:01:00,240
Speaker 1: is still relevant. Ram argues that the seeds of this

18
00:01:00,360 --> 00:01:03,640
Speaker 1: crisis was sown further back than many believe, and that

19
00:01:03,920 --> 00:01:07,319
Speaker 1: SPF and some of his close colleagues perpetrated a fraud

20
00:01:07,400 --> 00:01:10,520
Speaker 1: bigger even than that of Bernie made Off. He also

21
00:01:10,600 --> 00:01:13,360
Speaker 1: explains some of the ins and outs of high finance,

22
00:01:13,480 --> 00:01:16,240
Speaker 1: helping shed light on some of the more complex aspects

23
00:01:16,520 --> 00:01:19,880
Speaker 1: of what ft X and Alameda were involved in. This

24
00:01:20,040 --> 00:01:23,000
Speaker 1: was a fascinating discussion to have, and Ram's expertise on

25
00:01:23,040 --> 00:01:25,960
Speaker 1: the matter is second to none. He's well worth following

26
00:01:25,959 --> 00:01:28,400
Speaker 1: on Twitter, and I'll leave links to his page and

27
00:01:28,520 --> 00:01:32,320
Speaker 1: other useful resources about him in the description of this episode.

28
00:01:32,880 --> 00:01:56,000
Speaker 1: Enjoy the show. Hello everyone, We're very lucky today to

29
00:01:56,080 --> 00:01:59,720
Speaker 1: be joined by a special guest, Ram Aluwalia. Ram has

30
00:02:00,440 --> 00:02:05,200
Speaker 1: an extraordinary CV. Really, He's worked in finance for over

31
00:02:05,240 --> 00:02:08,800
Speaker 1: twenty years. He held senior positions at the likes of

32
00:02:08,880 --> 00:02:12,800
Speaker 1: Merrill Lynch and Bank of America, and then went on

33
00:02:12,840 --> 00:02:14,920
Speaker 1: to be head of crypto and Digital Assets at Cross

34
00:02:15,040 --> 00:02:17,840
Speaker 1: River UM and is now the co founder and CEO

35
00:02:18,120 --> 00:02:21,600
Speaker 1: of Lumid, a wealth and that's a private investment company

36
00:02:21,960 --> 00:02:25,799
Speaker 1: that specializes in digital assets. Ram, thank you so much

37
00:02:25,800 --> 00:02:28,399
Speaker 1: for joining us today. I really appreciated Thanks for happy,

38
00:02:28,440 --> 00:02:30,960
Speaker 1: happy to be here. It's great to have you and Rum.

39
00:02:31,040 --> 00:02:33,440
Speaker 1: The reason I wanted to talk to you today was

40
00:02:33,560 --> 00:02:37,400
Speaker 1: because obviously this CV of yours. You have perhaps better

41
00:02:37,480 --> 00:02:40,320
Speaker 1: insight than anyone else into into, I guess, the kind

42
00:02:40,320 --> 00:02:43,840
Speaker 1: of mysteries of high finance. You know, the inner workings

43
00:02:43,960 --> 00:02:47,480
Speaker 1: of the of the financial system, and of course, because

44
00:02:47,560 --> 00:02:50,960
Speaker 1: you specialize in digital assets, how they sort of interlink

45
00:02:51,480 --> 00:02:55,920
Speaker 1: with the world of crypto. So inspiration to do this

46
00:02:56,040 --> 00:02:59,440
Speaker 1: came from a brilliant tweet thread that you put out

47
00:02:59,560 --> 00:03:03,720
Speaker 1: a few days ago talking about the collapse of f

48
00:03:03,880 --> 00:03:07,000
Speaker 1: t X and Alameda, And I'm just going to if

49
00:03:07,000 --> 00:03:08,760
Speaker 1: you don't mind, Ram, I'm just going to read that

50
00:03:08,760 --> 00:03:11,480
Speaker 1: that first bit out so as to give people a

51
00:03:11,560 --> 00:03:15,200
Speaker 1: kind of hypothesis. So it starts off, how do we

52
00:03:15,280 --> 00:03:18,320
Speaker 1: explain f t X is ten billion dollars in losses?

53
00:03:18,480 --> 00:03:22,360
Speaker 1: Where did the two billion in venture funds go? My

54
00:03:22,480 --> 00:03:25,160
Speaker 1: working hypothesis is that f t X was a fraud

55
00:03:25,320 --> 00:03:28,959
Speaker 1: even prior to recent events, and as far back as

56
00:03:29,919 --> 00:03:33,360
Speaker 1: one SPF will go down in history as a fraud

57
00:03:33,600 --> 00:03:41,160
Speaker 1: larger than Bernie made off. Wow. So what we'll do,

58
00:03:41,280 --> 00:03:43,880
Speaker 1: ram Is is is you know, we'll we'll go through

59
00:03:44,040 --> 00:03:46,280
Speaker 1: some of the things you you talk about in that threat.

60
00:03:46,320 --> 00:03:48,560
Speaker 1: But before we do that, can you just give us

61
00:03:49,080 --> 00:03:51,480
Speaker 1: where you've been working the last few years and and

62
00:03:51,560 --> 00:03:55,440
Speaker 1: kind of your experience with crypto in particular absolutely interesting.

63
00:03:55,520 --> 00:03:58,119
Speaker 1: Thank you for the kine instruction. Originally, wife's here to

64
00:03:58,320 --> 00:04:00,640
Speaker 1: hear that you know like an As you mentioned, my

65
00:04:00,680 --> 00:04:04,960
Speaker 1: background has been high financed twenty years two buckets of

66
00:04:04,960 --> 00:04:07,520
Speaker 1: banking in capital markets, within capital markets, and it's in

67
00:04:07,560 --> 00:04:12,520
Speaker 1: management around was actually active in statistical arbitrage and investing

68
00:04:12,640 --> 00:04:17,840
Speaker 1: high frequency trading strategies the most prior to toluminated. To

69
00:04:17,920 --> 00:04:20,200
Speaker 1: come back to the second, I was executive responsible for

70
00:04:20,240 --> 00:04:23,800
Speaker 1: building that crypto isn't that Carol Server from Service A

71
00:04:23,880 --> 00:04:28,279
Speaker 1: B two B to see Digital Infrastructure Bank. We raise

72
00:04:28,400 --> 00:04:31,120
Speaker 1: money from Andrew support Woods as recently as this April

73
00:04:31,240 --> 00:04:35,200
Speaker 1: around the crypto strategy, as well as other investors including Rivet,

74
00:04:35,240 --> 00:04:38,880
Speaker 1: which you may know as well. It's pre imper company.

75
00:04:39,320 --> 00:04:42,919
Speaker 1: It's a it's a world class business, highly profitable, f

76
00:04:43,080 --> 00:04:47,360
Speaker 1: d I C bank and ours, crypto companies and other

77
00:04:47,400 --> 00:04:51,599
Speaker 1: fintech so SILAR customers include coin Base. If you wire

78
00:04:51,880 --> 00:04:55,120
Speaker 1: or send money into coin Base, that jump up screen

79
00:04:55,200 --> 00:04:57,760
Speaker 1: will say from the server bank. So again we're behind

80
00:04:57,800 --> 00:05:00,920
Speaker 1: the scenes. We helped move money, We helped fin techs

81
00:05:00,960 --> 00:05:05,080
Speaker 1: and crypto companies issue loans and so on and so forth.

82
00:05:05,080 --> 00:05:09,719
Speaker 1: I've in crypto native for quite a while since the era.

83
00:05:10,520 --> 00:05:12,520
Speaker 1: My wife's been in crypto, my sisters in crypto, my

84
00:05:12,520 --> 00:05:16,200
Speaker 1: whole families in crypto, and so there's a tremendous opportunity.

85
00:05:16,200 --> 00:05:19,839
Speaker 1: After a cross river required my prior startup Pure at

86
00:05:19,920 --> 00:05:24,800
Speaker 1: q to to build a crypto business from scratch. UH

87
00:05:25,800 --> 00:05:31,760
Speaker 1: presently lead Lumita, where a digital wealth advisory firm, and

88
00:05:31,920 --> 00:05:35,200
Speaker 1: I recognized along with my co founders, that there is

89
00:05:35,240 --> 00:05:41,359
Speaker 1: an incredible opportunity really to create insight around crypto and

90
00:05:41,480 --> 00:05:45,719
Speaker 1: apply a traditional finance perspective and approach from the CFA

91
00:05:45,800 --> 00:05:49,480
Speaker 1: charter holder by co founders from Cambridge Associates. He's also

92
00:05:49,560 --> 00:05:53,520
Speaker 1: see a FA charterer holder and UH we have another

93
00:05:53,560 --> 00:05:57,560
Speaker 1: pin from from Gold and Sacks, Mary Lynch et CENTA.

94
00:05:57,880 --> 00:06:00,880
Speaker 1: We believe in the promise and potential of crypto, but

95
00:06:00,960 --> 00:06:04,360
Speaker 1: we think there's an opportunity to develover inside, deliver service

96
00:06:04,480 --> 00:06:09,360
Speaker 1: and deliver access to opportunities to invest in crypto responsibly.

97
00:06:10,920 --> 00:06:13,240
Speaker 1: And I guess, I guess around that makes you, you know,

98
00:06:13,360 --> 00:06:16,719
Speaker 1: part of this part of this vanguard of of trad

99
00:06:16,800 --> 00:06:19,760
Speaker 1: five people who have discovered crypto in the last few

100
00:06:19,839 --> 00:06:24,640
Speaker 1: years and really, I guess helped the crypto market mature

101
00:06:24,800 --> 00:06:27,960
Speaker 1: an awful lot in that time. I mean, obviously, crypto

102
00:06:28,000 --> 00:06:30,960
Speaker 1: has only been around for you know, since since two

103
00:06:31,000 --> 00:06:33,760
Speaker 1: thousand and eight, so there's got a lot of development

104
00:06:33,760 --> 00:06:36,640
Speaker 1: to do. But it really seems in the past, the

105
00:06:36,680 --> 00:06:40,360
Speaker 1: past few years that the market has matured enormously, and

106
00:06:40,400 --> 00:06:43,640
Speaker 1: that that seems to be because you know, people like

107
00:06:43,760 --> 00:06:46,960
Speaker 1: yourself in the trad five space have have seen the

108
00:06:47,000 --> 00:06:50,640
Speaker 1: potential of it and have started to started to explore,

109
00:06:50,800 --> 00:06:55,440
Speaker 1: started to develop new products, new services. And this in

110
00:06:55,480 --> 00:06:59,320
Speaker 1: a way, I think kind of leads into what happened

111
00:07:00,120 --> 00:07:03,880
Speaker 1: with f t X and Alameda absolutely not as well said,

112
00:07:04,320 --> 00:07:07,800
Speaker 1: crypto is an alternative capital market offers new payment rails.

113
00:07:08,240 --> 00:07:11,280
Speaker 1: These are services banks and Wall Street has done for

114
00:07:11,320 --> 00:07:13,480
Speaker 1: a long times. Its attracting a lot of people form

115
00:07:13,920 --> 00:07:17,040
Speaker 1: social fiance that see an opportunity for for crypto to

116
00:07:17,600 --> 00:07:20,480
Speaker 1: the world we live in before we dig into you know,

117
00:07:20,680 --> 00:07:24,240
Speaker 1: into your hypothesis rum and and you know, kind of

118
00:07:24,480 --> 00:07:26,760
Speaker 1: flesh out the flesh out the details of it more.

119
00:07:27,760 --> 00:07:30,080
Speaker 1: I think it would help if we, if you know,

120
00:07:30,120 --> 00:07:32,720
Speaker 1: for people watching or listening just to kind of go

121
00:07:32,840 --> 00:07:37,680
Speaker 1: through a very simplified overview of what happened with f

122
00:07:37,840 --> 00:07:41,120
Speaker 1: t X and Alameda, and maybe as we go through

123
00:07:41,280 --> 00:07:43,880
Speaker 1: you could you could maybe pick up on some of

124
00:07:43,920 --> 00:07:46,840
Speaker 1: the maybe you know, any of the errors there and

125
00:07:46,880 --> 00:07:49,600
Speaker 1: also maybe explain some of the terms, because again, I

126
00:07:49,600 --> 00:07:52,680
Speaker 1: think a lot of people have have felt that there's

127
00:07:52,920 --> 00:07:55,480
Speaker 1: you know, this thing gets more and more complicated with

128
00:07:55,560 --> 00:07:58,560
Speaker 1: each passing day. So if you're a right to contribute

129
00:07:58,600 --> 00:08:03,080
Speaker 1: as you you know, as as we go along, yeah, sure, yeah.

130
00:08:03,080 --> 00:08:05,680
Speaker 1: I'll summarize at the high level. And there are many

131
00:08:05,800 --> 00:08:08,480
Speaker 1: layers to this, so I'll start at the simplest level.

132
00:08:09,360 --> 00:08:12,960
Speaker 1: So f t X International or FTX Global, it's an

133
00:08:12,960 --> 00:08:17,720
Speaker 1: exchange exchange registrom the Bahamas. How do they make money, Well,

134
00:08:17,880 --> 00:08:21,520
Speaker 1: they enable their clients to buy and sell crypto and

135
00:08:21,560 --> 00:08:24,680
Speaker 1: then they charge transaction fees. F t X as a

136
00:08:24,760 --> 00:08:28,840
Speaker 1: sister company that's also controlled by sam Bank and Freed

137
00:08:28,920 --> 00:08:34,240
Speaker 1: called Alameda. And Alameda and f t X are inextricably linked.

138
00:08:34,280 --> 00:08:37,040
Speaker 1: They're attached the HIT. The reason for that is because

139
00:08:37,120 --> 00:08:39,520
Speaker 1: an exchange needs a market maker, right, So if I

140
00:08:39,559 --> 00:08:42,320
Speaker 1: have an exchange and you have a deposit, I gotta

141
00:08:42,360 --> 00:08:45,480
Speaker 1: make sure that's one for one back at the exchange.

142
00:08:46,360 --> 00:08:50,160
Speaker 1: So let's say a guy, you want to buy a token.

143
00:08:50,960 --> 00:08:54,120
Speaker 1: In order to enable you to buy that token, we

144
00:08:54,160 --> 00:08:56,280
Speaker 1: found a market maker. You need someone else on the

145
00:08:56,320 --> 00:08:59,120
Speaker 1: exchange that wants to sell a token at the exact

146
00:08:59,120 --> 00:09:03,640
Speaker 1: same time, the exact same amount, and the exact same price,

147
00:09:04,520 --> 00:09:07,839
Speaker 1: and doesn't happen. And so there's a need for liquidity.

148
00:09:07,920 --> 00:09:10,719
Speaker 1: This is what liquidity is all about. And that liquidity

149
00:09:11,040 --> 00:09:14,760
Speaker 1: is provided through a market maker. So what does the

150
00:09:14,840 --> 00:09:20,679
Speaker 1: market maker market? Market maker stands ready to offer a

151
00:09:20,800 --> 00:09:24,280
Speaker 1: security or token or buy a security or token, right,

152
00:09:24,360 --> 00:09:28,320
Speaker 1: they provide a quote that's called a bid and then ask.

153
00:09:28,360 --> 00:09:30,280
Speaker 1: A bide is a willingness to pay. The ask is

154
00:09:30,320 --> 00:09:34,680
Speaker 1: a willingness to sell at a certain price. That's just

155
00:09:34,800 --> 00:09:39,880
Speaker 1: kind of definition players in terms. My hypothesis at a

156
00:09:39,960 --> 00:09:44,680
Speaker 1: high level is that f t X had a bad

157
00:09:44,880 --> 00:09:51,079
Speaker 1: market making relationship with all made a They faced increasing

158
00:09:51,120 --> 00:09:57,240
Speaker 1: competition from better players like Jump at Wintermute. That market

159
00:09:57,240 --> 00:10:01,560
Speaker 1: making operation was negative. They were losing me Alameda had

160
00:10:01,600 --> 00:10:04,679
Speaker 1: to resort to more aggressive forms of risk taking to

161
00:10:04,800 --> 00:10:08,360
Speaker 1: attempt to make money. H f t X at some

162
00:10:08,440 --> 00:10:14,920
Speaker 1: point frost the line by tapping customer funds to avoid

163
00:10:15,600 --> 00:10:21,120
Speaker 1: UH an insolvency situation with with Alameda. So that's that's

164
00:10:21,120 --> 00:10:25,479
Speaker 1: why a high level story of what went wrong. Absolutely absolutely,

165
00:10:25,480 --> 00:10:27,959
Speaker 1: so I think a good starting point would be, I mean,

166
00:10:28,080 --> 00:10:30,920
Speaker 1: just to just to clarify one thing in particular around

167
00:10:30,960 --> 00:10:34,360
Speaker 1: this idea that f t X and Alameda were, you know,

168
00:10:34,480 --> 00:10:37,400
Speaker 1: sister companies. Is a term of herd used a lot.

169
00:10:37,440 --> 00:10:39,320
Speaker 1: I mean, what are the legalities of that? I mean,

170
00:10:39,679 --> 00:10:43,720
Speaker 1: having an exchange and a trading company sitting side by side.

171
00:10:43,880 --> 00:10:46,920
Speaker 1: Is that strictly allowed or is that something that's completely

172
00:10:46,960 --> 00:10:49,040
Speaker 1: illegal or is it is it? Is it kind of

173
00:10:49,080 --> 00:10:52,080
Speaker 1: in the middle. In the United States, it's strictly illegal.

174
00:10:52,360 --> 00:10:55,040
Speaker 1: And that's one of the reasons why this front took

175
00:10:55,040 --> 00:10:58,840
Speaker 1: place in the Bahamas. So in the United States, you

176
00:10:58,920 --> 00:11:02,559
Speaker 1: have this concept of the segregation of duties and functions.

177
00:11:03,000 --> 00:11:06,360
Speaker 1: Let me do example what I mean. So you can

178
00:11:06,400 --> 00:11:09,080
Speaker 1: have a concept of a broker, you have a concept

179
00:11:09,120 --> 00:11:11,920
Speaker 1: of an exchange, give a concept of a custodian. Let

180
00:11:11,960 --> 00:11:14,440
Speaker 1: me walk you through those briefly. I think we all

181
00:11:14,480 --> 00:11:16,800
Speaker 1: know what a broker is. You combine and sell stock

182
00:11:16,840 --> 00:11:20,640
Speaker 1: over the phone or online. That's your broker. The broker

183
00:11:20,920 --> 00:11:25,040
Speaker 1: can go to an exchange to actually execute that transaction.

184
00:11:25,080 --> 00:11:27,200
Speaker 1: That exchange could be the New York Stock Exchange, could

185
00:11:27,200 --> 00:11:29,800
Speaker 1: be mast Act, actually could be dozens of other exchanges

186
00:11:29,840 --> 00:11:33,920
Speaker 1: as well. After you buy that security, that security is

187
00:11:34,160 --> 00:11:38,120
Speaker 1: sustidied at a different kind of institution altogether. And that

188
00:11:38,240 --> 00:11:42,480
Speaker 1: institution could be say State Street or Perch King, for instance,

189
00:11:42,520 --> 00:11:46,040
Speaker 1: of the two leading custodians. One thing to point in mind, though,

190
00:11:46,720 --> 00:11:49,280
Speaker 1: you will never find New York Stock Exchange brokering now

191
00:11:49,360 --> 00:11:55,360
Speaker 1: security or custodiness security. These role distinct functions and it's

192
00:11:55,400 --> 00:11:59,840
Speaker 1: illegal to perform any more of those functions. And part

193
00:11:59,880 --> 00:12:03,360
Speaker 1: of that is because of things like the Madoff scandal,

194
00:12:03,640 --> 00:12:05,960
Speaker 1: in addition to other laws that predate that. So in

195
00:12:05,960 --> 00:12:08,280
Speaker 1: the case of burning mad Off, he had his own

196
00:12:08,280 --> 00:12:10,800
Speaker 1: accounting firm, he was his own broker, and he was

197
00:12:10,840 --> 00:12:13,840
Speaker 1: casting all acids, so there was no checks and balances

198
00:12:13,880 --> 00:12:17,760
Speaker 1: and there are no controls. And that is why f

199
00:12:17,920 --> 00:12:22,360
Speaker 1: t X US allegedly a sovereign and probably their customers

200
00:12:22,360 --> 00:12:24,800
Speaker 1: will receive their funds unless it's caught up in the

201
00:12:24,800 --> 00:12:29,840
Speaker 1: s bankruptcy proceeding and my ft X International bahamas Uh.

202
00:12:30,360 --> 00:12:34,959
Speaker 1: These these issues and I think a useful a useful

203
00:12:35,040 --> 00:12:38,040
Speaker 1: kind of analogy going back to Bernie Madoff and and

204
00:12:38,080 --> 00:12:40,120
Speaker 1: the fact that he was you know, he was fulfilling

205
00:12:40,160 --> 00:12:43,440
Speaker 1: all these roles. An analogy that you've touched on in

206
00:12:43,600 --> 00:12:47,160
Speaker 1: the thread is this idea of of a casino, of

207
00:12:47,200 --> 00:12:50,880
Speaker 1: gamblers at a casino and f t well in this

208
00:12:50,920 --> 00:12:53,920
Speaker 1: case Alameda, and is that you know an f t

209
00:12:54,120 --> 00:12:57,560
Speaker 1: X are the house. Then you have retail traders, you know,

210
00:12:57,600 --> 00:13:01,199
Speaker 1: playing at the tables, but all meters also playing at

211
00:13:01,200 --> 00:13:04,880
Speaker 1: the tables. And it's because it's so closely linked to

212
00:13:04,960 --> 00:13:08,040
Speaker 1: f t X, it's also able to see is also

213
00:13:08,080 --> 00:13:10,400
Speaker 1: able to see what everyone else is betting. So it's

214
00:13:10,440 --> 00:13:14,760
Speaker 1: got this huge, huge advantage supposedly that's right, I might

215
00:13:14,800 --> 00:13:17,000
Speaker 1: only walk through that house metaphor, it's it's a great

216
00:13:17,040 --> 00:13:23,320
Speaker 1: analogy here. So Burning Matto and SPF were both advertising,

217
00:13:23,679 --> 00:13:25,800
Speaker 1: and you can see some in the pitch book from SPF,

218
00:13:25,800 --> 00:13:30,800
Speaker 1: which is floating online. They were advertising the idea of

219
00:13:30,960 --> 00:13:33,800
Speaker 1: high consistent risk adjusted reference. That's part of the al

220
00:13:33,920 --> 00:13:37,640
Speaker 1: made up pitchbook, which sues you criticized yet some slides

221
00:13:37,679 --> 00:13:42,400
Speaker 1: out there on Twitter, right, and frequency training is actually

222
00:13:42,440 --> 00:13:47,040
Speaker 1: a very high profitable strategy and makes consistent money up

223
00:13:47,120 --> 00:13:51,760
Speaker 1: until a dozen and in that business, what you're doing

224
00:13:51,840 --> 00:13:55,120
Speaker 1: is you're making thousands, if not hundreds of thousands of

225
00:13:55,200 --> 00:13:59,240
Speaker 1: small micro bets, and those bets are in the provision

226
00:13:59,280 --> 00:14:01,320
Speaker 1: of liquidity to a client. What does that mean. It

227
00:14:01,320 --> 00:14:03,680
Speaker 1: means that if you got trying to buy a stock,

228
00:14:03,840 --> 00:14:05,600
Speaker 1: I'm gonna give you the look food and I'm gonna

229
00:14:05,679 --> 00:14:08,480
Speaker 1: sell you that, and I'm going to capture that bidst spread.

230
00:14:08,520 --> 00:14:13,280
Speaker 1: And that bidest spread is the gap between what I'm

231
00:14:13,320 --> 00:14:16,120
Speaker 1: willing to pay for a stock or a token what

232
00:14:16,160 --> 00:14:18,880
Speaker 1: I'm willing to sell for it. So long as I

233
00:14:18,880 --> 00:14:22,560
Speaker 1: get random ortars on either side of that, I will

234
00:14:22,640 --> 00:14:26,280
Speaker 1: capture that spread. I'm making a market. So it's a

235
00:14:26,280 --> 00:14:31,080
Speaker 1: good business if you're if you make money of those trades,

236
00:14:31,360 --> 00:14:34,920
Speaker 1: on hundreds of thousands of trades, you're gonna make money

237
00:14:35,040 --> 00:14:38,680
Speaker 1: due to the laws of probability. Now, what happened here

238
00:14:39,120 --> 00:14:42,560
Speaker 1: my thesis is that you had smarter, faster players enter

239
00:14:42,600 --> 00:14:44,880
Speaker 1: the category like Jump and Wintermute. In fact, you can

240
00:14:44,960 --> 00:14:48,320
Speaker 1: look at data on chain and it shows that Winter

241
00:14:48,480 --> 00:14:50,360
Speaker 1: Make was Winter. It was making a lot of money

242
00:14:50,680 --> 00:14:54,520
Speaker 1: trading against Alimta. It's a lot of data that so,

243
00:14:54,680 --> 00:14:57,680
Speaker 1: but FTX needs Alamata to make a market. Otherwise they

244
00:14:57,720 --> 00:15:00,920
Speaker 1: can't have an exchange. There's no liquidity, and that's how

245
00:15:00,920 --> 00:15:05,280
Speaker 1: FTX makes its revenue is changing these transaction fees and alimator.

246
00:15:05,400 --> 00:15:09,120
Speaker 1: To your point, they need an exchange because that's where

247
00:15:09,120 --> 00:15:13,000
Speaker 1: they have an edge. They had a compared advantage because

248
00:15:13,040 --> 00:15:16,240
Speaker 1: they can see this order flow. And it's alleged, it's

249
00:15:16,280 --> 00:15:19,400
Speaker 1: alleged that they had special treatment, they had like a

250
00:15:19,480 --> 00:15:23,960
Speaker 1: back door. They had no margin called process. There's a

251
00:15:24,000 --> 00:15:28,960
Speaker 1: no liquidation from from fts. The issue, however, is if

252
00:15:28,960 --> 00:15:31,200
Speaker 1: you want to be a good market maker, if you

253
00:15:31,240 --> 00:15:33,400
Speaker 1: want to be that house, you have to have a

254
00:15:33,440 --> 00:15:36,960
Speaker 1: little latency. That means having fast data plaps. And we'll

255
00:15:37,000 --> 00:15:38,640
Speaker 1: let me explain a little bit more what's going on there.

256
00:15:38,720 --> 00:15:42,000
Speaker 1: So what a market maker is doing is they're scanning

257
00:15:42,160 --> 00:15:44,800
Speaker 1: all the other exchanges. They're looking at coin based, we're

258
00:15:44,800 --> 00:15:47,400
Speaker 1: looking at binange, looking at all the major exchangers exchanges

259
00:15:47,440 --> 00:15:51,440
Speaker 1: to identify where the markets quoting, what's bid, what's asked,

260
00:15:51,880 --> 00:15:54,600
Speaker 1: because if you missed quote, let's say coin based quotes

261
00:15:54,800 --> 00:15:59,040
Speaker 1: twelve dollars for a token, they're bidding twelve dollars and

262
00:15:59,400 --> 00:16:02,440
Speaker 1: I bid too much, a bit higher than point base,

263
00:16:03,360 --> 00:16:06,360
Speaker 1: then some of like mont it's gonna sell me at

264
00:16:06,400 --> 00:16:09,640
Speaker 1: twelve dollars fifty cents and they're gonna and they're gonna

265
00:16:10,200 --> 00:16:13,120
Speaker 1: they can buy have an obstinating transactional coin based So

266
00:16:13,160 --> 00:16:15,440
Speaker 1: they made fifty cents and I'm out fifty cents. So

267
00:16:15,640 --> 00:16:18,560
Speaker 1: laaten seed speed matters and need to have great data tights,

268
00:16:18,560 --> 00:16:21,840
Speaker 1: and you to have ultra fast computers, you know, technology

269
00:16:21,880 --> 00:16:26,120
Speaker 1: like PHO located servers. You can't rely on Amazon Web Services,

270
00:16:26,280 --> 00:16:29,960
Speaker 1: which they were spending money on f t X and Alameda.

271
00:16:29,960 --> 00:16:32,760
Speaker 1: We're using we're using a WS and the Zion was

272
00:16:32,760 --> 00:16:36,600
Speaker 1: a creditor. Now presume they were using as other kinds

273
00:16:36,600 --> 00:16:39,440
Speaker 1: of things. But if you're using a RUS to go

274
00:16:39,480 --> 00:16:42,440
Speaker 1: to your market making, you're gonna lose. You're gonna lose

275
00:16:42,480 --> 00:16:45,680
Speaker 1: that battle. And this idea of this idea of high

276
00:16:45,680 --> 00:16:49,000
Speaker 1: frequency trading, I mean, this is the stuff that Michael

277
00:16:49,080 --> 00:16:52,000
Speaker 1: Lewis talks about in in Flash Boys. Isn't it these

278
00:16:52,000 --> 00:16:55,640
Speaker 1: guys spending spending literally, I mean it's hundreds of millions

279
00:16:55,640 --> 00:16:58,880
Speaker 1: of dollars, isn't it on on technology that will that

280
00:16:59,000 --> 00:17:03,080
Speaker 1: will buy them thousands of a second in these in

281
00:17:03,160 --> 00:17:05,440
Speaker 1: being able to exec up these trades that's right. In

282
00:17:05,720 --> 00:17:08,520
Speaker 1: the US equity markets, it's very advanced and much more

283
00:17:08,560 --> 00:17:11,439
Speaker 1: mature than in fipto, so as to be clar fipto

284
00:17:12,200 --> 00:17:15,639
Speaker 1: you don't need like microwave technology yet. But it's a

285
00:17:15,720 --> 00:17:18,840
Speaker 1: race to the bottom. Whoever is faster wins. So it's

286
00:17:18,840 --> 00:17:20,679
Speaker 1: a speed game, and to get speed, you have to

287
00:17:20,720 --> 00:17:23,840
Speaker 1: invest in infrastructure. So for example, one of the leaders

288
00:17:23,840 --> 00:17:27,600
Speaker 1: in the US market would be Citadel or Night Capital

289
00:17:27,600 --> 00:17:32,800
Speaker 1: Group or New Sigma or Renaissance. Technlogies are storied institutions.

290
00:17:33,200 --> 00:17:37,119
Speaker 1: They're very private, they're very profitable, and they invest billions

291
00:17:37,240 --> 00:17:40,239
Speaker 1: of dollars, billions of dollars, so much so that if

292
00:17:40,280 --> 00:17:43,120
Speaker 1: you've got a five optic cable Lincoln, say New York

293
00:17:43,200 --> 00:17:46,160
Speaker 1: City to the woman Stock Exchange, that's too slow because

294
00:17:47,080 --> 00:17:48,960
Speaker 1: the speed of light needs to bend and curb in

295
00:17:49,000 --> 00:17:53,520
Speaker 1: the water, and that creates a disadvantage. It's that that's

296
00:17:53,560 --> 00:17:59,159
Speaker 1: how important speed is, so they'll invest in microwave technology.

297
00:17:59,200 --> 00:18:06,280
Speaker 1: It's straightline half the refraction of light. Slow's creative disadvantage. Again,

298
00:18:06,320 --> 00:18:08,600
Speaker 1: that's not using cryptogy, but lit'll get there for sure,

299
00:18:08,600 --> 00:18:14,119
Speaker 1: it has to. And Okay, so it seems like it

300
00:18:14,160 --> 00:18:17,760
Speaker 1: seems like a Lameter. In Alameter in particular, they were

301
00:18:17,800 --> 00:18:20,240
Speaker 1: they were hopelessly out of their depth. I mean, you know,

302
00:18:20,280 --> 00:18:23,160
Speaker 1: to go back to the idea of the casino, they've

303
00:18:23,160 --> 00:18:27,359
Speaker 1: started to play sort of very high stakes poker, and

304
00:18:28,640 --> 00:18:32,760
Speaker 1: much bigger, much wilier, and more experienced players have come

305
00:18:32,800 --> 00:18:34,960
Speaker 1: in and sat down at the table with them and

306
00:18:35,000 --> 00:18:38,680
Speaker 1: just started started cleaning them out on every hand. Is

307
00:18:38,720 --> 00:18:41,440
Speaker 1: that is that fair analogy to use? That's generally right?

308
00:18:41,960 --> 00:18:44,600
Speaker 1: I'll say this, like the house generally has an edge, right,

309
00:18:44,720 --> 00:18:47,760
Speaker 1: casinoes make money kipt you opposite one of the probabilities.

310
00:18:47,840 --> 00:18:51,159
Speaker 1: So they're playing many many cooker hands on which they

311
00:18:51,160 --> 00:18:53,800
Speaker 1: were a small edged. However, one day the game changes

312
00:18:53,840 --> 00:18:57,560
Speaker 1: because better players show up and they have the edge

313
00:18:57,560 --> 00:19:01,760
Speaker 1: because of the speed game. So now Alameda starts to

314
00:19:01,920 --> 00:19:05,240
Speaker 1: use other types of techniques and takes on real risk.

315
00:19:05,359 --> 00:19:08,600
Speaker 1: Real risk means they're making a bet on the market direction.

316
00:19:09,359 --> 00:19:11,440
Speaker 1: Hr T never actually makes a bet in the market direction.

317
00:19:11,440 --> 00:19:14,040
Speaker 1: They're willing to buy and sell the same token. They're

318
00:19:14,040 --> 00:19:16,840
Speaker 1: just making a bet on that spread, on the gap

319
00:19:17,320 --> 00:19:20,120
Speaker 1: between the bid and the offer. That's it. They don't

320
00:19:20,160 --> 00:19:22,600
Speaker 1: have a view on where these prices are going because

321
00:19:22,640 --> 00:19:26,439
Speaker 1: they're entering an exiting position so quickly that they're actually

322
00:19:26,480 --> 00:19:33,159
Speaker 1: marketing neutral. So now Almeta starts investing in protocols and

323
00:19:33,240 --> 00:19:37,439
Speaker 1: they start doing like these VC strategies, meaning getting access

324
00:19:37,440 --> 00:19:41,400
Speaker 1: to the pre mind, offering to make a market uh

325
00:19:41,440 --> 00:19:44,800
Speaker 1: and then mandating that where they invest that their port

326
00:19:44,840 --> 00:19:50,120
Speaker 1: codes or portfolio companies have to custody at FTS. So

327
00:19:50,160 --> 00:19:53,359
Speaker 1: they started justing and Caroline discusses it from the tweet threat,

328
00:19:53,440 --> 00:19:58,720
Speaker 1: she acknowledges publicly that SPF change their strategy. So this

329
00:19:58,800 --> 00:20:03,080
Speaker 1: is purely because the ft X they're having to Alameda

330
00:20:03,160 --> 00:20:05,639
Speaker 1: are having to figure out new ways to make money.

331
00:20:05,640 --> 00:20:07,639
Speaker 1: You know, they're losing at this They're losing at this

332
00:20:07,760 --> 00:20:11,560
Speaker 1: market making game. They're being cleaned out by by people

333
00:20:11,600 --> 00:20:17,040
Speaker 1: with more experience and better, better equipment. So they look

334
00:20:17,119 --> 00:20:19,879
Speaker 1: to they look to other ways and and this is

335
00:20:19,880 --> 00:20:23,879
Speaker 1: when these directional bets on various on various ship cooins

336
00:20:23,880 --> 00:20:27,880
Speaker 1: start coming into play. Well, that's the idea exactly. They

337
00:20:27,880 --> 00:20:29,359
Speaker 1: have to find a new way to make money. Business

338
00:20:29,760 --> 00:20:37,040
Speaker 1: article that wasn't Forced that reports that in Luna prior

339
00:20:37,119 --> 00:20:41,720
Speaker 1: three years Capital part Genesis last year Bull Market that

340
00:20:42,800 --> 00:20:44,800
Speaker 1: f t X and al made a lost three point

341
00:20:44,920 --> 00:20:49,199
Speaker 1: seven billion dollars. So they were losing money and they

342
00:20:49,200 --> 00:20:51,800
Speaker 1: had to find a way to make money. And again

343
00:20:52,080 --> 00:20:54,520
Speaker 1: FETs now made a need each other with that alimate

344
00:20:54,600 --> 00:20:58,800
Speaker 1: ANX and exchange for liquidity. Ali made it without FTNS

345
00:20:58,840 --> 00:21:01,159
Speaker 1: has no edge, and that's a business is to go

346
00:21:01,320 --> 00:21:06,280
Speaker 1: trade make markets. So yes, I believe that's exactly the case.

347
00:21:06,359 --> 00:21:10,480
Speaker 1: They started to shift their approse shift strategies, taking out

348
00:21:10,480 --> 00:21:15,000
Speaker 1: a real risk, and they started losing money on those

349
00:21:15,080 --> 00:21:17,560
Speaker 1: risks on those bets as well, and they of course

350
00:21:17,640 --> 00:21:22,119
Speaker 1: added leverage and then things and then things start to

351
00:21:22,200 --> 00:21:25,439
Speaker 1: just keep you know, the slide just accelerates. I guess

352
00:21:26,960 --> 00:21:29,080
Speaker 1: that's right, that's right. You know, here's an example. So

353
00:21:29,119 --> 00:21:36,120
Speaker 1: apparently Alameta lost a billion dollars via a lever bet

354
00:21:36,240 --> 00:21:40,520
Speaker 1: on mobile coin. Right, so that's another loss. Consider that

355
00:21:40,600 --> 00:21:43,879
Speaker 1: FKX only raised two billion dollars in equity canpable. By

356
00:21:43,880 --> 00:21:46,920
Speaker 1: the way, they raised two billion dollars in equity capable,

357
00:21:47,480 --> 00:21:51,240
Speaker 1: they lost three point seven billion dollars before this year,

358
00:21:52,960 --> 00:21:55,800
Speaker 1: so the fraud must have happened before this year. They're

359
00:21:55,840 --> 00:22:00,760
Speaker 1: losing more money then, almost twice as more as the

360
00:22:00,840 --> 00:22:04,879
Speaker 1: money they raised in capital, so they must have tapped

361
00:22:04,880 --> 00:22:12,040
Speaker 1: customer funds well, but well before this crypto bear market, right,

362
00:22:12,520 --> 00:22:15,360
Speaker 1: But it gets work because when the crypto bear market starts,

363
00:22:15,840 --> 00:22:19,240
Speaker 1: what happens. Most people on exchangers are selling. That's what

364
00:22:19,280 --> 00:22:22,040
Speaker 1: a bear market is, and more sellers and buyers. So

365
00:22:22,119 --> 00:22:26,560
Speaker 1: who's making their market Alameda Alamada has gotta make a market.

366
00:22:26,600 --> 00:22:28,320
Speaker 1: They gotta take the other side of these trade. So

367
00:22:28,400 --> 00:22:33,080
Speaker 1: people are selling, they're dumping on who Alameda, So they're

368
00:22:33,200 --> 00:22:36,200
Speaker 1: they're not in a good position, and their positions deteriorating.

369
00:22:36,480 --> 00:22:39,120
Speaker 1: Of course, somewhere along the line, somewhere along the way

370
00:22:39,200 --> 00:22:41,520
Speaker 1: FTX tries to issue this f t T token. They

371
00:22:41,520 --> 00:22:45,000
Speaker 1: do issue it, it creates some capital for them, and

372
00:22:45,040 --> 00:22:47,159
Speaker 1: you know, I think you've probably analyzed this guy and

373
00:22:47,240 --> 00:22:49,679
Speaker 1: guy about how they were borrowing against this illiquid token

374
00:22:49,720 --> 00:22:54,800
Speaker 1: f t T, right, So that doesn't help anything. But

375
00:22:55,000 --> 00:22:57,359
Speaker 1: you know, my water point was that I think initially

376
00:22:57,400 --> 00:22:59,399
Speaker 1: three or four weeks ago, people focused on that and

377
00:22:59,440 --> 00:23:02,040
Speaker 1: so that was the downfalls element. It wasn't no, no, no no, no.

378
00:23:02,840 --> 00:23:08,920
Speaker 1: That was actually a survival tactic by a TS after

379
00:23:08,960 --> 00:23:11,760
Speaker 1: they were earning the full They're throwing stuff at a

380
00:23:11,840 --> 00:23:16,080
Speaker 1: wall and seeing what sticks. At that point, and I

381
00:23:16,119 --> 00:23:19,520
Speaker 1: mean presumably for you know, this being the case, if

382
00:23:19,560 --> 00:23:22,840
Speaker 1: if this hole sort of opened up in in one

383
00:23:22,920 --> 00:23:25,680
Speaker 1: you know, it's been money has just been pouring into

384
00:23:25,720 --> 00:23:28,960
Speaker 1: it ever since. So every move that f t X

385
00:23:29,080 --> 00:23:33,560
Speaker 1: and Alameda have made in over the last year or so,

386
00:23:33,960 --> 00:23:37,000
Speaker 1: over the last eighteen months, however long it's been since,

387
00:23:37,040 --> 00:23:40,600
Speaker 1: you know, since they really started to bleed, every move

388
00:23:40,640 --> 00:23:44,080
Speaker 1: they've made has been presumably to try and and plug

389
00:23:44,160 --> 00:23:48,400
Speaker 1: this hole that gets ever bigger no matter what they try.

390
00:23:48,600 --> 00:23:51,359
Speaker 1: That's right. They've they've tried to do two things. So

391
00:23:51,400 --> 00:23:54,400
Speaker 1: when has plugged the hole by pivoting trying to make

392
00:23:54,480 --> 00:23:56,840
Speaker 1: money here they're taking on more risks trying to raise

393
00:23:56,880 --> 00:24:01,520
Speaker 1: money which no one's doing, tapping on the chistomer. Also,

394
00:24:01,720 --> 00:24:06,000
Speaker 1: they took steps to hit from being discovered. They never

395
00:24:06,080 --> 00:24:10,040
Speaker 1: had a CFO. Yeah, what does that make any sense?

396
00:24:10,960 --> 00:24:14,439
Speaker 1: They didn't have border directors that met the controls, They

397
00:24:14,480 --> 00:24:20,200
Speaker 1: never had a real big for arter. So not only

398
00:24:20,440 --> 00:24:24,240
Speaker 1: were they trying to survive illegally by commuting fraud and

399
00:24:24,320 --> 00:24:28,440
Speaker 1: multiple layers are fraud to be clear, they also two

400
00:24:28,560 --> 00:24:37,200
Speaker 1: steps to a stop any type of scrutiny, checks and balances, controls,

401
00:24:38,600 --> 00:24:42,480
Speaker 1: or even management their their head of compliance. Was was

402
00:24:42,520 --> 00:24:46,159
Speaker 1: a was working at a previously at a fraud over betting,

403
00:24:49,040 --> 00:24:52,520
Speaker 1: so it's a built It's my opinion is that this

404
00:24:52,560 --> 00:24:56,520
Speaker 1: is a deliberate, willful fraud, and therefore it's bigger than

405
00:24:56,520 --> 00:24:59,120
Speaker 1: burning made off. The destruction of capital and the losses

406
00:24:59,520 --> 00:25:03,199
Speaker 1: and the uss have spread out across at least a

407
00:25:03,280 --> 00:25:09,760
Speaker 1: million investors globally, Unlike Matta was concentrated amongst fewer wealthy people,

408
00:25:09,880 --> 00:25:13,600
Speaker 1: and they were able to recover the vast majority of

409
00:25:13,680 --> 00:25:16,840
Speaker 1: the principle and making many of these investors poll. That

410
00:25:16,880 --> 00:25:18,680
Speaker 1: will not happen in the case of f t X.

411
00:25:19,400 --> 00:25:22,320
Speaker 1: That's why f t X a bigger fraud than burning

412
00:25:22,359 --> 00:25:27,560
Speaker 1: Matto and the pain that he caused two small investors globally,

413
00:25:28,400 --> 00:25:32,159
Speaker 1: and the loss of confidence in not just f t

414
00:25:32,400 --> 00:25:36,359
Speaker 1: X but crypto institutions. Everything's been tested. The consequences of

415
00:25:36,359 --> 00:25:41,240
Speaker 1: this are are severe, and we're still going through kind

416
00:25:41,240 --> 00:25:43,320
Speaker 1: of the involving in that concasion, like the long term

417
00:25:43,359 --> 00:25:48,879
Speaker 1: secular promise for crypto was there. However, Uh, you know,

418
00:25:48,920 --> 00:25:51,359
Speaker 1: we were in a winter before f t X, and

419
00:25:51,400 --> 00:25:55,600
Speaker 1: I've got a winter within a winter, and it's I mean,

420
00:25:56,200 --> 00:25:59,600
Speaker 1: even those people who didn't have any funds on ft

421
00:25:59,800 --> 00:26:02,280
Speaker 1: X who never interacted with it at all. You know,

422
00:26:02,480 --> 00:26:05,399
Speaker 1: if you're in crypto, if you're in this industry in

423
00:26:05,440 --> 00:26:08,480
Speaker 1: any way, shape or form, you are affected no matter

424
00:26:08,640 --> 00:26:11,680
Speaker 1: no matter what your exposure to f t X or LaMDA.

425
00:26:12,520 --> 00:26:15,119
Speaker 1: And I guess with with Maddof, it was it was,

426
00:26:15,200 --> 00:26:17,800
Speaker 1: as you say, a lot more a lot more concentrated,

427
00:26:17,840 --> 00:26:21,760
Speaker 1: a lot more localized amongst you know, a relatively smaller

428
00:26:21,880 --> 00:26:30,880
Speaker 1: pool of of investors and a wealthy yeah, not just

429
00:26:31,160 --> 00:26:34,080
Speaker 1: not just you know, the average people. And of course

430
00:26:34,200 --> 00:26:37,399
Speaker 1: these stories about people with really not very much to

431
00:26:37,480 --> 00:26:40,680
Speaker 1: lose in the first place, losing everything you know, that's

432
00:26:40,680 --> 00:26:43,440
Speaker 1: still being stuck on the exchange. It's it's terrible. It's

433
00:26:43,440 --> 00:26:49,359
Speaker 1: a heart heartbreaking, absolutely, And I mean madd Off didn't

434
00:26:49,800 --> 00:26:52,040
Speaker 1: Maddof didn't act alone, did he. I mean, you know,

435
00:26:52,119 --> 00:26:55,320
Speaker 1: some people close to him seemed to have known what

436
00:26:55,440 --> 00:26:59,280
Speaker 1: was going on, but you know, it was obviously the buck.

437
00:26:59,440 --> 00:27:03,680
Speaker 1: That buck eventually stopped with him for a fraud this size.

438
00:27:03,760 --> 00:27:06,560
Speaker 1: For what's been going on at ft X and Alameda

439
00:27:06,680 --> 00:27:09,880
Speaker 1: for the past eighteen months or so, I mean, SPF

440
00:27:09,920 --> 00:27:12,000
Speaker 1: seems to be the big kind of lightning rod for

441
00:27:12,000 --> 00:27:15,720
Speaker 1: criticism here partly I guess, because he's out there, you know,

442
00:27:16,320 --> 00:27:18,600
Speaker 1: running his mouth with a sort of verbal diarrhea at

443
00:27:18,600 --> 00:27:22,320
Speaker 1: the moment, just you know, just spewing forth these these

444
00:27:22,359 --> 00:27:26,159
Speaker 1: attempts to kind of, you know, launder his reputation, I guess.

445
00:27:26,680 --> 00:27:30,760
Speaker 1: And everyone else involved has kept so so quiet. But

446
00:27:30,800 --> 00:27:33,920
Speaker 1: I mean other people that f t X and Alameda

447
00:27:34,280 --> 00:27:36,879
Speaker 1: must have known about this. This can't this can't just

448
00:27:37,000 --> 00:27:40,520
Speaker 1: be SPF Surely that would be my conclusion. That would

449
00:27:40,520 --> 00:27:43,159
Speaker 1: be my conclusion as well. And I'll come back to

450
00:27:43,200 --> 00:27:45,720
Speaker 1: then a second. But one thing I'll say is regarding

451
00:27:45,720 --> 00:27:50,160
Speaker 1: the sam's verbal diarrhea, he has a deliberate strategy here.

452
00:27:50,600 --> 00:27:54,040
Speaker 1: His argument in a nutshell. He is creaming he was

453
00:27:54,080 --> 00:27:58,880
Speaker 1: a negligent. He is claiming he was grossly negligent. Of course,

454
00:27:58,920 --> 00:28:02,000
Speaker 1: it's a legal term that implies civil liability, meaning he's

455
00:28:02,040 --> 00:28:06,919
Speaker 1: saying he's essentially saying doing That's what he's saying. But

456
00:28:07,000 --> 00:28:09,200
Speaker 1: he's saying he's not a criminal. He didn't commit fraud.

457
00:28:10,400 --> 00:28:14,240
Speaker 1: That's why he's interviews. He's saying off shots should have

458
00:28:14,280 --> 00:28:17,120
Speaker 1: done actuldn't better, by the way, and that George Stefanopolis

459
00:28:17,200 --> 00:28:21,000
Speaker 1: video interview. He says not that he didn't focus on risk.

460
00:28:21,080 --> 00:28:24,800
Speaker 1: He didn't do it full stop, just clearly gross negligence. Right,

461
00:28:25,200 --> 00:28:29,880
Speaker 1: But he's not owning fraud. So there there's a there's

462
00:28:29,920 --> 00:28:33,280
Speaker 1: a method to his verbal diarrhea. He's trying to he's

463
00:28:33,320 --> 00:28:38,040
Speaker 1: trying to focus on that right now, on your point,

464
00:28:38,120 --> 00:28:43,800
Speaker 1: guy around others involved. Look, Alameda allegedly had a back

465
00:28:43,840 --> 00:28:49,600
Speaker 1: door that exempted them from liquidations versus other customers. So

466
00:28:49,640 --> 00:28:53,120
Speaker 1: that was coded. Now that coding took place either at

467
00:28:53,160 --> 00:28:57,280
Speaker 1: the direction of SAM or someone coded it. Okay, I'm

468
00:28:57,280 --> 00:28:59,880
Speaker 1: pretty sure it came from SAM. But still someone had

469
00:28:59,880 --> 00:29:03,840
Speaker 1: to coded. Second, you had a director of compliance that

470
00:29:04,040 --> 00:29:07,360
Speaker 1: had an obligation, had a duty. Even Also, if you

471
00:29:07,400 --> 00:29:10,560
Speaker 1: don't have to see a foe. Someone is looking at

472
00:29:10,720 --> 00:29:13,280
Speaker 1: the pan L, the profit and loss or income statement.

473
00:29:13,400 --> 00:29:15,160
Speaker 1: By the way, this is the one thing that is

474
00:29:15,240 --> 00:29:18,520
Speaker 1: completely the s S S stand keeps staying saying, oh, well,

475
00:29:18,600 --> 00:29:22,000
Speaker 1: we don't have the numbers. But here's the thing. The

476
00:29:22,040 --> 00:29:26,240
Speaker 1: Exchange and Alimta every day would have something called the

477
00:29:26,280 --> 00:29:30,480
Speaker 1: trading pan L. It shows all the open positions and

478
00:29:31,040 --> 00:29:33,480
Speaker 1: it shows how much money you made or loss that day.

479
00:29:33,520 --> 00:29:36,760
Speaker 1: It's like thinking the house casino, how much money do

480
00:29:36,800 --> 00:29:39,160
Speaker 1: we make or lose this day? And do they new

481
00:29:39,200 --> 00:29:41,720
Speaker 1: analysis of that? Are we making money on this trade

482
00:29:41,760 --> 00:29:45,120
Speaker 1: or losing this trade? Not just on the exchange where

483
00:29:45,120 --> 00:29:47,720
Speaker 1: they're doing, but also on the margin. And they say, okay,

484
00:29:47,760 --> 00:29:50,400
Speaker 1: how many loans we have out standing? What's an interesting

485
00:29:50,480 --> 00:29:54,360
Speaker 1: come on those loans? Are those loans backed by the

486
00:29:54,400 --> 00:29:59,440
Speaker 1: appropriate collateral? Um? Do assets equals liabilities and equities? A

487
00:29:59,520 --> 00:30:02,880
Speaker 1: basic things? It's not. It's not like he's trying to

488
00:30:02,880 --> 00:30:05,360
Speaker 1: make the argument that risk management was supposed to happen

489
00:30:05,360 --> 00:30:07,600
Speaker 1: somewhere else and he didn't do it. But in the

490
00:30:07,720 --> 00:30:10,400
Speaker 1: nature of an exchange and the training, it's the same thing,

491
00:30:11,280 --> 00:30:15,600
Speaker 1: Like you need that dashboard that says here's a training piano,

492
00:30:15,680 --> 00:30:18,240
Speaker 1: and of course he had that. This is a guy

493
00:30:18,440 --> 00:30:23,440
Speaker 1: that was doing sweet threads on coin bases pianola very

494
00:30:23,480 --> 00:30:28,200
Speaker 1: precisely analyzing transaction fees, and he's saying he doesn't have that.

495
00:30:28,560 --> 00:30:32,520
Speaker 1: He doesn't have that reporting or infrastrate he acknowledges he dashboards, right,

496
00:30:32,840 --> 00:30:36,400
Speaker 1: he doesn't have the central bashford describing his own piano

497
00:30:36,560 --> 00:30:40,000
Speaker 1: and makes no sense. It's yeah, I guess, and I

498
00:30:40,360 --> 00:30:44,400
Speaker 1: mean it's it's focused, isn't it Negligence carries a lot

499
00:30:44,520 --> 00:30:49,680
Speaker 1: lighter sentence than than criminality than outright fraud. So I mean,

500
00:30:49,720 --> 00:30:52,040
Speaker 1: I guess, I guess what we're seeing now is the

501
00:30:52,400 --> 00:30:55,960
Speaker 1: you know, is the start of of SPF's defense. But

502
00:30:57,080 --> 00:30:59,120
Speaker 1: and I guess it's gonna be it's going to be

503
00:30:59,160 --> 00:31:02,320
Speaker 1: so interesting to see what's what happens with these with

504
00:31:02,400 --> 00:31:04,800
Speaker 1: these other people, the likes of the likes of Caroline,

505
00:31:04,840 --> 00:31:07,680
Speaker 1: the likes of Sam Trabuco and people like that, and

506
00:31:07,680 --> 00:31:12,040
Speaker 1: and Gary Wang who have all kept very very quiet. Um.

507
00:31:12,040 --> 00:31:15,040
Speaker 1: But I guess you know, the speculation, isn't there that

508
00:31:15,040 --> 00:31:18,600
Speaker 1: that that Caroline maybe may have cut a plea bargain

509
00:31:18,760 --> 00:31:21,440
Speaker 1: if if this photo of her in New York not

510
00:31:21,560 --> 00:31:24,280
Speaker 1: far from the District Attorney's office is to be believed.

511
00:31:25,000 --> 00:31:27,360
Speaker 1: Do you do you see that as as as as

512
00:31:27,400 --> 00:31:30,440
Speaker 1: a kind of likely outcome to this rum that you know,

513
00:31:30,840 --> 00:31:34,160
Speaker 1: the others at ft X and Alameda will seek to

514
00:31:34,360 --> 00:31:37,280
Speaker 1: pin this on Sam as as much as possible. I'm

515
00:31:37,280 --> 00:31:39,960
Speaker 1: not a from a defense attorney, but your your reasoning,

516
00:31:40,080 --> 00:31:45,360
Speaker 1: that sounds sounds right. Sure, these are young people in

517
00:31:45,400 --> 00:31:49,440
Speaker 1: their careers. They trusted Sam. There's some kind of hero

518
00:31:49,520 --> 00:31:54,360
Speaker 1: worship going on here, some of them may have been naive. Uh,

519
00:31:54,720 --> 00:31:59,920
Speaker 1: and I think it's in their best interest to cooperate

520
00:32:00,320 --> 00:32:03,680
Speaker 1: with Passe years and can I can I just pick

521
00:32:03,800 --> 00:32:06,480
Speaker 1: up on that on that point, you make realm about

522
00:32:06,520 --> 00:32:09,280
Speaker 1: these you know, these guys are young, their naive. So

523
00:32:09,320 --> 00:32:12,360
Speaker 1: many people have have commented on this, haven't they. It's like,

524
00:32:12,760 --> 00:32:15,920
Speaker 1: how on earth were these guys, you know, not that

525
00:32:16,040 --> 00:32:18,160
Speaker 1: long out of out of college, not that long out

526
00:32:18,160 --> 00:32:21,440
Speaker 1: of university. How on earth were they? Were they able

527
00:32:21,480 --> 00:32:24,440
Speaker 1: to run this thing? And when I was looking, you know,

528
00:32:24,480 --> 00:32:26,640
Speaker 1: when I was thinking about this obviously, and this is

529
00:32:26,720 --> 00:32:28,840
Speaker 1: this is related to what you talked about in the

530
00:32:28,840 --> 00:32:32,480
Speaker 1: tweet thread. But to go back just very briefly to

531
00:32:33,000 --> 00:32:36,600
Speaker 1: the sort of early days of Alameda Research. So I

532
00:32:36,600 --> 00:32:40,400
Speaker 1: think most people now are aware that that Alameda, that

533
00:32:40,160 --> 00:32:45,280
Speaker 1: Sam and Alameda kind of started off basically doing arbitrage trades,

534
00:32:45,600 --> 00:32:50,240
Speaker 1: trading the trading the kimchi premium, and you know, that

535
00:32:50,400 --> 00:32:53,920
Speaker 1: is how Alameda kind of made its name and you know,

536
00:32:54,040 --> 00:32:56,720
Speaker 1: got its kind of startup capital. I guess I think

537
00:32:56,760 --> 00:32:59,560
Speaker 1: the story is that they supposedly started with with two

538
00:33:00,040 --> 00:33:03,840
Speaker 1: dollars and you know, grew that by making these arbitrage

539
00:33:03,880 --> 00:33:08,080
Speaker 1: trades into into millions. Um, So, I guess does that

540
00:33:08,200 --> 00:33:11,280
Speaker 1: explain in a way that you know, these guys the

541
00:33:11,320 --> 00:33:14,120
Speaker 1: reason that they were able to get to this position

542
00:33:15,040 --> 00:33:18,640
Speaker 1: is because they started off doing something kind of relatively simple.

543
00:33:18,680 --> 00:33:22,920
Speaker 1: I mean, arbitraging is is is not a particularly sophisticated

544
00:33:22,920 --> 00:33:26,120
Speaker 1: trading strategy, as I understand it, and especially in a

545
00:33:26,200 --> 00:33:29,959
Speaker 1: market like crypto, which is still relatively unsophisticated. And and

546
00:33:30,040 --> 00:33:32,720
Speaker 1: back then, you know, I think we're talking kind of

547
00:33:34,760 --> 00:33:38,080
Speaker 1: you know, the fact that you've got this massive difference

548
00:33:38,160 --> 00:33:40,960
Speaker 1: in the price of all this appreciable difference in the

549
00:33:41,000 --> 00:33:44,680
Speaker 1: price of bitcoin on an exchange in the US, and

550
00:33:44,720 --> 00:33:49,040
Speaker 1: then you know, a different price in in South Korea

551
00:33:49,040 --> 00:33:53,880
Speaker 1: and Japan. I guess these guys kind of started off playing,

552
00:33:54,160 --> 00:33:56,520
Speaker 1: you know, playing a very simple game, if you like.

553
00:33:57,320 --> 00:34:01,959
Speaker 1: And as you say that Kuy developed over time, you know,

554
00:34:02,400 --> 00:34:06,200
Speaker 1: arbitraging becomes I guess, I guess is it a case

555
00:34:06,320 --> 00:34:09,040
Speaker 1: that the big players just got in and it and

556
00:34:09,040 --> 00:34:12,680
Speaker 1: and we're better at arbitraging than them, or do you

557
00:34:12,680 --> 00:34:16,440
Speaker 1: think it's more a case that the market itself just

558
00:34:16,440 --> 00:34:18,759
Speaker 1: just got a bit more sophisticated and these and these

559
00:34:18,840 --> 00:34:27,000
Speaker 1: arbitrage bets became kind of harder to make well. So

560
00:34:27,120 --> 00:34:30,920
Speaker 1: first off, arbitrage is rare and fleeting, and it generally

561
00:34:31,000 --> 00:34:34,200
Speaker 1: doesn't exist in markets. That's one. So that kim tree

562
00:34:34,239 --> 00:34:38,960
Speaker 1: trade you describe is very close to arbitrage. Arbitrage, of course,

563
00:34:39,000 --> 00:34:42,759
Speaker 1: is a riskless trade. You buy something in market X,

564
00:34:43,000 --> 00:34:46,680
Speaker 1: you sell in market Y simultaneously, so you don't have

565
00:34:46,719 --> 00:34:49,640
Speaker 1: any exposure. The kimchi trades close to that, but there's

566
00:34:49,680 --> 00:34:54,040
Speaker 1: some like time delays between various sections. Um you know.

567
00:34:54,080 --> 00:34:57,160
Speaker 1: Of course, that trade went away, and then they got

568
00:34:57,200 --> 00:35:01,560
Speaker 1: into marketing making, which is own high frequency training kind

569
00:35:01,600 --> 00:35:05,839
Speaker 1: of business. As we described, that's not ourb trush though

570
00:35:06,239 --> 00:35:09,719
Speaker 1: you're taking risk. HFTs can lose money too. Now when

571
00:35:09,719 --> 00:35:12,880
Speaker 1: a HPT was money, they stopped. But the thing he

572
00:35:12,920 --> 00:35:15,919
Speaker 1: didn't do, you stopped doing that business. You can see

573
00:35:15,920 --> 00:35:17,880
Speaker 1: it every day. You can see you have an edge

574
00:35:18,320 --> 00:35:20,640
Speaker 1: like the house. The house makes money fix cent of

575
00:35:20,680 --> 00:35:24,319
Speaker 1: the time, then fifty cent of the time, then fifty three,

576
00:35:24,440 --> 00:35:26,800
Speaker 1: and you can see, oh, you know what, we're making

577
00:35:26,960 --> 00:35:29,799
Speaker 1: less money every day. That would have been their experience.

578
00:35:30,520 --> 00:35:33,160
Speaker 1: When you get to fifty one, than fifty, then fifty

579
00:35:33,200 --> 00:35:36,080
Speaker 1: now you're just treading water. Then forty nine and a half,

580
00:35:36,120 --> 00:35:40,239
Speaker 1: then forty nine. That's the point when you exit side.

581
00:35:40,239 --> 00:35:41,799
Speaker 1: As I mentioned, my prior like I used to have

582
00:35:41,920 --> 00:35:44,719
Speaker 1: these kids out of trush strategies. So one day we

583
00:35:44,800 --> 00:35:48,000
Speaker 1: sat like okay, We're like, okay, two Sigma is investing.

584
00:35:48,480 --> 00:35:50,960
Speaker 1: We're pretty sure who's on the other side of this.

585
00:35:51,280 --> 00:35:54,080
Speaker 1: Maybe it's time for us to move on. So you

586
00:35:54,200 --> 00:35:57,680
Speaker 1: exit the business. That's what you're supposed to do. So

587
00:35:57,760 --> 00:36:00,560
Speaker 1: to your point, I think what happened here is they

588
00:36:00,560 --> 00:36:07,080
Speaker 1: had faster, more nimble, better equipped players like Winter, mut

589
00:36:07,760 --> 00:36:11,240
Speaker 1: like Jump, like Jane. They're all the model they stepped

590
00:36:11,239 --> 00:36:12,560
Speaker 1: in and again you can see this in the on

591
00:36:12,760 --> 00:36:15,759
Speaker 1: chain data. So where are the two billion dollars and

592
00:36:15,800 --> 00:36:18,719
Speaker 1: equity go? Here? Was part of what happened is it

593
00:36:18,760 --> 00:36:23,040
Speaker 1: went to their customers, which was ironic enough, certain customers,

594
00:36:23,520 --> 00:36:28,480
Speaker 1: the most sophisticated customers because they it's called the vig.

595
00:36:28,600 --> 00:36:29,960
Speaker 1: You know, where do you go for the vig? And

596
00:36:29,960 --> 00:36:34,279
Speaker 1: if you talk to traders internationally, sophisticated even smaller ones

597
00:36:34,320 --> 00:36:35,839
Speaker 1: by the way, don't have to be that large. I mean,

598
00:36:35,880 --> 00:36:39,160
Speaker 1: the VIG was attractive f t X. The same strategy

599
00:36:39,200 --> 00:36:41,440
Speaker 1: wouldn't work on coin base, but it will work on FPS.

600
00:36:41,560 --> 00:36:46,520
Speaker 1: Global because the quoting machine that did ask machine was broken.

601
00:36:46,719 --> 00:36:51,959
Speaker 1: It was spinning out stale prices, not the best prices.

602
00:36:52,000 --> 00:36:54,719
Speaker 1: So I think it was with the entrance of new

603
00:36:54,800 --> 00:36:57,680
Speaker 1: players that caused them to lose their edge and caused them,

604
00:36:57,800 --> 00:37:03,400
Speaker 1: you know, to to lose money. Okay, and okay, so

605
00:37:03,520 --> 00:37:06,359
Speaker 1: let's let's kind of fast forward a bit. Then let's

606
00:37:06,440 --> 00:37:08,880
Speaker 1: let's go because again, like I think, a lot of

607
00:37:08,880 --> 00:37:12,440
Speaker 1: the prevailing narrative up to now has been that, you know,

608
00:37:12,560 --> 00:37:16,319
Speaker 1: prior to kind of May this year, it feels it

609
00:37:16,360 --> 00:37:18,640
Speaker 1: feels such a long time ago, even though it's even

610
00:37:18,680 --> 00:37:21,319
Speaker 1: though it was only this year, it feels like years ago,

611
00:37:21,480 --> 00:37:24,560
Speaker 1: given given everything that's happened since. But obviously that the

612
00:37:24,680 --> 00:37:28,640
Speaker 1: prevailing narrative before before this was that everything was kind

613
00:37:28,680 --> 00:37:33,680
Speaker 1: of okay, and then terror happened, and you know this,

614
00:37:33,960 --> 00:37:37,560
Speaker 1: the market kind of goes into world that Ust and

615
00:37:37,880 --> 00:37:42,040
Speaker 1: Luna go into this death spiral and everyone starts hemorrhage

616
00:37:42,080 --> 00:37:45,320
Speaker 1: in cash. Everyone is, you know, everyone is taking huge losses.

617
00:37:46,000 --> 00:37:49,160
Speaker 1: And and then we see this contagion spread. We see

618
00:37:49,239 --> 00:37:52,080
Speaker 1: three arrows capital go down, and then we see the

619
00:37:52,160 --> 00:37:55,400
Speaker 1: likes of you know, these centralized lending and borrowing platforms

620
00:37:55,400 --> 00:37:58,200
Speaker 1: and likes of Celsius and Voyager and Blockfire and all

621
00:37:58,239 --> 00:38:02,680
Speaker 1: this go down, and then we have this extraordinary situation

622
00:38:03,480 --> 00:38:07,719
Speaker 1: whereby f t X and Alameda are kind of the

623
00:38:07,760 --> 00:38:10,640
Speaker 1: white Knights coming to the rescue and being like, okay, well,

624
00:38:10,680 --> 00:38:13,040
Speaker 1: you know, we'll, we'll buy we'll take you out of

625
00:38:13,400 --> 00:38:16,680
Speaker 1: you know, we'll we'll we'll give you an injection of liquidity?

626
00:38:16,760 --> 00:38:21,040
Speaker 1: Will you stave off bankruptcy? So what exactly was going

627
00:38:21,120 --> 00:38:24,640
Speaker 1: on there? Great ridge topics to go down? Actually, so

628
00:38:24,760 --> 00:38:29,200
Speaker 1: first off, one is what is the cause of the

629
00:38:29,200 --> 00:38:33,920
Speaker 1: decline and the systematic risk in crypto? Are I ever

630
00:38:33,960 --> 00:38:37,719
Speaker 1: get a different tweet thread that's actually not Luna. It

631
00:38:37,800 --> 00:38:41,839
Speaker 1: starts with the gray scale discount whining and the end

632
00:38:41,920 --> 00:38:45,799
Speaker 1: of the g BTC car track. We'll come back to

633
00:38:45,840 --> 00:38:48,640
Speaker 1: that in a moment if you'd like that. It's interesting

634
00:38:48,680 --> 00:38:54,000
Speaker 1: thread to go down. So then you know the second

635
00:38:54,080 --> 00:38:56,960
Speaker 1: round around concasions. Of course, you know you had pleasures

636
00:38:57,040 --> 00:39:01,280
Speaker 1: like Genesis and had impaired loans for two three rs capable,

637
00:39:01,480 --> 00:39:05,719
Speaker 1: which has caused a credit season and a testing of

638
00:39:06,040 --> 00:39:09,400
Speaker 1: various curies. Well let's look at you know this idea

639
00:39:09,440 --> 00:39:11,360
Speaker 1: of you know the three A C and and the

640
00:39:11,680 --> 00:39:15,360
Speaker 1: kind of Celsius route because I think that was again

641
00:39:15,440 --> 00:39:18,279
Speaker 1: something that affected I think has affected kind of you know,

642
00:39:18,320 --> 00:39:22,879
Speaker 1: your average crypto holder, perhaps more than what's been going on,

643
00:39:23,200 --> 00:39:26,200
Speaker 1: you know with Genesis and gray Scale, because obviously gray

644
00:39:26,239 --> 00:39:29,880
Speaker 1: scale in particular is an institutional vehicle, isn't it? Certain

645
00:39:29,880 --> 00:39:32,640
Speaker 1: points they're connecting in this way. So let's let's frame

646
00:39:32,680 --> 00:39:35,600
Speaker 1: it up. Do you have these non banks for tunity

647
00:39:35,640 --> 00:39:40,280
Speaker 1: b banks who do? I mean there, Celsius, Voyager, block Fire,

648
00:39:40,520 --> 00:39:43,160
Speaker 1: and they've all failed three for three. Now there's one

649
00:39:43,239 --> 00:39:46,239
Speaker 1: question is did they fail because of bad management bad

650
00:39:46,320 --> 00:39:48,880
Speaker 1: risk manager? And that's an areave out there, that's the

651
00:39:48,920 --> 00:39:52,120
Speaker 1: conventional wisdom. I'm saying no, no no, no, no, they failed

652
00:39:52,120 --> 00:39:56,400
Speaker 1: because of their business model. If you're a non bank cotmmunity,

653
00:39:56,440 --> 00:40:00,680
Speaker 1: a bank that ends in tears, why let me let

654
00:40:00,719 --> 00:40:05,040
Speaker 1: me lay this out here. What these actors were doing

655
00:40:05,080 --> 00:40:08,320
Speaker 1: is they were taking in the deposits deposit or funding

656
00:40:08,800 --> 00:40:12,239
Speaker 1: kind of advertising as a bank, or using these earned programs.

657
00:40:12,880 --> 00:40:15,759
Speaker 1: Then they were lending. And that's what banks do. You're

658
00:40:15,760 --> 00:40:19,080
Speaker 1: taking short term deposits and those deposits are liquid, I mean,

659
00:40:19,480 --> 00:40:21,680
Speaker 1: you can take your deposits out tomorrow or in a

660
00:40:21,680 --> 00:40:25,200
Speaker 1: short period of time. But then they're lending on assets.

661
00:40:25,360 --> 00:40:28,279
Speaker 1: One of those assets were those are loans to hedge funds.

662
00:40:28,280 --> 00:40:31,839
Speaker 1: So they're risky. First of all, they're making loans hege funds,

663
00:40:32,120 --> 00:40:37,680
Speaker 1: and those loans are ill liquid. There's no market for them.

664
00:40:37,719 --> 00:40:42,000
Speaker 1: It's not like lending a house of mortgage. A mortgage

665
00:40:42,480 --> 00:40:45,319
Speaker 1: as actually living market for mortgages. Fanny name Freddy mac

666
00:40:45,360 --> 00:40:50,400
Speaker 1: buy them, right. So what happens here borrowing. They're borrowing

667
00:40:50,480 --> 00:40:54,279
Speaker 1: from short term depositors paying out a lower interest a

668
00:40:54,400 --> 00:40:56,919
Speaker 1: percent to percent and hey days to be obviously more.

669
00:40:57,360 --> 00:40:59,920
Speaker 1: They lend up to these hetch funds that are paying

670
00:41:00,320 --> 00:41:04,960
Speaker 1: five seven eight, and they're trying to capture that spread

671
00:41:06,080 --> 00:41:08,799
Speaker 1: like we call that an interest marginment bank. The thing

672
00:41:08,920 --> 00:41:13,400
Speaker 1: is the bank is protected from a bank run because

673
00:41:13,440 --> 00:41:17,319
Speaker 1: of two things. One, they have deposit insurance in the

674
00:41:17,560 --> 00:41:19,800
Speaker 1: in the form of the f d I C. F

675
00:41:19,960 --> 00:41:23,200
Speaker 1: d i C says I'll protect your deposits up to tars,

676
00:41:23,760 --> 00:41:27,319
Speaker 1: so people are secure in depositing at their bank. As

677
00:41:27,400 --> 00:41:29,400
Speaker 1: much as we hate the banks, they still like depositing

678
00:41:29,440 --> 00:41:33,120
Speaker 1: at the bank, right. That's one. The second thing is

679
00:41:33,160 --> 00:41:35,759
Speaker 1: I got a lender of last resort, which is the

680
00:41:35,760 --> 00:41:39,919
Speaker 1: Federal reserve. So if you get in a bank run,

681
00:41:40,080 --> 00:41:42,440
Speaker 1: what the bank can do is they can take their

682
00:41:42,480 --> 00:41:46,879
Speaker 1: assets which are illequate and they can pledge those. That's

683
00:41:46,920 --> 00:41:49,080
Speaker 1: a certain eligible assets, I should say to be clear,

684
00:41:49,120 --> 00:41:52,040
Speaker 1: they can pledge those. That's the federal reserve and the

685
00:41:52,080 --> 00:41:55,760
Speaker 1: federal reserve. We're gonna liquidity cash to meet the demands

686
00:41:55,760 --> 00:41:59,479
Speaker 1: of depositors. Now, Paul, back in two eight, we saw

687
00:41:59,480 --> 00:42:01,120
Speaker 1: this thing half in there to you remember, a general

688
00:42:01,120 --> 00:42:03,399
Speaker 1: electric ge can bomba herd out a little bit here.

689
00:42:03,920 --> 00:42:07,920
Speaker 1: G E Capital was borrowing in these short term commercial

690
00:42:07,960 --> 00:42:12,720
Speaker 1: paper because commercial papers seven seven day loan on average

691
00:42:12,719 --> 00:42:17,840
Speaker 1: seven day loan. It's just a corporate borrowing market, so

692
00:42:18,000 --> 00:42:21,120
Speaker 1: borrowing there, and they're making these longer term loans. But

693
00:42:21,200 --> 00:42:24,000
Speaker 1: what happens is if those investors in that commercial paper,

694
00:42:24,000 --> 00:42:28,240
Speaker 1: those depositors, if they don't keep stepping on every seven

695
00:42:28,320 --> 00:42:33,640
Speaker 1: days and rolling over that investment, then they can't fund

696
00:42:33,680 --> 00:42:38,760
Speaker 1: these loans which have a longer duration of one of three, five, seven,

697
00:42:38,800 --> 00:42:42,000
Speaker 1: whatever it is, and they can't sell those loans that

698
00:42:42,040 --> 00:42:44,279
Speaker 1: they're making because it's not liquidity. And if they have

699
00:42:44,440 --> 00:42:47,480
Speaker 1: this se the loan and somehow they can magic this

700
00:42:47,600 --> 00:42:50,600
Speaker 1: of the loan. They're selling that loan at a much

701
00:42:50,680 --> 00:42:55,920
Speaker 1: lower price than the face value belan, and that creates

702
00:42:56,560 --> 00:43:01,120
Speaker 1: what's called that impairment. That impairment eats into the equity

703
00:43:01,280 --> 00:43:04,880
Speaker 1: ballot and valor, and it creates the risk of insolvency.

704
00:43:05,239 --> 00:43:08,080
Speaker 1: So that's what happened with Celsius, block Fire and Voyager.

705
00:43:08,520 --> 00:43:11,600
Speaker 1: It's not a managing thing, although there were management deficiencies

706
00:43:12,000 --> 00:43:17,320
Speaker 1: absolutely and lousy risking management, yes, overriding you know the

707
00:43:17,440 --> 00:43:20,960
Speaker 1: forms article that came out well this yesterday. However, it's

708
00:43:21,000 --> 00:43:24,960
Speaker 1: broader than that. It's a business model issue. Only banks

709
00:43:25,040 --> 00:43:28,040
Speaker 1: by the United States aren't permitted to. It's called we hyperificate.

710
00:43:28,160 --> 00:43:33,480
Speaker 1: We hyproplicate is the technical term for taking your customer

711
00:43:33,520 --> 00:43:36,880
Speaker 1: funds and then lend them out term an authority and

712
00:43:37,160 --> 00:43:39,160
Speaker 1: do that unless you're a bank in the United States.

713
00:43:39,160 --> 00:43:41,400
Speaker 1: This is why Block five a hundrellion dollar five from

714
00:43:41,440 --> 00:43:46,200
Speaker 1: the SEC. They said, hey, blocks by, you're you're not

715
00:43:46,320 --> 00:43:49,040
Speaker 1: a bank. You've got this part that pays out yield.

716
00:43:49,200 --> 00:43:51,359
Speaker 1: So if you're not the only banks can pay out

717
00:43:51,360 --> 00:43:54,680
Speaker 1: deposit deposit interest rate. So if you're not a bank,

718
00:43:54,680 --> 00:43:58,000
Speaker 1: then that must be security. That's how they analyze it,

719
00:43:58,080 --> 00:44:03,040
Speaker 1: but that security is not registered with the SEC and

720
00:44:03,200 --> 00:44:05,400
Speaker 1: therefore here's a high million dollar fine. And see some

721
00:44:05,520 --> 00:44:09,960
Speaker 1: assist that, right, yah, yeah, And of course I mean

722
00:44:10,040 --> 00:44:12,520
Speaker 1: these you know, Celsius in particular is the one that

723
00:44:12,560 --> 00:44:14,279
Speaker 1: comes to mind. But I mean these guys, you know,

724
00:44:14,320 --> 00:44:18,640
Speaker 1: they explicitly and advertise themselves as as not being banks.

725
00:44:19,000 --> 00:44:20,800
Speaker 1: You know, I'm bank yourself. That was the That was

726
00:44:20,840 --> 00:44:23,040
Speaker 1: the Celsius one that you know, that's what Alex Maszinski

727
00:44:23,120 --> 00:44:26,080
Speaker 1: had to have on his on his T shirt. But

728
00:44:26,680 --> 00:44:29,680
Speaker 1: all the while sort of not being you know, saying

729
00:44:29,719 --> 00:44:33,000
Speaker 1: that they're not banks, but trying to actually act like

730
00:44:33,080 --> 00:44:36,920
Speaker 1: banks even though they're not allowed to do that. They

731
00:44:36,920 --> 00:44:41,120
Speaker 1: are breaking the law. I'm disappointed that Alex Mashinsky, in

732
00:44:41,120 --> 00:44:44,560
Speaker 1: my opinion, hasn't been indicted, and that's unfortunate. And by

733
00:44:44,560 --> 00:44:46,400
Speaker 1: the way, I was the last person to get a

734
00:44:46,400 --> 00:44:50,080
Speaker 1: panel with Alex in late May, and I called out

735
00:44:50,120 --> 00:44:51,879
Speaker 1: some of these issues and threatened to throw me off

736
00:44:51,880 --> 00:44:55,319
Speaker 1: stage when there's a writer broad so and that was

737
00:44:55,400 --> 00:44:58,080
Speaker 1: uncomfortable before these players blew up. So here's a guy

738
00:44:58,080 --> 00:45:03,480
Speaker 1: with a million people on Twitter, and it's not pleasant,

739
00:45:04,360 --> 00:45:08,000
Speaker 1: but you're right, look there they're my opinion, I say

740
00:45:08,040 --> 00:45:11,879
Speaker 1: my opinions, I don't want a definition case is that

741
00:45:12,680 --> 00:45:15,439
Speaker 1: they were breaking the law. And and do you think,

742
00:45:15,480 --> 00:45:18,160
Speaker 1: I mean, you know, whether whether they were breaking the

743
00:45:18,239 --> 00:45:20,040
Speaker 1: law or not. As you say, this is you know,

744
00:45:20,480 --> 00:45:23,720
Speaker 1: primarily a failure of a business model. You know, Celsius

745
00:45:23,800 --> 00:45:26,120
Speaker 1: Voyager and block Fire, by the sound of it, were

746
00:45:26,800 --> 00:45:29,720
Speaker 1: We're never really going to We're never really going to work,

747
00:45:29,760 --> 00:45:33,120
Speaker 1: even if they were being run properly behind the scenes.

748
00:45:34,200 --> 00:45:36,640
Speaker 1: This you know, this, this is a this is a

749
00:45:36,719 --> 00:45:39,680
Speaker 1: gravy train that could only run for so long. That's right,

750
00:45:39,719 --> 00:45:43,440
Speaker 1: that's right. Ultimately, you're having process of the crop confidence,

751
00:45:43,600 --> 00:45:46,640
Speaker 1: and people will want to know, are my fund secure?

752
00:45:47,520 --> 00:45:52,480
Speaker 1: Is my savings secure? When savings people don't expect principle loss,

753
00:45:53,440 --> 00:45:57,359
Speaker 1: they want safety. And what happens is when those are

754
00:45:57,360 --> 00:45:59,560
Speaker 1: prices of the confidence, people want to test that and

755
00:45:59,600 --> 00:46:02,600
Speaker 1: they say, know, I'm gonna take my funds back, and

756
00:46:02,640 --> 00:46:06,200
Speaker 1: then they start experience experiencing issues that have gotten If

757
00:46:06,200 --> 00:46:09,320
Speaker 1: yourself sis, you've gotta sell an asset to create liquidity,

758
00:46:09,360 --> 00:46:12,719
Speaker 1: but again those assets aren't in the liquid market, and

759
00:46:12,800 --> 00:46:15,239
Speaker 1: to create a putt, you've got a semite discommute, which

760
00:46:15,360 --> 00:46:18,319
Speaker 1: forces a loss upon them. But you right, it's fundamentally

761
00:46:18,440 --> 00:46:21,880
Speaker 1: a business model issue, which is another wonderful army of crypto,

762
00:46:21,920 --> 00:46:26,960
Speaker 1: which is that crypto trust still matters in a trustless world.

763
00:46:27,760 --> 00:46:30,719
Speaker 1: Cryptospremous on trustlessness. I'm sympathetic to that. I wrote a

764
00:46:30,760 --> 00:46:34,000
Speaker 1: Wall Street Journal op ed in October with former SEC

765
00:46:34,160 --> 00:46:39,239
Speaker 1: chair author Levitt espousing the the ability of Crypto two

766
00:46:39,360 --> 00:46:43,880
Speaker 1: for the first time enable transactions without intermediaries like banks

767
00:46:43,920 --> 00:46:47,400
Speaker 1: or exchanges. That's phenomenal technologies never existed before human history.

768
00:46:47,680 --> 00:46:51,240
Speaker 1: It's like a civilization upgrade that we can transact without

769
00:46:51,239 --> 00:46:56,040
Speaker 1: a trusted party metal. However, the full crypto staff isn't

770
00:46:56,080 --> 00:47:01,640
Speaker 1: decentralized yet, so you have thrust for requirements at different points,

771
00:47:02,320 --> 00:47:06,560
Speaker 1: namely the on rep key point. However, you get your

772
00:47:06,600 --> 00:47:09,400
Speaker 1: own new crypto, you gotta wire a c H funds

773
00:47:09,440 --> 00:47:12,600
Speaker 1: to some party that you need to trust. It could

774
00:47:12,640 --> 00:47:14,839
Speaker 1: be a trust bank, it could be exchanged, a coin base,

775
00:47:15,000 --> 00:47:16,880
Speaker 1: or in this case could be an ft X or

776
00:47:16,880 --> 00:47:20,279
Speaker 1: a celsius. That's and there are other elements that are

777
00:47:20,320 --> 00:47:23,360
Speaker 1: not decentralized. So we're not yet ready for a full

778
00:47:23,400 --> 00:47:26,640
Speaker 1: web three world. We're not there yet. So what do

779
00:47:26,680 --> 00:47:28,520
Speaker 1: you need? You need a web two point five world.

780
00:47:28,560 --> 00:47:32,960
Speaker 1: You need a world where you have trusted institutions that

781
00:47:33,040 --> 00:47:36,600
Speaker 1: are well capitalized, to have liquidity, that to look reporting

782
00:47:36,680 --> 00:47:41,040
Speaker 1: and yes, put the assets and the liabilities on chain

783
00:47:41,560 --> 00:47:48,240
Speaker 1: in real time with third party audits and controls. That's

784
00:47:48,280 --> 00:47:51,440
Speaker 1: that's the world we need to move towards on the

785
00:47:51,640 --> 00:47:56,480
Speaker 1: journey towards a greater world of decentralization and economic sovereigntain

786
00:47:56,560 --> 00:48:01,400
Speaker 1: human freedom. Because it's seen that you know, it seems

787
00:48:01,400 --> 00:48:04,799
Speaker 1: that we've kind of fallen victim I guess too well.

788
00:48:04,800 --> 00:48:07,560
Speaker 1: Opportunism on the one hand, you know, we've had these

789
00:48:07,640 --> 00:48:11,320
Speaker 1: you know, we've had these services like Celsius Voyager in

790
00:48:11,360 --> 00:48:13,800
Speaker 1: block fire, you know, and also like f t X

791
00:48:13,880 --> 00:48:17,840
Speaker 1: and Alameda come in and exploit the fact that the

792
00:48:17,960 --> 00:48:20,839
Speaker 1: crypto is a young market, that crypto doesn't have these

793
00:48:20,880 --> 00:48:24,000
Speaker 1: sort of you know, these protections that that banks have

794
00:48:24,880 --> 00:48:28,000
Speaker 1: and kind of take advantage of that offer people offer

795
00:48:28,040 --> 00:48:30,880
Speaker 1: people high yield, you know, offer people, you know, what

796
00:48:30,960 --> 00:48:34,080
Speaker 1: they can't what they can't get anywhere else. So there's

797
00:48:34,120 --> 00:48:36,959
Speaker 1: the opportunism from these players on the one hand, and

798
00:48:37,160 --> 00:48:40,239
Speaker 1: obviously when the tide goes out, they get you know,

799
00:48:40,640 --> 00:48:43,919
Speaker 1: we see we see just how opportunistic they were being.

800
00:48:44,760 --> 00:48:47,560
Speaker 1: But of course, on the other hand, that opportunism can't

801
00:48:47,600 --> 00:48:51,439
Speaker 1: flourish if if there are if there are regulations, if

802
00:48:51,560 --> 00:48:57,280
Speaker 1: if there are procedures safeguards in place, like the banking

803
00:48:57,320 --> 00:48:59,520
Speaker 1: industry has. And as you say, rom, I mean we

804
00:48:59,680 --> 00:49:02,880
Speaker 1: you know, we're us in crypto, we're very you know,

805
00:49:03,040 --> 00:49:05,160
Speaker 1: we look down on banks, were very rude about them

806
00:49:05,160 --> 00:49:08,680
Speaker 1: and stuff. But I mean the banking industry, I guess

807
00:49:08,880 --> 00:49:10,960
Speaker 1: has you know, you have this to say for it has?

808
00:49:11,120 --> 00:49:13,080
Speaker 1: It has a lot of it has many you know,

809
00:49:13,200 --> 00:49:16,800
Speaker 1: many decades, many centuries behind it of you know, of

810
00:49:17,200 --> 00:49:20,560
Speaker 1: innovation and these things, and you know experience, I guess,

811
00:49:20,719 --> 00:49:23,799
Speaker 1: And and these protections are kind of a hard one

812
00:49:23,880 --> 00:49:27,200
Speaker 1: because I guess you know, the banking sector went through

813
00:49:27,239 --> 00:49:31,000
Speaker 1: these sorts of convulsions many years ago and and came

814
00:49:31,040 --> 00:49:34,920
Speaker 1: out the better for it. Yes, you're absolutely right. You

815
00:49:34,920 --> 00:49:37,440
Speaker 1: know two things. First off, defied has where want to

816
00:49:37,440 --> 00:49:39,480
Speaker 1: be clear on that. And I see the promise and potential.

817
00:49:39,520 --> 00:49:43,319
Speaker 1: Off it's a shame that these institutional lenders weren't using

818
00:49:43,440 --> 00:49:46,719
Speaker 1: defy to manage their risk. I've seeing lava and the

819
00:49:46,760 --> 00:49:48,640
Speaker 1: reasons why that happened, we don't spent too much time

820
00:49:48,640 --> 00:49:53,239
Speaker 1: around that because Defy International wasn't ready for institutions, ready

821
00:49:53,280 --> 00:49:56,560
Speaker 1: for the retail through these stapts, right, ne ap need

822
00:49:56,600 --> 00:49:58,520
Speaker 1: a lot of other things get institutional already, and some

823
00:49:58,560 --> 00:50:00,919
Speaker 1: of used to go build that would be a really

824
00:50:00,920 --> 00:50:04,320
Speaker 1: exciting product. But to your point, in the nineteenth century,

825
00:50:05,000 --> 00:50:09,680
Speaker 1: bank blow ups and failures happen every recession. Every eight

826
00:50:09,680 --> 00:50:12,800
Speaker 1: to ten years, you see scores of banks go bankrupt.

827
00:50:13,640 --> 00:50:16,640
Speaker 1: And in the Great Depression, you know, it's not been

828
00:50:16,960 --> 00:50:19,320
Speaker 1: really the last ten, fifteen, twenty years people have discoversed.

829
00:50:19,320 --> 00:50:23,040
Speaker 1: Bernky won a Nobel prize for really coffrecting the history.

830
00:50:23,120 --> 00:50:25,680
Speaker 1: It wasn't the collapse of nine stock market at the

831
00:50:25,719 --> 00:50:30,600
Speaker 1: start of the depression. It wasn't uh, the erection trade bear.

832
00:50:30,719 --> 00:50:32,320
Speaker 1: It's not it. This is what we learned in school

833
00:50:32,320 --> 00:50:38,040
Speaker 1: growing up. Right. What it was is the bank failure.

834
00:50:38,160 --> 00:50:42,879
Speaker 1: The Federal Reserve let a major bank fail, and that

835
00:50:42,920 --> 00:50:45,719
Speaker 1: caused a crisis of confidence and people lost confidence in

836
00:50:45,719 --> 00:50:49,239
Speaker 1: the banking system. People through their funds and the same

837
00:50:49,280 --> 00:50:54,280
Speaker 1: situation they have these long term liquid assets, they cannot

838
00:50:54,400 --> 00:50:57,920
Speaker 1: deliver the change that the depositors thought was safe. And

839
00:50:57,960 --> 00:51:00,759
Speaker 1: the rest of history. But we've learned from that as

840
00:51:00,800 --> 00:51:05,279
Speaker 1: a species. Don't let the banks fail. Don't let the

841
00:51:05,280 --> 00:51:07,760
Speaker 1: banks fail. Make sure it's a line in the last resort.

842
00:51:07,880 --> 00:51:11,480
Speaker 1: Have deposit insurance, and yes, have oversight and control. It's

843
00:51:11,480 --> 00:51:14,840
Speaker 1: not easy being a bank. You can't start a bank tomorrow.

844
00:51:15,840 --> 00:51:18,160
Speaker 1: It's multiple years. You have to have capital, have to

845
00:51:18,160 --> 00:51:22,040
Speaker 1: have oversight. You have visits from the FBI, c in

846
00:51:22,040 --> 00:51:24,120
Speaker 1: the Federal Reserve. They can look at your books whenever

847
00:51:24,160 --> 00:51:29,080
Speaker 1: you want. They can examine the camp out on your offices. Meanwhile,

848
00:51:29,440 --> 00:51:32,080
Speaker 1: these exchanges are very lightly regulate. The regulator is like

849
00:51:32,280 --> 00:51:34,880
Speaker 1: money services business or money transmission business, which is the

850
00:51:34,960 --> 00:51:39,319
Speaker 1: same standard of regulation as a as like a check

851
00:51:39,400 --> 00:51:42,200
Speaker 1: casher on the corner and the low incremati, by the way,

852
00:51:42,280 --> 00:51:44,160
Speaker 1: or like the if you go to the airport, you know,

853
00:51:44,200 --> 00:51:47,440
Speaker 1: like when you trade, when you exchange money, that's a

854
00:51:47,520 --> 00:51:52,359
Speaker 1: money service of business. Exchanges even in the US are

855
00:51:52,400 --> 00:51:55,680
Speaker 1: regularly at that level, by the way, at that level, okay,

856
00:51:55,760 --> 00:52:00,360
Speaker 1: let's go. However, some adopt a higher level of reggio lation,

857
00:52:01,560 --> 00:52:04,719
Speaker 1: like Anchorage is regularly like a trust bank or paxes

858
00:52:04,840 --> 00:52:08,759
Speaker 1: regularly a trust bank, and that means they have to

859
00:52:10,080 --> 00:52:13,040
Speaker 1: uh they're subject to you you, and they're embracing a much

860
00:52:13,160 --> 00:52:18,960
Speaker 1: higher standard of control, supervision, regulation, capital, et cetera. The

861
00:52:19,320 --> 00:52:22,839
Speaker 1: penalties of breaking the laws of bank are severe, are

862
00:52:22,920 --> 00:52:27,359
Speaker 1: very severe, not just management expulsion. They can kick away

863
00:52:27,400 --> 00:52:30,440
Speaker 1: your charter, they can take away your right to do banking,

864
00:52:31,120 --> 00:52:34,880
Speaker 1: civil penalties and if you if you break sanctions law,

865
00:52:35,000 --> 00:52:39,680
Speaker 1: criminal penalties. But on the flip side, that fates trust.

866
00:52:40,280 --> 00:52:42,360
Speaker 1: So you know, we still use banks and much we

867
00:52:42,360 --> 00:52:45,080
Speaker 1: hate that. Yeah, there is there is that trust, there

868
00:52:45,160 --> 00:52:47,400
Speaker 1: isn't it. And I mean, I guess yeah, as you

869
00:52:47,520 --> 00:52:50,239
Speaker 1: as you point out that the bitter irony of all

870
00:52:50,280 --> 00:52:53,600
Speaker 1: this is that crypto is was invented with this idea

871
00:52:53,640 --> 00:52:57,840
Speaker 1: of trustlessness in mind. And yet we've we've allowed these

872
00:52:58,000 --> 00:53:02,200
Speaker 1: we've allowed these opportunists to in and and you know,

873
00:53:02,320 --> 00:53:05,480
Speaker 1: let ourselves trust them because you know they are I

874
00:53:05,520 --> 00:53:07,640
Speaker 1: guess because in a way they make it easy. You

875
00:53:07,680 --> 00:53:10,400
Speaker 1: talk about, you know, you talk about the difficulties of

876
00:53:10,400 --> 00:53:13,680
Speaker 1: of getting you know, of getting money into crypto and

877
00:53:13,680 --> 00:53:15,719
Speaker 1: and storing it and all this sort of stuff, and

878
00:53:15,719 --> 00:53:18,239
Speaker 1: I guess these guys, these guys kind of fit the

879
00:53:18,239 --> 00:53:20,279
Speaker 1: bill in that in that sort of respect, didn't they

880
00:53:20,280 --> 00:53:22,799
Speaker 1: And they made it very made them very easy to use,

881
00:53:23,400 --> 00:53:27,319
Speaker 1: whereas Defy. You know, defy is is complicated, defy is

882
00:53:27,360 --> 00:53:30,799
Speaker 1: still is still hard. The average person doesn't want to

883
00:53:30,800 --> 00:53:34,320
Speaker 1: touch that yet. You know you had these the c

884
00:53:34,560 --> 00:53:37,160
Speaker 1: fire players go, hey, you know this is easy. This

885
00:53:37,280 --> 00:53:40,160
Speaker 1: looks just like this looks just like your bank's website.

886
00:53:40,320 --> 00:53:48,480
Speaker 1: Nothing nothing to worry about here. Yeah, I know, exactly right. Okay,

887
00:53:49,320 --> 00:53:52,399
Speaker 1: I think defy has extraordinary potential. I'm really excited about

888
00:53:52,440 --> 00:53:54,279
Speaker 1: what we can do with DeFi I think can strengthen

889
00:53:54,360 --> 00:53:56,560
Speaker 1: the banks and strengthens on my get so you can

890
00:53:56,560 --> 00:54:00,360
Speaker 1: avoid two doesn't support not ready. Yeah, we vest one

891
00:54:00,920 --> 00:54:04,240
Speaker 1: and you write people of value. Convenience over security happens

892
00:54:04,239 --> 00:54:07,600
Speaker 1: all the time. It happens all the time. Why do

893
00:54:07,680 --> 00:54:09,960
Speaker 1: we like the microwave. It's not because it makes great chicken.

894
00:54:10,000 --> 00:54:13,279
Speaker 1: It's because it's fast and easy to use, right, the

895
00:54:13,600 --> 00:54:18,359
Speaker 1: same reason why people don't want to memorize a sea

896
00:54:18,400 --> 00:54:23,000
Speaker 1: phrase or have to interact with their hardware wallet. The

897
00:54:23,080 --> 00:54:25,600
Speaker 1: normy population, which is the bulk of the world. If

898
00:54:25,600 --> 00:54:28,000
Speaker 1: you want to if you want to cannot crypto. If

899
00:54:28,000 --> 00:54:31,799
Speaker 1: you want to bring crypto the next level, it's not

900
00:54:31,840 --> 00:54:34,640
Speaker 1: going to be through teaching ember one. How to use

901
00:54:34,960 --> 00:54:39,440
Speaker 1: my grammar is not gonna use the hardware. It's going

902
00:54:39,480 --> 00:54:43,400
Speaker 1: to be through channels that they understand and relate to,

903
00:54:44,080 --> 00:54:46,319
Speaker 1: that are easy to acce, that highly usable, where they

904
00:54:46,320 --> 00:54:50,759
Speaker 1: against service and it goes back to the trust. It

905
00:54:50,760 --> 00:54:53,399
Speaker 1: will be familiar in the same way. No one talks

906
00:54:53,400 --> 00:54:55,280
Speaker 1: about t C P, I P. It's all in the background,

907
00:54:55,320 --> 00:54:59,040
Speaker 1: but it's using every Internet unction and data transelection in

908
00:54:59,040 --> 00:55:03,719
Speaker 1: the same way when the door cheese, it's success on.

909
00:55:04,239 --> 00:55:06,680
Speaker 1: It's only something in the background. Our starts will be

910
00:55:06,800 --> 00:55:09,919
Speaker 1: tokens and chin. Let's say, money will be unshained. Money

911
00:55:09,960 --> 00:55:11,719
Speaker 1: is already actually in a card to stable coin. There's

912
00:55:11,719 --> 00:55:14,360
Speaker 1: more ado around there, and there's yeah, there's there's just

913
00:55:14,600 --> 00:55:17,120
Speaker 1: there's so much building still to be done, isn't there.

914
00:55:17,160 --> 00:55:19,960
Speaker 1: There's there's so much you know, this stuff kind of

915
00:55:20,000 --> 00:55:23,560
Speaker 1: talking in a similar way rounds similar to what to

916
00:55:23,680 --> 00:55:25,600
Speaker 1: what you do? You know, what you guys do and

917
00:55:25,640 --> 00:55:27,680
Speaker 1: what you've done through a lot of your career is,

918
00:55:28,040 --> 00:55:30,719
Speaker 1: as you say, kind of providing these you know, these

919
00:55:30,719 --> 00:55:33,000
Speaker 1: gears behind the scenes, kind of greasing the wheels behind

920
00:55:33,040 --> 00:55:35,680
Speaker 1: the scenes. You know, people don't really people don't really

921
00:55:35,760 --> 00:55:38,600
Speaker 1: know what you know, what happens, but they don't care.

922
00:55:38,680 --> 00:55:40,640
Speaker 1: They just want it to be. They want it to

923
00:55:40,640 --> 00:55:43,399
Speaker 1: be a seamless experience. They want to know that they're

924
00:55:43,400 --> 00:55:46,000
Speaker 1: not going to you know, that their deposits are covered.

925
00:55:46,000 --> 00:55:47,640
Speaker 1: Then they want to know that it's not going to

926
00:55:47,800 --> 00:55:51,560
Speaker 1: all disappear tomorrow. And I guess until Krypto can offer

927
00:55:52,400 --> 00:55:55,200
Speaker 1: those sorts of guarantees, it's going to be it's going

928
00:55:55,280 --> 00:55:57,600
Speaker 1: to be a hard sell for for the average person.

929
00:55:57,960 --> 00:56:00,640
Speaker 1: The challenges ahead. I agree. I think I think you

930
00:56:00,680 --> 00:56:02,319
Speaker 1: said it well. I think you said, well, like you

931
00:56:02,360 --> 00:56:07,160
Speaker 1: need investment in infrastructure, you also need better policy and

932
00:56:08,160 --> 00:56:10,920
Speaker 1: more education out there, and so over the same lessons.

933
00:56:11,160 --> 00:56:15,000
Speaker 1: Every cycle comes back to the same components. But I'd

934
00:56:15,000 --> 00:56:17,839
Speaker 1: also say like that, you know, crypto DeFi right now

935
00:56:17,840 --> 00:56:20,560
Speaker 1: doesn't offer much field for reasons we know. So it's

936
00:56:20,600 --> 00:56:24,760
Speaker 1: it's hard to currently grow the ecosystem and giving exactly

937
00:56:24,760 --> 00:56:26,759
Speaker 1: what we said getting it, But there are there are

938
00:56:26,760 --> 00:56:30,560
Speaker 1: other ways, like dislocations do you create opportunities? Right? So,

939
00:56:30,800 --> 00:56:34,000
Speaker 1: and this is not financial advice. Went through your own

940
00:56:34,040 --> 00:56:37,680
Speaker 1: analysis on this, right, guys smirking, because whenever someone says

941
00:56:37,680 --> 00:56:39,760
Speaker 1: not financial advice, you know they're about the diffinancial advice

942
00:56:39,800 --> 00:56:41,759
Speaker 1: than this is truly not financial advice, but just you know,

943
00:56:41,800 --> 00:56:46,040
Speaker 1: dislocations and rising the rates have been when votively goes up.

944
00:56:46,160 --> 00:56:49,000
Speaker 1: For instance, there's a coin base about and adding with

945
00:56:49,080 --> 00:56:50,279
Speaker 1: that's just in a few weeks. You want to do

946
00:56:50,320 --> 00:56:54,600
Speaker 1: analys on it, but it's it's treating like sixty cents

947
00:56:54,600 --> 00:56:57,640
Speaker 1: on the dollar and now it's got a twelve percent

948
00:56:57,880 --> 00:57:01,000
Speaker 1: coop on or interest. Great, so you buy that bond

949
00:57:01,680 --> 00:57:05,440
Speaker 1: and that bond short curation meaning it will pay back

950
00:57:05,440 --> 00:57:08,239
Speaker 1: as principle in the next couple of years, and that

951
00:57:08,320 --> 00:57:11,839
Speaker 1: bond will go from sixty cents to a dollar provided

952
00:57:11,920 --> 00:57:16,280
Speaker 1: that coin based deliver as its scheduled principle and interest payments.

953
00:57:16,480 --> 00:57:18,200
Speaker 1: And they've got five billion dollars in cash on the

954
00:57:18,200 --> 00:57:21,920
Speaker 1: balance sheet and it's paying off talks and interest is

955
00:57:21,960 --> 00:57:27,000
Speaker 1: better than what you get on these other platforms. And

956
00:57:27,000 --> 00:57:31,640
Speaker 1: that's legal, it's compliant. So you know there are opportunities

957
00:57:31,720 --> 00:57:35,680
Speaker 1: out there. I'd say again, talk to a an advisor.

958
00:57:35,840 --> 00:57:38,120
Speaker 1: I think that knows what they're doing. You know, we

959
00:57:38,160 --> 00:57:40,760
Speaker 1: work with crypto Wales, that's our area of expert piece.

960
00:57:41,080 --> 00:57:43,640
Speaker 1: So happy to have a conversation around the shoots an

961
00:57:43,640 --> 00:57:46,640
Speaker 1: email and happy to have, but there are other opportunities

962
00:57:46,920 --> 00:57:49,200
Speaker 1: like that in the market that are emerging because of

963
00:57:49,240 --> 00:57:53,720
Speaker 1: these dislocations. And it's interesting that you that you that

964
00:57:53,800 --> 00:57:56,520
Speaker 1: you cite coin based there run because obviously coin based

965
00:57:56,760 --> 00:57:59,520
Speaker 1: US based exchange, it has had to jump through so

966
00:57:59,640 --> 00:58:03,720
Speaker 1: many regulatory hoops. I mean, I take your point about

967
00:58:03,760 --> 00:58:06,080
Speaker 1: the fact that it's you know, it's still not as regular,

968
00:58:06,160 --> 00:58:09,320
Speaker 1: not nearly as regulated as a bankers or anything like that.

969
00:58:09,400 --> 00:58:12,320
Speaker 1: But you know, as as crypto exchanges go, the likes

970
00:58:12,360 --> 00:58:16,000
Speaker 1: of coin base and crack and Gemini, you know, these

971
00:58:16,120 --> 00:58:19,200
Speaker 1: US these exchanges that are you know, based in the

972
00:58:19,200 --> 00:58:23,320
Speaker 1: mainland United States, they have they have gone through a

973
00:58:23,360 --> 00:58:26,480
Speaker 1: lot more of the regulatory procedures than than a lot

974
00:58:26,560 --> 00:58:29,680
Speaker 1: of others have and have been kind of criticized for

975
00:58:29,760 --> 00:58:31,720
Speaker 1: it in the past. You know, they've had to charge

976
00:58:31,800 --> 00:58:34,760
Speaker 1: higher fees and things like that, and you know, maybe

977
00:58:34,800 --> 00:58:37,360
Speaker 1: haven't been able to offer the same you know, the

978
00:58:37,360 --> 00:58:39,600
Speaker 1: same kind of services or the same kind of alk

979
00:58:39,640 --> 00:58:42,280
Speaker 1: coins and things like that that other exchanges you know

980
00:58:42,320 --> 00:58:44,840
Speaker 1: that haven't been as compliant, you know, have they've been

981
00:58:44,880 --> 00:58:48,080
Speaker 1: able to be more nimble, um, But this really shows

982
00:58:48,160 --> 00:58:52,440
Speaker 1: that perhaps you know that that these policy the this,

983
00:58:52,440 --> 00:58:55,520
Speaker 1: this going down, this going down, the you know the

984
00:58:55,560 --> 00:58:58,760
Speaker 1: proper channels to do it properly, may well may well

985
00:58:58,800 --> 00:59:02,600
Speaker 1: be paying off. I think it's a good I think

986
00:59:02,600 --> 00:59:05,680
Speaker 1: it's a good conclusion. You look, trust all matters in

987
00:59:05,680 --> 00:59:09,800
Speaker 1: the trust. This world need players that are compliant and

988
00:59:10,000 --> 00:59:12,880
Speaker 1: playing the long game, that are leading with trust and integrity.

989
00:59:12,920 --> 00:59:16,040
Speaker 1: I would never have it's so surprising to say that

990
00:59:16,080 --> 00:59:20,960
Speaker 1: a differentiator in trypto is that this player conducts themselves

991
00:59:20,960 --> 00:59:26,680
Speaker 1: with integrity. In any other industry, that's the assumption that

992
00:59:26,760 --> 00:59:30,920
Speaker 1: they conduct themselves with integrity. Right, You really can't make

993
00:59:30,960 --> 00:59:34,920
Speaker 1: this up. And here in crypto were saying, well, coin

994
00:59:35,000 --> 00:59:40,880
Speaker 1: based leads with integrity, but players and embrace regulations is

995
00:59:40,880 --> 00:59:43,760
Speaker 1: where you wanta is where you want to focus. Specifically,

996
00:59:44,480 --> 00:59:48,360
Speaker 1: look for trust to banks because trust banks have the

997
00:59:48,520 --> 00:59:52,120
Speaker 1: highest standard, the only standard with a few standards. Fair

998
00:59:52,280 --> 00:59:54,080
Speaker 1: that these are subtle points, but want to be like

999
00:59:54,120 --> 00:59:56,560
Speaker 1: a full service bank, a full service bank, a trust

1000
00:59:56,560 --> 01:00:00,600
Speaker 1: bank doesn't necessarily have f d I C. Super Trust

1001
01:00:00,640 --> 01:00:08,160
Speaker 1: banks have significant controls and a third parties and audit

1002
01:00:08,280 --> 01:00:12,240
Speaker 1: firms protect against fraud, and multiple parties at the bank

1003
01:00:12,720 --> 01:00:17,360
Speaker 1: with different roles and responsibilities protect against fraud by the

1004
01:00:17,440 --> 01:00:24,880
Speaker 1: law law and okay, um, I'm I'm conscious that I've

1005
01:00:24,880 --> 01:00:27,120
Speaker 1: taken up a lot of your time on you know,

1006
01:00:27,280 --> 01:00:29,440
Speaker 1: on on this Friday, But I want to end with

1007
01:00:30,280 --> 01:00:31,680
Speaker 1: I want to end with a with a with a

1008
01:00:31,800 --> 01:00:36,640
Speaker 1: question for you sort. So we've seen we've seen this year,

1009
01:00:36,640 --> 01:00:39,560
Speaker 1: I mean, twenty two has been has been just you know,

1010
01:00:39,640 --> 01:00:42,960
Speaker 1: the year of the beast in in in crypto terms.

1011
01:00:43,840 --> 01:00:45,960
Speaker 1: And we keep seeing this, don't we We saw it

1012
01:00:46,040 --> 01:00:48,920
Speaker 1: with we saw it with Mount Cox and then you know,

1013
01:00:49,000 --> 01:00:51,720
Speaker 1: we had this, we had terror earlier this year, and

1014
01:00:51,760 --> 01:00:53,800
Speaker 1: now we've had f t X. You know, we've had

1015
01:00:53,840 --> 01:00:57,400
Speaker 1: these these convulsions in the industry that we've had to

1016
01:00:57,440 --> 01:01:01,520
Speaker 1: go through and kind of each time, I'm the bus

1017
01:01:01,680 --> 01:01:04,280
Speaker 1: the industry has kind of picked itself up, shaking, It's

1018
01:01:04,480 --> 01:01:08,560
Speaker 1: dusted itself off and kept going. Do you think do

1019
01:01:08,600 --> 01:01:11,440
Speaker 1: you think this is a watershed moment or do you

1020
01:01:11,520 --> 01:01:13,800
Speaker 1: think you know, down the line, we're going to have

1021
01:01:13,840 --> 01:01:15,400
Speaker 1: to We're going to have to go through more of

1022
01:01:15,440 --> 01:01:18,480
Speaker 1: these convulsions. We're going to have to keep learning these

1023
01:01:18,560 --> 01:01:24,360
Speaker 1: lessons the hard way. That's a great question, guy, Look,

1024
01:01:25,720 --> 01:01:32,120
Speaker 1: human nature, our guests after a few years, so this

1025
01:01:32,200 --> 01:01:36,720
Speaker 1: will happen again. It happens every sniggle I mentioned G

1026
01:01:36,960 --> 01:01:39,600
Speaker 1: Capital two does. But people on crypto don't know what

1027
01:01:39,680 --> 01:01:45,120
Speaker 1: the heck G campitbal was and and this happened ten

1028
01:01:45,200 --> 01:01:47,480
Speaker 1: years before that, and it will happen again and again

1029
01:01:47,480 --> 01:01:52,960
Speaker 1: and again. So however, the infrastructure improves and the service

1030
01:01:52,960 --> 01:02:00,000
Speaker 1: providers improved and customers start to learn, so there is progress.

1031
01:02:00,040 --> 01:02:03,400
Speaker 1: There is an improvement. You know, it'll get better. So

1032
01:02:04,760 --> 01:02:06,360
Speaker 1: you just got to keep your wits about you, do

1033
01:02:06,440 --> 01:02:12,760
Speaker 1: your homework. Wealth creation doesn't happen through an overnight that

1034
01:02:13,040 --> 01:02:16,280
Speaker 1: rich quick scheme betting on a mean point. Any winner

1035
01:02:16,280 --> 01:02:19,560
Speaker 1: there has a matching loser somewhere else. Okay, play the

1036
01:02:19,640 --> 01:02:22,960
Speaker 1: long game, preserve your wealth. You know what Albert Einstein

1037
01:02:23,000 --> 01:02:26,560
Speaker 1: said that the eighth miracle the world has compounded returns, right,

1038
01:02:27,360 --> 01:02:30,200
Speaker 1: and you have an environment where our dislocation, so there

1039
01:02:30,240 --> 01:02:35,160
Speaker 1: are opportunities I think you can do well. Uh and

1040
01:02:36,360 --> 01:02:38,919
Speaker 1: maybe early stage crypto VC firms that have a real

1041
01:02:38,960 --> 01:02:42,400
Speaker 1: skill know what they're doing. We allocate to what we

1042
01:02:42,440 --> 01:02:44,720
Speaker 1: think of the best firms a little bit that do this.

1043
01:02:46,760 --> 01:02:48,560
Speaker 1: So I think that's that's all I'm saying on that front.

1044
01:02:49,960 --> 01:02:52,160
Speaker 1: And I guess it's up to It's up to the

1045
01:02:52,200 --> 01:02:55,840
Speaker 1: crypto user, whether they're you know, whether they're a retail investor,

1046
01:02:55,920 --> 01:02:59,160
Speaker 1: whether they're a retail trader, whether they're institution whatever, to

1047
01:03:00,040 --> 01:03:01,880
Speaker 1: us kind of vote with their feet. In many ways,

1048
01:03:02,000 --> 01:03:05,560
Speaker 1: it's like, we know, identify who the good players, who

1049
01:03:05,600 --> 01:03:09,360
Speaker 1: the good players are, ask the hard questions about, you know,

1050
01:03:09,400 --> 01:03:13,200
Speaker 1: things like reserves and liabilities. You know, there's so much talk,

1051
01:03:13,280 --> 01:03:16,520
Speaker 1: isn't there at the moment of exchanges publishing, you know,

1052
01:03:16,600 --> 01:03:20,040
Speaker 1: publishing proof of reserves, proof of liabilities and things like this.

1053
01:03:20,120 --> 01:03:23,360
Speaker 1: It's like we as we as crypto users, have to

1054
01:03:24,040 --> 01:03:27,920
Speaker 1: have to demand it and say, Okay, it's hard, it's

1055
01:03:28,480 --> 01:03:30,200
Speaker 1: China there here, here's what I'm kind of makes that

1056
01:03:30,360 --> 01:03:33,120
Speaker 1: So for my main messages focused on the most regulated player,

1057
01:03:33,240 --> 01:03:36,080
Speaker 1: here's what. I was on a panel with Alex and Maschinski,

1058
01:03:36,120 --> 01:03:39,040
Speaker 1: and I asked it, why don't you put your assets

1059
01:03:39,040 --> 01:03:41,080
Speaker 1: and liabilites and change? He said, he did, and it's

1060
01:03:41,080 --> 01:03:44,919
Speaker 1: an ansense he did not much less likely, so people

1061
01:03:44,920 --> 01:03:48,520
Speaker 1: will say all sorts and ansts, oh, it's not change.

1062
01:03:49,000 --> 01:03:51,920
Speaker 1: Wh was validating the contents of the change. That's the

1063
01:03:51,960 --> 01:03:55,400
Speaker 1: no validation mechanism for the balance. In other words, the

1064
01:03:55,560 --> 01:04:01,600
Speaker 1: technical expertise to assess the comments of these people's very high.

1065
01:04:02,000 --> 01:04:04,120
Speaker 1: I spent twenty years doing this stuff, so I know

1066
01:04:04,200 --> 01:04:06,920
Speaker 1: where to focused. And even then you don't get all

1067
01:04:06,920 --> 01:04:10,160
Speaker 1: the data you want. It's very difficult even for someone

1068
01:04:10,160 --> 01:04:13,120
Speaker 1: like me. So my main messages focus on the most

1069
01:04:13,160 --> 01:04:17,120
Speaker 1: regulated players, focus on trust banks. There's actually it's a

1070
01:04:17,120 --> 01:04:20,520
Speaker 1: specifically regulatory term, trust bank, at least in the United States.

1071
01:04:20,520 --> 01:04:24,959
Speaker 1: If you're the US, you avoid asked, what's the jurisdiction

1072
01:04:25,160 --> 01:04:30,600
Speaker 1: of this player? Who is their primary regulator? And seek

1073
01:04:30,680 --> 01:04:33,320
Speaker 1: the highest form of regulation. If you're going through that

1074
01:04:33,360 --> 01:04:35,320
Speaker 1: from the channel, then yeah, we should still have this,

1075
01:04:35,360 --> 01:04:37,160
Speaker 1: for instance in my abilites, and she gives we should.

1076
01:04:37,200 --> 01:04:42,520
Speaker 1: But how can you trust these players when they're saying

1077
01:04:42,520 --> 01:04:45,080
Speaker 1: they're doing these things and they're blowing up who or

1078
01:04:45,120 --> 01:04:50,640
Speaker 1: three months later? I don't trust what they say. There's

1079
01:04:50,680 --> 01:04:53,680
Speaker 1: a lot to do back to you, myn infrastructure. In

1080
01:04:53,800 --> 01:04:56,040
Speaker 1: a few years from now, we could have the infrastructure

1081
01:04:56,080 --> 01:04:58,720
Speaker 1: can verify these things on chain. But when I can

1082
01:04:58,760 --> 01:05:00,880
Speaker 1: have it overnight, even the mexic won't. It won't be there.

1083
01:05:01,520 --> 01:05:03,240
Speaker 1: Even you see the data and the equivalent of like

1084
01:05:03,360 --> 01:05:08,000
Speaker 1: either scale. Let's say that you know the oracles could

1085
01:05:08,000 --> 01:05:14,600
Speaker 1: have fault the inputs that fee either scale. Yeah, yeah,

1086
01:05:14,920 --> 01:05:16,680
Speaker 1: I mean, I mean we we you know, we don't

1087
01:05:16,720 --> 01:05:19,320
Speaker 1: know what's going on behind the scenes, do we. In

1088
01:05:19,360 --> 01:05:22,480
Speaker 1: the immediate kind of fallout of FTX, when when everyone

1089
01:05:22,600 --> 01:05:25,960
Speaker 1: was kind of scrambling to to offer proof of reserves,

1090
01:05:26,000 --> 01:05:29,080
Speaker 1: you know, there were suspiciously large amounts of crypto kind

1091
01:05:29,080 --> 01:05:33,760
Speaker 1: of moving between various exchanges for for reasons that were

1092
01:05:34,120 --> 01:05:37,840
Speaker 1: never sort of satisfactorily explained. So yeah, you're right, Ram,

1093
01:05:37,880 --> 01:05:42,000
Speaker 1: It's yeah, we we can't. We can't rely on these Certainly,

1094
01:05:42,000 --> 01:05:44,720
Speaker 1: the technology doesn't exist for us to be you know,

1095
01:05:44,840 --> 01:05:47,520
Speaker 1: for for these things to be proved beyond doubt, we

1096
01:05:47,600 --> 01:05:52,000
Speaker 1: have to we have to take the steps ourselves. That's right,

1097
01:05:52,600 --> 01:05:56,840
Speaker 1: That's right, exactly. Well, Ram, thank you, thank you so

1098
01:05:56,920 --> 01:05:59,400
Speaker 1: much for today. I I've taken up so much of

1099
01:05:59,400 --> 01:06:02,040
Speaker 1: your time, and I really appreciate you. You're shedding some

1100
01:06:02,120 --> 01:06:03,600
Speaker 1: light on all this for us. We you know, we

1101
01:06:03,680 --> 01:06:06,760
Speaker 1: kind of we we covered ft X and Alameda and

1102
01:06:06,800 --> 01:06:09,400
Speaker 1: then kind of, you know, wandered across to this sort

1103
01:06:09,440 --> 01:06:12,400
Speaker 1: of the broader kind of spectrum of crypto and you know,

1104
01:06:13,640 --> 01:06:17,600
Speaker 1: how we how we kind of navigate that landscape, But

1105
01:06:17,680 --> 01:06:20,240
Speaker 1: there is there is still so much to unpack about

1106
01:06:20,760 --> 01:06:23,080
Speaker 1: ft X and Alameda that's obviously going to come out

1107
01:06:23,280 --> 01:06:27,520
Speaker 1: in the next few weeks, And obviously I guess we're

1108
01:06:27,520 --> 01:06:31,680
Speaker 1: probably going to be looking ahead to Tuesday. Is SPF

1109
01:06:31,720 --> 01:06:36,440
Speaker 1: going to pitch up and and testify before Congress, perhaps

1110
01:06:36,480 --> 01:06:39,160
Speaker 1: perjure himself before Congress, or is he going to risk

1111
01:06:39,200 --> 01:06:43,680
Speaker 1: a subpoena instead. There's there's so much still to happen, right,

1112
01:06:44,720 --> 01:06:46,440
Speaker 1: We'll see what happens. I'm sure gonna have a lot

1113
01:06:46,480 --> 01:06:49,960
Speaker 1: of phrases involving the explansion to my knowledge and as

1114
01:06:49,960 --> 01:06:53,040
Speaker 1: I can store, as I can recollect. But first off,

1115
01:06:53,240 --> 01:06:55,160
Speaker 1: I think you It's been a pleasure, and I appreciate

1116
01:06:55,200 --> 01:06:58,720
Speaker 1: your leadership in the category you're a shirt offer many

1117
01:06:59,320 --> 01:07:03,160
Speaker 1: investors and appreciate your leadership and the thoughtful questions how

1118
01:07:03,160 --> 01:07:05,400
Speaker 1: would it pay forward and do the best I can

1119
01:07:05,440 --> 01:07:08,680
Speaker 1: contribute here? So thank you, so much, Thank you rum Yeah,

1120
01:07:08,760 --> 01:07:11,320
Speaker 1: well we must, we must do this again. Sometimes perhaps

1121
01:07:11,400 --> 01:07:13,720
Speaker 1: perhaps when there are you know, yet more of these

1122
01:07:14,120 --> 01:07:17,240
Speaker 1: gory details emerge, we can we can get together again

1123
01:07:17,320 --> 01:07:23,600
Speaker 1: and unpack some of them absolutely, Until then, you know,

1124
01:07:23,080 --> 01:07:26,480
Speaker 1: you can find me at Ramalla Laia. You know it's

1125
01:07:26,480 --> 01:07:30,920
Speaker 1: a mouthful at Ramallah Wallia or at Lumita. Well, we

1126
01:07:31,040 --> 01:07:33,880
Speaker 1: published real time research and takes there. We're gonna have

1127
01:07:33,920 --> 01:07:36,800
Speaker 1: a nice threat on silver Gate in a few days

1128
01:07:36,920 --> 01:07:40,240
Speaker 1: and another threat on DCG Genesis. I thought we'd beat

1129
01:07:40,280 --> 01:07:43,320
Speaker 1: that to death apparently from that, so there's more, there's

1130
01:07:43,360 --> 01:07:46,640
Speaker 1: more to come on that one. Crypto always keeps us busy.

1131
01:07:46,680 --> 01:07:50,280
Speaker 1: That's worth sure. Wow. Yeah, I was going to say, actually, folks,

1132
01:07:50,320 --> 01:07:52,880
Speaker 1: you you must follow Ram on Twitter. I will I

1133
01:07:52,920 --> 01:07:56,200
Speaker 1: will leave links in the description to Ram and Lumina

1134
01:07:56,320 --> 01:07:59,680
Speaker 1: as well. But yeah, Ram, you've done a fantastic job

1135
01:07:59,720 --> 01:08:02,960
Speaker 1: of of breaking down some of these things and I

1136
01:08:03,000 --> 01:08:05,080
Speaker 1: really appreciate it, and I know lots of other people

1137
01:08:05,120 --> 01:08:07,880
Speaker 1: in the community appreciate it as well. So please keep

1138
01:08:07,960 --> 01:08:10,600
Speaker 1: up that good work and h and let's chat again

1139
01:08:10,600 --> 01:08:12,960
Speaker 1: in the future. Thank you, my pleasure. Thank you so much.

1140
01:08:13,080 --> 01:08:17,400
Speaker 1: Have a good one. Well, thank you so much. Great,

1141
01:08:17,400 --> 01:08:19,920
Speaker 1: great question, it's great, great questions. And I thought you

1142
01:08:19,920 --> 01:08:23,320
Speaker 1: you you took him good directions and you gave me

1143
01:08:23,360 --> 01:08:26,559
Speaker 1: a good you key up the softball so I could

1144
01:08:27,120 --> 01:08:30,840
Speaker 1: drop in the campent there, so that was as as well. Now,

1145
01:08:31,160 --> 01:08:34,720
Speaker 1: so it's definitely, thank you, thank you. Yeah. It's it's

1146
01:08:34,720 --> 01:08:37,120
Speaker 1: a funny thing this, you know, this this kind of

1147
01:08:37,600 --> 01:08:40,120
Speaker 1: thing of interviewing people, you know, talking to people and

1148
01:08:40,160 --> 01:08:43,360
Speaker 1: interviewing him. It's it's something that I've sort of only

1149
01:08:43,439 --> 01:08:46,240
Speaker 1: kind of just started doing and you realize just how

1150
01:08:46,439 --> 01:08:50,479
Speaker 1: how difficult it is. But so I right back at you.

1151
01:08:50,560 --> 01:08:53,360
Speaker 1: I appreciate you. I appreciate you sort of you know,

1152
01:08:53,880 --> 01:08:56,479
Speaker 1: taking you know, taking any any bones that I throw

1153
01:08:56,720 --> 01:09:03,640
Speaker 1: and running with them. It's uh yeah, um yes, yeah.

1154
01:09:03,800 --> 01:09:09,120
Speaker 1: And we moved out September. Cool. What's the best conference

1155
01:09:09,120 --> 01:09:13,960
Speaker 1: in Dubui for crypto to attend? You think, wow? There,

1156
01:09:14,000 --> 01:09:17,120
Speaker 1: I mean, there are so many. Um, the only one,

1157
01:09:17,200 --> 01:09:19,599
Speaker 1: the only sort of one that I've been to was

1158
01:09:19,600 --> 01:09:22,880
Speaker 1: was Future Blockchain, this part of this huge gi tech

1159
01:09:23,000 --> 01:09:25,440
Speaker 1: summer and that was back in that was back in October.

1160
01:09:25,520 --> 01:09:28,800
Speaker 1: That was that was good. It was it was part

1161
01:09:28,880 --> 01:09:31,680
Speaker 1: of this larger, huge technology conference. So the kind of

1162
01:09:31,720 --> 01:09:36,160
Speaker 1: crypto bit was was quite separate. Um, I've heard, I'm

1163
01:09:36,240 --> 01:09:38,120
Speaker 1: I mean, I'm looking to go to some you know,

1164
01:09:38,200 --> 01:09:40,519
Speaker 1: looking to go to some more, especially especially in the

1165
01:09:40,560 --> 01:09:43,080
Speaker 1: new year. I think they can they tend to be

1166
01:09:43,439 --> 01:09:45,920
Speaker 1: a little dry. I'm told you know, they're not quite

1167
01:09:45,960 --> 01:09:48,559
Speaker 1: as not quite as as good far as things like

1168
01:09:48,920 --> 01:09:51,519
Speaker 1: Bitcoin Miami or things like that. We're actually trying to

1169
01:09:51,560 --> 01:09:54,040
Speaker 1: do some some crypto events here, you know, under the

1170
01:09:54,040 --> 01:10:00,920
Speaker 1: Coin Bureau brand, because yeah, we're planning. We're planning a

1171
01:10:01,920 --> 01:10:05,080
Speaker 1: sort of B two B event in March, I think,

1172
01:10:05,160 --> 01:10:08,160
Speaker 1: and then a big sort of beta C thing in London.

1173
01:10:08,200 --> 01:10:10,000
Speaker 1: We did it earlier this year in May, so I

1174
01:10:10,000 --> 01:10:12,320
Speaker 1: think we're going to do another one of those in

1175
01:10:12,360 --> 01:10:15,599
Speaker 1: the summer. So if you fancy, yeah, if you if

1176
01:10:15,640 --> 01:10:17,799
Speaker 1: you fancy a trip over to Dubai or to London,

1177
01:10:18,040 --> 01:10:19,479
Speaker 1: it would be it would be great to have you

1178
01:10:19,520 --> 01:10:21,920
Speaker 1: at one of these events. You'd be I'll give you

1179
01:10:21,960 --> 01:10:25,800
Speaker 1: a holler yeah, no, certainly, let me know trip out.

1180
01:10:25,800 --> 01:10:28,639
Speaker 1: There are some dear crypto ference in Dubai as well.

1181
01:10:29,479 --> 01:10:31,240
Speaker 1: If you're in New York in your holoto, we we

1182
01:10:31,280 --> 01:10:34,960
Speaker 1: have these private dinners like Tenda twenty people, but they're

1183
01:10:34,960 --> 01:10:37,400
Speaker 1: all they're all operators of the season the New York market.

1184
01:10:37,479 --> 01:10:38,880
Speaker 1: So if you if you get to New York in

1185
01:10:38,920 --> 01:10:42,000
Speaker 1: meat like a two week notice, I can organize a

1186
01:10:42,040 --> 01:10:45,080
Speaker 1: dinner and get together. It's informal, you know, we pick

1187
01:10:45,160 --> 01:10:48,120
Speaker 1: up the tabs it's proven really great people together and

1188
01:10:48,200 --> 01:10:51,559
Speaker 1: it's awesome, you know, and these are your people from

1189
01:10:51,640 --> 01:10:55,400
Speaker 1: genesis from the crypto VCS points only two is there,

1190
01:10:55,560 --> 01:10:58,559
Speaker 1: Apollo is there. I mean it's it's and it's the

1191
01:10:58,600 --> 01:11:00,800
Speaker 1: best idea for this. We everyone go on the room

1192
01:11:00,840 --> 01:11:03,439
Speaker 1: and say one best idea crypto or our crypto to

1193
01:11:03,479 --> 01:11:06,320
Speaker 1: invest in. It's like a little icebreaker and keep I

1194
01:11:06,320 --> 01:11:08,639
Speaker 1: have a drink and just hang out. So it's it's chanting.

1195
01:11:09,320 --> 01:11:13,439
Speaker 1: It's private apple station. So you do that about once

1196
01:11:13,439 --> 01:11:15,800
Speaker 1: a month or so. But yeah, if you're in our

1197
01:11:15,960 --> 01:11:17,720
Speaker 1: neck of the words, skimmia holler or I'll be able

1198
01:11:17,720 --> 01:11:19,360
Speaker 1: to coin having too happy to get a beverage and

1199
01:11:19,400 --> 01:11:21,760
Speaker 1: you great to you know, you know a person at

1200
01:11:21,800 --> 01:11:26,080
Speaker 1: some point, so absolutely stuff. Absolutely, oh well, this has

1201
01:11:26,120 --> 01:11:28,040
Speaker 1: been great. Thank you rum And yeah, like I said,

1202
01:11:28,080 --> 01:11:30,360
Speaker 1: like I said in the you know in the interview itself,

1203
01:11:30,400 --> 01:11:32,200
Speaker 1: I'd love to I'd love to do this again sometime

1204
01:11:32,240 --> 01:11:34,519
Speaker 1: if you'd be if you'd be up for it, if

1205
01:11:34,560 --> 01:11:36,960
Speaker 1: you absolutely absolutely and keep up with the great works.

1206
01:11:37,280 --> 01:11:40,000
Speaker 1: Thank you again. Thank you have going take about cheers.

1207
01:11:40,680 --> 01:11:45,520
Speaker 1: Thank you so much for listening to the coin Bureau podcast.

1208
01:11:45,600 --> 01:11:48,439
Speaker 1: If you'd like to learn more about cryptocurrency. You can

1209
01:11:48,520 --> 01:11:51,839
Speaker 1: visit our YouTube channel at YouTube dot com forward slash

1210
01:11:51,840 --> 01:11:54,679
Speaker 1: coin Bureau. You can also go to coin bureau dot

1211
01:11:54,720 --> 01:11:57,519
Speaker 1: com for loads more information about all things crypto. You

1212
01:11:57,560 --> 01:12:00,120
Speaker 1: can follow me on Twitter at at coin Bureau all

1213
01:12:00,200 --> 01:12:03,960
Speaker 1: one word, and I'm also active on TikTok and Instagram

1214
01:12:04,000 --> 01:12:14,400
Speaker 1: too m