1 00:00:14,160 --> 00:00:17,919 Speaker 1: Hello, and welcome to What Goes Up, a weekly markets podcast. 2 00:00:18,000 --> 00:00:20,840 Speaker 1: My name is Mike Reagan, I'm a senior editor at Bloomberg, 3 00:00:20,920 --> 00:00:24,160 Speaker 1: and I'm Danna huk Across Acid reporter with Bloomberg. At 4 00:00:24,239 --> 00:00:27,000 Speaker 1: this week on the show, Well, it seems like every 5 00:00:27,120 --> 00:00:30,520 Speaker 1: day there are more alarming revelations about the mess that 6 00:00:30,640 --> 00:00:34,400 Speaker 1: was left behind when Sam bankman Fried's f TX crypto 7 00:00:34,600 --> 00:00:39,080 Speaker 1: empire collapsed, and as the bankruptcy case gets underway, there 8 00:00:39,080 --> 00:00:41,600 Speaker 1: are plenty of questions swirling around about whether all of 9 00:00:41,640 --> 00:00:44,840 Speaker 1: the contagion has yet to play out and how much 10 00:00:44,880 --> 00:00:48,239 Speaker 1: permanent damage has been done to the industry. We'll get 11 00:00:48,240 --> 00:00:51,040 Speaker 1: into it with the CEO of a Canadian company that's 12 00:00:51,080 --> 00:00:54,960 Speaker 1: at the intersection of crypto and traditional capital market investors. 13 00:00:55,680 --> 00:00:57,840 Speaker 1: But first, Phil Donna, I have to ask, are you 14 00:00:57,840 --> 00:01:01,680 Speaker 1: watching the World Cup. I'm not. I'm being a very 15 00:01:01,840 --> 00:01:05,320 Speaker 1: very diligent, hard working person when I'm at my desk. 16 00:01:05,360 --> 00:01:08,560 Speaker 1: I'm definitely not watching soccer. I don't believe that, unlike you. 17 00:01:08,840 --> 00:01:10,880 Speaker 1: Unlike you, I actually took a half day on Monday 18 00:01:10,880 --> 00:01:13,760 Speaker 1: to actually watch the US game at the pub and no, 19 00:01:13,920 --> 00:01:15,880 Speaker 1: you didn't, bitter sweet well at that and to do 20 00:01:16,000 --> 00:01:19,640 Speaker 1: my Thanksgiving shopping, so I two for one, a very 21 00:01:19,680 --> 00:01:22,199 Speaker 1: bitter sweet tie. But I bring it up because two 22 00:01:22,240 --> 00:01:26,000 Speaker 1: of my craziest things are World Cup related. So little 23 00:01:26,000 --> 00:01:28,880 Speaker 1: tease for the end of the show there. Yeah, no, 24 00:01:28,959 --> 00:01:30,960 Speaker 1: that's a good tease. I wonder what it could be. 25 00:01:31,200 --> 00:01:33,040 Speaker 1: I'm trying to think of all the headlines. I'll give 26 00:01:33,040 --> 00:01:34,479 Speaker 1: you a hint that they go all the way back 27 00:01:34,520 --> 00:01:37,880 Speaker 1: to the nineteen eighties, which, oh no, incidentally is the 28 00:01:37,920 --> 00:01:42,680 Speaker 1: last time I've actually played soccer, so a little bit 29 00:01:42,680 --> 00:01:45,679 Speaker 1: about my skills in that game. It's possible that we 30 00:01:45,720 --> 00:01:48,000 Speaker 1: can bring in our guests from this week into this 31 00:01:48,080 --> 00:01:50,560 Speaker 1: conversation as well. I want to bring in Stefano Lett. 32 00:01:50,800 --> 00:01:55,160 Speaker 1: He's the chief executive officer of f R and T Financial. Stefan, 33 00:01:55,280 --> 00:01:57,440 Speaker 1: thank you so much for coming on the show. Thank 34 00:01:57,440 --> 00:01:59,560 Speaker 1: you for having me. I'm not a soccer star, but 35 00:01:59,560 --> 00:02:02,680 Speaker 1: I will be watching with going on right now. It's 36 00:02:02,960 --> 00:02:05,760 Speaker 1: a welcome, welcome, positive that we can have on in 37 00:02:05,760 --> 00:02:10,360 Speaker 1: the background. You're calling in from a very special place, 38 00:02:10,639 --> 00:02:14,760 Speaker 1: or it's special at least up today in the crypto world, 39 00:02:14,760 --> 00:02:17,320 Speaker 1: which is the Bahamas, and I want to start with that. 40 00:02:17,400 --> 00:02:19,119 Speaker 1: I want to ask you to tell us a bit 41 00:02:19,440 --> 00:02:22,880 Speaker 1: about why you're there, what you're thinking about, and what 42 00:02:22,919 --> 00:02:26,079 Speaker 1: that trip has been like. Yeah, no, I'm in the Bahamas. 43 00:02:26,080 --> 00:02:31,840 Speaker 1: I've been here basically since I arrived, not this Sunday, 44 00:02:31,840 --> 00:02:35,160 Speaker 1: this Sunday before. You know, our organization as a presence 45 00:02:35,160 --> 00:02:37,840 Speaker 1: down here. We have a lot of partners and clients 46 00:02:37,960 --> 00:02:40,160 Speaker 1: and just people that are are friends that are down here. 47 00:02:40,240 --> 00:02:42,880 Speaker 1: So I came. I came here to be close to them, 48 00:02:42,960 --> 00:02:44,840 Speaker 1: try to be on the boots on the ground and 49 00:02:44,880 --> 00:02:47,280 Speaker 1: really get a feel of of of how everyone was 50 00:02:47,320 --> 00:02:50,920 Speaker 1: thinking about the situation and how it was unfolding. It 51 00:02:51,040 --> 00:02:53,640 Speaker 1: is really ugly down here, you know. This is uh, 52 00:02:53,680 --> 00:02:56,079 Speaker 1: this was a real point of excitement for the Bahamas, 53 00:02:56,120 --> 00:02:58,120 Speaker 1: the fact that they had become such a such a 54 00:02:58,120 --> 00:03:01,000 Speaker 1: crypto hub. You know, this is this is a country 55 00:03:01,000 --> 00:03:03,760 Speaker 1: that very much kind of missed out on that. Something 56 00:03:03,760 --> 00:03:05,600 Speaker 1: it's not very well known about the Caribbean is that 57 00:03:06,000 --> 00:03:09,040 Speaker 1: in the early nineties, when the tech boom was exploding, 58 00:03:09,160 --> 00:03:12,480 Speaker 1: a lot of the dot com enterprises, including firms like Amazon, 59 00:03:13,040 --> 00:03:16,040 Speaker 1: We're also having issues with kind of the US financial system, 60 00:03:16,080 --> 00:03:18,600 Speaker 1: and they're were slow and the willingness to bring them 61 00:03:18,600 --> 00:03:20,600 Speaker 1: on board, and so they came down to the Caribbean, 62 00:03:20,840 --> 00:03:24,160 Speaker 1: and the Caribbean basically said, you know, if that, you know, 63 00:03:24,200 --> 00:03:25,519 Speaker 1: if the US banks don't want to work with you, 64 00:03:25,560 --> 00:03:27,600 Speaker 1: we don't want to work with you either. And obviously 65 00:03:27,680 --> 00:03:29,360 Speaker 1: if they made a different decision at that time, they 66 00:03:29,360 --> 00:03:31,360 Speaker 1: could have had a very different experience over the last 67 00:03:31,400 --> 00:03:34,359 Speaker 1: you know, five years. So this was seen as something 68 00:03:34,400 --> 00:03:36,280 Speaker 1: they didn't really want to miss out on, and they 69 00:03:36,360 --> 00:03:38,880 Speaker 1: really you know, moved quickly and they brought in a 70 00:03:38,880 --> 00:03:41,280 Speaker 1: lot of the top firms, uh, and to see that 71 00:03:41,360 --> 00:03:44,960 Speaker 1: all unravel as quickly as it did is extremely disappointing 72 00:03:45,240 --> 00:03:48,560 Speaker 1: to everyone involved, not not to mention the fact that, uh, 73 00:03:48,600 --> 00:03:50,640 Speaker 1: you know, they're the ft X was a position to 74 00:03:50,680 --> 00:03:53,760 Speaker 1: themselves as a banking alternative, particularly in regions where they 75 00:03:53,800 --> 00:03:56,760 Speaker 1: operated like the Bahamas. So there's even more horror stories 76 00:03:56,960 --> 00:03:59,720 Speaker 1: of people treating ft X like bank like infrastructure, and 77 00:03:59,720 --> 00:04:01,880 Speaker 1: there are leaving you know, a significant amount of their 78 00:04:01,880 --> 00:04:03,640 Speaker 1: assets just kind of lating on f t X, which 79 00:04:03,680 --> 00:04:06,040 Speaker 1: are now and you know, you know, now they can't 80 00:04:06,040 --> 00:04:08,720 Speaker 1: get access to just like everybody else. So there's a 81 00:04:08,760 --> 00:04:11,640 Speaker 1: lot of different kind of angles to this story that 82 00:04:11,760 --> 00:04:15,800 Speaker 1: just get really ugly. Um and you know, unfortunately, you know, 83 00:04:16,040 --> 00:04:17,720 Speaker 1: uh you know, the Bahamas is bearing some of the 84 00:04:17,760 --> 00:04:19,400 Speaker 1: runs of it right now. And I should have been 85 00:04:19,400 --> 00:04:22,000 Speaker 1: super super clear. Um I should have mentioned this earlier. 86 00:04:22,160 --> 00:04:26,360 Speaker 1: You're there because f t X is headquartered there, right, Yeah, 87 00:04:26,480 --> 00:04:28,080 Speaker 1: just just to give a little color on that. I 88 00:04:28,080 --> 00:04:30,920 Speaker 1: mean f t X basically when China kind of changed 89 00:04:30,960 --> 00:04:33,880 Speaker 1: their strategy about foreign relations in general, ft X was 90 00:04:33,920 --> 00:04:37,039 Speaker 1: launched in Hong Kong, and they've very quickly kind of 91 00:04:37,040 --> 00:04:39,279 Speaker 1: turned around and used Bohmas as a new jurisdiction and 92 00:04:39,320 --> 00:04:41,640 Speaker 1: came down here and they brought their whole organization to 93 00:04:41,760 --> 00:04:44,520 Speaker 1: live here. Not only to kind of be regulated out 94 00:04:44,520 --> 00:04:46,800 Speaker 1: of here, but there was you know, tons of FTX 95 00:04:46,800 --> 00:04:49,840 Speaker 1: employees that moved down here. They all started to you know, 96 00:04:49,960 --> 00:04:52,120 Speaker 1: to to rent, to invest in property, They bought a 97 00:04:52,160 --> 00:04:55,159 Speaker 1: lot of office space and all that. So they really quickly, 98 00:04:55,200 --> 00:04:58,320 Speaker 1: within about a year, you know, fifteen months, got very 99 00:04:58,480 --> 00:05:01,719 Speaker 1: ingrained in the fabric of the country. And you know, 100 00:05:01,760 --> 00:05:03,360 Speaker 1: it was one of the biggest, one of the biggest 101 00:05:03,360 --> 00:05:05,479 Speaker 1: companies operating out of here, and brought a lot of 102 00:05:05,520 --> 00:05:07,200 Speaker 1: other companies that wanted to kind of be in the 103 00:05:07,200 --> 00:05:10,320 Speaker 1: f t X sphere and ecosystem with them. Well, Stefan 104 00:05:10,400 --> 00:05:13,320 Speaker 1: as far As. Uh, I understand, Uh, your firm f 105 00:05:13,480 --> 00:05:16,160 Speaker 1: R and C didn't have any direct exposure to to 106 00:05:16,240 --> 00:05:19,400 Speaker 1: f t X. That's correct, That's correct. We didn't have 107 00:05:19,400 --> 00:05:21,880 Speaker 1: any direct exposure f t X. In addition to that, 108 00:05:22,080 --> 00:05:24,440 Speaker 1: you know, the we did see some red flags in 109 00:05:24,480 --> 00:05:26,280 Speaker 1: f t X. I mean, you know, red flags and 110 00:05:26,360 --> 00:05:28,880 Speaker 1: counterparty risk aren't as much of an issue in in 111 00:05:28,920 --> 00:05:33,080 Speaker 1: a in a period one. I mean, you know, I 112 00:05:33,120 --> 00:05:35,800 Speaker 1: would imagine that Sam, even if he did have a 113 00:05:35,800 --> 00:05:37,280 Speaker 1: hole that he was covering up, would have been able 114 00:05:37,279 --> 00:05:40,159 Speaker 1: to raise capital just you know, uh at the snap 115 00:05:40,240 --> 00:05:44,360 Speaker 1: of his fingers. As two the credit cycle turned over, 116 00:05:44,720 --> 00:05:47,839 Speaker 1: you know, those opportunities went away for even someone like Sam. 117 00:05:48,000 --> 00:05:50,080 Speaker 1: So at that point, you know, you start to say 118 00:05:50,120 --> 00:05:52,200 Speaker 1: to yourself, Okay, well, how do I feel about these 119 00:05:52,200 --> 00:05:55,200 Speaker 1: counterparties and you know, the risk that they're taking, the 120 00:05:55,520 --> 00:05:57,479 Speaker 1: even like the ethos of the way that they operate, 121 00:05:57,680 --> 00:06:00,279 Speaker 1: and so from my perspective, and this is come and 122 00:06:00,560 --> 00:06:02,520 Speaker 1: started to come out kind of as as the veil 123 00:06:02,560 --> 00:06:04,599 Speaker 1: has been lifted on f t X. I thought they'd 124 00:06:04,640 --> 00:06:07,880 Speaker 1: been extremely aggressive on the regulatory side. They're you know, 125 00:06:08,040 --> 00:06:10,599 Speaker 1: very associated with the the US A lot of the 126 00:06:10,640 --> 00:06:14,200 Speaker 1: principles or US persons, they use US banking system. You know, 127 00:06:14,200 --> 00:06:17,000 Speaker 1: when I'd seen what happened to bit max, where essentially 128 00:06:17,080 --> 00:06:19,400 Speaker 1: the d o J claimed jurisdiction over them and it was, 129 00:06:19,680 --> 00:06:21,920 Speaker 1: you know, really aggressive, I thought that that was also 130 00:06:21,920 --> 00:06:23,800 Speaker 1: a similar risk to f t X, that the U 131 00:06:23,920 --> 00:06:25,840 Speaker 1: S regulators were going to try to claim jurisdiction and 132 00:06:26,000 --> 00:06:28,919 Speaker 1: essentially say that they hadn't been ambided by US regulations. 133 00:06:29,400 --> 00:06:33,000 Speaker 1: Now that's not that bad from a customer standpoint, because 134 00:06:33,040 --> 00:06:35,640 Speaker 1: in the bi Mex case, the platform wasn't impacted at all. 135 00:06:35,680 --> 00:06:37,799 Speaker 1: They really just came after the founders, so that wasn't 136 00:06:38,040 --> 00:06:40,120 Speaker 1: f t X has was a fiat on ramp, which 137 00:06:40,120 --> 00:06:42,960 Speaker 1: bit Mex was not, and so you know, I did 138 00:06:42,960 --> 00:06:44,960 Speaker 1: think that there was a potential that assets would be 139 00:06:45,000 --> 00:06:47,120 Speaker 1: you know, held up for a while, but ultimately I 140 00:06:47,200 --> 00:06:50,640 Speaker 1: felt as though the creditors were going to would just 141 00:06:50,839 --> 00:06:52,240 Speaker 1: have to deal with that for a little while when 142 00:06:52,320 --> 00:06:55,360 Speaker 1: we get resolved. The second thing that I was really 143 00:06:55,400 --> 00:06:57,760 Speaker 1: concerned with with f t X, which is definitely a 144 00:06:57,760 --> 00:07:01,080 Speaker 1: part of what actually has trans are it was they 145 00:07:01,080 --> 00:07:03,680 Speaker 1: grew so quickly. But I mean the reality is is 146 00:07:03,720 --> 00:07:06,960 Speaker 1: that in crypto there are really unique security risks that 147 00:07:07,040 --> 00:07:10,400 Speaker 1: you have. The accounting is also very unique. There aren't 148 00:07:10,400 --> 00:07:12,480 Speaker 1: as many services that are willing to support you with 149 00:07:12,520 --> 00:07:15,360 Speaker 1: things like accounting, So these are kind of limitations to 150 00:07:15,680 --> 00:07:18,480 Speaker 1: growth that when you just look at the FTX timeline 151 00:07:18,480 --> 00:07:20,600 Speaker 1: and how fast they moved, you had to think that 152 00:07:20,680 --> 00:07:22,800 Speaker 1: they were playing a little fast and loose with things 153 00:07:22,800 --> 00:07:25,679 Speaker 1: like security and accounting, right, And you know, we happen 154 00:07:25,720 --> 00:07:28,640 Speaker 1: to just with our you know, our our presence down here. 155 00:07:28,720 --> 00:07:30,640 Speaker 1: I've come to the bombs a lot. You know, we 156 00:07:30,760 --> 00:07:33,480 Speaker 1: also were quite well aware of just kind of how 157 00:07:33,520 --> 00:07:35,559 Speaker 1: they were operating their security, and it was in ways 158 00:07:35,600 --> 00:07:38,440 Speaker 1: that you know, we wouldn't feel comfortable with. So I 159 00:07:38,520 --> 00:07:40,600 Speaker 1: was I was definitely thinking that there was a potential 160 00:07:40,600 --> 00:07:42,120 Speaker 1: that they'd wake up one day and then you know, 161 00:07:42,240 --> 00:07:44,240 Speaker 1: there wouldn't be there would be money missing from whether 162 00:07:44,280 --> 00:07:48,080 Speaker 1: it was a hack or just accounting mistakes, etcetera. Did 163 00:07:48,240 --> 00:07:52,040 Speaker 1: you know the last piece of the puzzle was that 164 00:07:52,200 --> 00:07:55,600 Speaker 1: al Mida was very well known to be seeking leverage 165 00:07:55,960 --> 00:07:58,720 Speaker 1: through different crypto participants over the last nine months, and 166 00:07:58,760 --> 00:08:01,520 Speaker 1: I mean that you know, made its way to our door, etcetera, etcetera. 167 00:08:02,000 --> 00:08:04,440 Speaker 1: And you know, the last nine months has not been 168 00:08:04,440 --> 00:08:06,920 Speaker 1: a good trading environment for cryptocurrency, it's been you know, 169 00:08:06,960 --> 00:08:10,720 Speaker 1: there was a counterparty with Scares following the Luna and Celsius, 170 00:08:11,120 --> 00:08:13,120 Speaker 1: and then kind of moving to the summer, opportunity really 171 00:08:13,120 --> 00:08:15,600 Speaker 1: went away. The market was very quiet, so you know, 172 00:08:15,720 --> 00:08:18,080 Speaker 1: when there was a few firms that we're looking for 173 00:08:18,280 --> 00:08:22,360 Speaker 1: leverage and almost all of them ultimately announced that they 174 00:08:22,400 --> 00:08:24,200 Speaker 1: had taken a big los so would say, okay, you 175 00:08:24,200 --> 00:08:27,240 Speaker 1: know this is something that Celsius was doing, so you go, okay, 176 00:08:27,600 --> 00:08:30,760 Speaker 1: this has been a bit of a telltale sign of 177 00:08:30,800 --> 00:08:35,319 Speaker 1: financial issues with an organization, and you know, given all 178 00:08:35,440 --> 00:08:38,760 Speaker 1: the interconnectivity between Alameda and FT, actually started to say, okay, well, 179 00:08:38,800 --> 00:08:41,199 Speaker 1: I mean I really hope that this isn't is that 180 00:08:41,240 --> 00:08:43,520 Speaker 1: there isn't customer assets that have gone into the mix here. 181 00:08:44,080 --> 00:08:47,360 Speaker 1: But from what transpired, I would never have anticipated that 182 00:08:47,400 --> 00:08:49,400 Speaker 1: it was this bad. I mean there there was, I 183 00:08:49,400 --> 00:08:53,560 Speaker 1: mean just every kind of financial mouthfeasance that you could imagine, 184 00:08:53,679 --> 00:08:57,080 Speaker 1: it seems to have occurred here. And that was beyond 185 00:08:57,200 --> 00:09:00,679 Speaker 1: even what I thought was possible for sure, right right, 186 00:09:00,960 --> 00:09:03,600 Speaker 1: And you know we should point out still no criminal 187 00:09:03,679 --> 00:09:06,920 Speaker 1: charges against anyone, who knows if they're coming, but as 188 00:09:06,960 --> 00:09:10,120 Speaker 1: of now, you know, I'm not sure if anyone is 189 00:09:10,840 --> 00:09:13,320 Speaker 1: sure if it's actual you know, criminal intent or just 190 00:09:13,400 --> 00:09:16,320 Speaker 1: incompetence or what. But well, well, well I'm not gonna 191 00:09:16,320 --> 00:09:18,800 Speaker 1: be a person who's gonna say that either. Unfortunately, just 192 00:09:18,840 --> 00:09:20,760 Speaker 1: with the way that the media is, and it's no 193 00:09:20,800 --> 00:09:23,600 Speaker 1: one's fault, is that everyone is afraid to make those determinations, 194 00:09:23,880 --> 00:09:26,439 Speaker 1: which definitely makes it seem that that Sam's getting a 195 00:09:26,440 --> 00:09:29,640 Speaker 1: little bit of softball behavior in the media, right because 196 00:09:29,960 --> 00:09:32,320 Speaker 1: I'm also not gonna stand here and say like it 197 00:09:32,360 --> 00:09:35,600 Speaker 1: was this or it was that. But it's certainly it's 198 00:09:35,679 --> 00:09:37,280 Speaker 1: very hard to imagine what else he could have been. 199 00:09:37,400 --> 00:09:41,320 Speaker 1: So it's I'm not exactly sure why charges haven't been 200 00:09:41,400 --> 00:09:43,000 Speaker 1: levied yet. I think a lot of people are confused 201 00:09:43,040 --> 00:09:46,080 Speaker 1: about that. But obviously this is a bit of a 202 00:09:46,280 --> 00:09:49,960 Speaker 1: pro Sam news cycle until something like that does happen, 203 00:09:50,080 --> 00:09:52,280 Speaker 1: which a lot of people are getting very upset about 204 00:09:52,320 --> 00:09:55,440 Speaker 1: because they think it's relatively black and white. Right, and 205 00:09:55,480 --> 00:09:58,640 Speaker 1: just before before we delve deeper into this, can you 206 00:09:58,640 --> 00:10:01,280 Speaker 1: actually just tell us a bit more about your company, 207 00:10:01,320 --> 00:10:04,080 Speaker 1: like what you guys do and layout for listeners, what 208 00:10:04,160 --> 00:10:07,720 Speaker 1: you do um your headquartered in Canada, right, so just 209 00:10:07,760 --> 00:10:10,040 Speaker 1: tell us a bit more of that background so that 210 00:10:10,480 --> 00:10:13,400 Speaker 1: we have a sense of f R and T as 211 00:10:13,400 --> 00:10:18,720 Speaker 1: we're discussing su UM. Basically, we are an institutional service 212 00:10:18,720 --> 00:10:22,040 Speaker 1: provider hit within cryptocurrency. Refer to ourselves as an institutional 213 00:10:22,040 --> 00:10:25,040 Speaker 1: capital markets and advisory platform focused on digital assets and 214 00:10:25,080 --> 00:10:27,679 Speaker 1: web based finance. And ultimately what that means is that 215 00:10:27,720 --> 00:10:31,240 Speaker 1: we try to offer a similar service suite that that 216 00:10:31,559 --> 00:10:34,400 Speaker 1: uh you know, that firms would experience from something like 217 00:10:34,440 --> 00:10:38,679 Speaker 1: an investment bank uh to emerging from crypto. And so 218 00:10:38,720 --> 00:10:41,200 Speaker 1: we have several trading which is what I produced cap 219 00:10:41,320 --> 00:10:44,679 Speaker 1: of markets and advisory business lines. In trading, we we 220 00:10:44,800 --> 00:10:47,600 Speaker 1: are what I think, we have some very interesting structured 221 00:10:47,640 --> 00:10:50,800 Speaker 1: products that are institutionally focused that focused on some of 222 00:10:50,840 --> 00:10:53,640 Speaker 1: the you know, very interesting alpha trades in this space 223 00:10:53,640 --> 00:10:56,560 Speaker 1: which have persisted over time, such as you know, access 224 00:10:56,600 --> 00:11:00,280 Speaker 1: to basis. But creating a synthetic layer on top of 225 00:11:00,320 --> 00:11:03,000 Speaker 1: the crypto ecosystem that is regulated and allows people to 226 00:11:03,040 --> 00:11:06,360 Speaker 1: interact without touching crypto directly a lot of different commodities 227 00:11:06,400 --> 00:11:09,640 Speaker 1: and asset classes. It's inconvenient to deal in the underlying 228 00:11:09,679 --> 00:11:11,840 Speaker 1: like the oil market. You know, people don't when they 229 00:11:11,840 --> 00:11:14,120 Speaker 1: do an oil trade. Generalists don't hold physical barrels of 230 00:11:14,200 --> 00:11:16,720 Speaker 1: proud and store it UH. You know, they trade synthetic 231 00:11:16,720 --> 00:11:18,959 Speaker 1: exposure in most cases. So we've built what we think 232 00:11:19,040 --> 00:11:21,959 Speaker 1: is the world's kind of most sophisticated synthetic structure products 233 00:11:21,960 --> 00:11:26,040 Speaker 1: platform UH targeted to institutions. We have deliverable service lines 234 00:11:26,120 --> 00:11:29,000 Speaker 1: where we have you know ODC trading technology, and we 235 00:11:29,040 --> 00:11:33,240 Speaker 1: have treasury management technology that we allow different organizations implement 236 00:11:33,280 --> 00:11:36,560 Speaker 1: if they want to trade large blocks of crypto or 237 00:11:36,640 --> 00:11:39,120 Speaker 1: earned yields on crypto, and we have a bit of 238 00:11:39,120 --> 00:11:41,240 Speaker 1: a different way of doing them than than has been 239 00:11:42,080 --> 00:11:43,840 Speaker 1: was done in the last in the last year or so. 240 00:11:44,120 --> 00:11:46,679 Speaker 1: Then in addition to that, we have the advisory business, 241 00:11:46,679 --> 00:11:50,200 Speaker 1: which is UH we do general advisory for traditional firms 242 00:11:50,200 --> 00:11:52,760 Speaker 1: that are looking to create some kind of crypto product 243 00:11:52,800 --> 00:11:55,000 Speaker 1: on their side, or enter crypto or just looking for 244 00:11:55,000 --> 00:11:58,280 Speaker 1: some advice. We do merchant banking like services where we 245 00:11:58,640 --> 00:12:01,920 Speaker 1: take we know where we get crypto companies and and 246 00:12:02,120 --> 00:12:05,439 Speaker 1: help them you know, sell themselves or you know, get financing, 247 00:12:05,720 --> 00:12:08,079 Speaker 1: and we think we bring to the table, you know, 248 00:12:08,320 --> 00:12:11,760 Speaker 1: real expertise and cryptocurrency. Whereas the traditional investment banks that 249 00:12:11,800 --> 00:12:14,560 Speaker 1: are doing that kind of activity in a lot of cases, 250 00:12:14,800 --> 00:12:16,920 Speaker 1: they don't know crypto well enough to give the strategic 251 00:12:16,960 --> 00:12:19,559 Speaker 1: advice that maybe these companies are looking for. They really 252 00:12:19,600 --> 00:12:22,199 Speaker 1: just kind of fulfill the agency function. We we think 253 00:12:22,200 --> 00:12:24,360 Speaker 1: we fit very nicely into their We also have an 254 00:12:24,360 --> 00:12:27,200 Speaker 1: asset management license which allows us to you know, work 255 00:12:27,240 --> 00:12:29,240 Speaker 1: with large asset managers if they want to build out 256 00:12:29,240 --> 00:12:32,920 Speaker 1: their own crypto portfolios. And really just we find ourselves 257 00:12:32,920 --> 00:12:35,240 Speaker 1: to be extremely well positioned for what we think will 258 00:12:35,320 --> 00:12:38,200 Speaker 1: ultimately be a lot of institutions entering the space. You know, 259 00:12:38,240 --> 00:12:42,040 Speaker 1: these these down market cycles impact that, but we we 260 00:12:42,120 --> 00:12:51,199 Speaker 1: ultimately continue believe in our thesis. Well, yeah, I was 261 00:12:51,240 --> 00:12:52,800 Speaker 1: gonna ask you that stuff in I mean, how much 262 00:12:52,920 --> 00:12:57,560 Speaker 1: damage has been done to sort of the enthusiasm among 263 00:12:57,679 --> 00:13:02,240 Speaker 1: institutional investors to crypto for this FTX fiasco. I mean, 264 00:13:02,360 --> 00:13:05,120 Speaker 1: I would assume that there's been some real sort of 265 00:13:05,160 --> 00:13:09,120 Speaker 1: second guessing and perhaps you know, clients pulling back on 266 00:13:09,160 --> 00:13:12,600 Speaker 1: what we're more aggressive plans previous. What's kind of the 267 00:13:12,600 --> 00:13:15,960 Speaker 1: mood among among clients seft for all this, Yeah, I mean, 268 00:13:15,960 --> 00:13:18,240 Speaker 1: you're entirely right. You know, this has definitely impacted the 269 00:13:18,280 --> 00:13:21,080 Speaker 1: mood of clients. There's definitely a lot of constitutional clients 270 00:13:21,080 --> 00:13:24,040 Speaker 1: that are going to kill all of their crypto plans. Absolutely, 271 00:13:24,320 --> 00:13:26,080 Speaker 1: but I will say, you know, our our businesses were 272 00:13:26,120 --> 00:13:30,360 Speaker 1: launched in the market cycle. There's absolutely more interest from 273 00:13:30,400 --> 00:13:34,320 Speaker 1: institutions in crypto now than there was. I mean when 274 00:13:34,360 --> 00:13:36,599 Speaker 1: the market rolled over, institutions basically said, okay, well that 275 00:13:36,640 --> 00:13:38,360 Speaker 1: thing went away, see you later, not don't need to 276 00:13:38,360 --> 00:13:41,400 Speaker 1: worry about that. You saw really aggressive moves to pull out, 277 00:13:41,440 --> 00:13:44,320 Speaker 1: such as something like the cbo E killing their bitcoin future. 278 00:13:44,800 --> 00:13:47,640 Speaker 1: I don't know that, but I would imagine that it's 279 00:13:47,679 --> 00:13:50,000 Speaker 1: costs about as much to kill a bitcoin future as 280 00:13:50,040 --> 00:13:52,079 Speaker 1: it does to just leave it. So you know, there 281 00:13:52,160 --> 00:13:55,040 Speaker 1: was a real kind of dissociation with the space, which 282 00:13:55,040 --> 00:13:57,440 Speaker 1: you're also seeing right now. But then you are also 283 00:13:57,480 --> 00:14:00,600 Speaker 1: seeing other other organizations that are viewing this as an opportunity. 284 00:14:00,920 --> 00:14:03,560 Speaker 1: You have you know, well known independent investment banks like 285 00:14:03,600 --> 00:14:05,480 Speaker 1: Mollis that announced that they were going to be doing 286 00:14:05,760 --> 00:14:07,920 Speaker 1: merchant banking style activities in space. And this is post 287 00:14:08,040 --> 00:14:10,840 Speaker 1: Luna and Celsius. Man Group came out last week and 288 00:14:10,840 --> 00:14:12,959 Speaker 1: said that they were launching edge fund. There are a 289 00:14:13,040 --> 00:14:16,080 Speaker 1: certain amount of institutional investors that are saying, okay, uh, 290 00:14:16,120 --> 00:14:18,080 Speaker 1: this space was run by a bunch of people who 291 00:14:18,080 --> 00:14:20,320 Speaker 1: didn't really know what they're doing. None of this is 292 00:14:20,360 --> 00:14:23,280 Speaker 1: Bitcoin's fault, right, you know, maybe you could argue that 293 00:14:23,440 --> 00:14:29,160 Speaker 1: the financial services around bitcoin have been extremely, extremely impacted, 294 00:14:29,560 --> 00:14:31,440 Speaker 1: and I've got it. I think I have a bunch 295 00:14:31,480 --> 00:14:36,600 Speaker 1: of thesis as to why that has happened so so aggressively. 296 00:14:37,000 --> 00:14:40,200 Speaker 1: But if you view bitcoin as a potentially, you know, 297 00:14:40,200 --> 00:14:43,320 Speaker 1: growing an alternative financial system, or or crypto as a whole, 298 00:14:43,320 --> 00:14:46,560 Speaker 1: developing an alternate financial system, I mean, just because someone 299 00:14:46,920 --> 00:14:49,920 Speaker 1: someone operating in exchange did so in a way that 300 00:14:50,000 --> 00:14:52,480 Speaker 1: was either as you said, incompetent or as also, as 301 00:14:52,960 --> 00:14:55,520 Speaker 1: you know, as many people think, fraudulent, I mean, it 302 00:14:55,520 --> 00:14:57,560 Speaker 1: doesn't change your thesis on the space. You just think, Okay, 303 00:14:57,600 --> 00:14:59,400 Speaker 1: these people didn't do it right, we can do it better. 304 00:14:59,600 --> 00:15:02,720 Speaker 1: So it's a it's a mix. It's definitely the sentiment 305 00:15:02,800 --> 00:15:05,120 Speaker 1: is horrible, but there are some at least this time 306 00:15:05,120 --> 00:15:07,400 Speaker 1: that are that are sticking with it. Is there more 307 00:15:07,440 --> 00:15:09,360 Speaker 1: contagion to come? Do you think, I mean, have all 308 00:15:09,400 --> 00:15:12,320 Speaker 1: the sort of shoes drop that that are about to 309 00:15:12,400 --> 00:15:14,840 Speaker 1: drop from FTX, or do do you think there's more 310 00:15:15,240 --> 00:15:19,040 Speaker 1: sort of bad news ahead in the space? Well, I 311 00:15:19,040 --> 00:15:22,680 Speaker 1: think that the Genesis news is really really bad news, 312 00:15:22,800 --> 00:15:25,480 Speaker 1: and that itself could create knock on effects that you 313 00:15:25,520 --> 00:15:28,200 Speaker 1: know in firms that you know haven't quite played out yet. 314 00:15:28,840 --> 00:15:30,640 Speaker 1: I do think that there's going to be more bad 315 00:15:30,720 --> 00:15:34,440 Speaker 1: news amongst kind of smaller almost definitely amongst kind of 316 00:15:34,440 --> 00:15:37,440 Speaker 1: midsize smaller firms will be more bad news because there, 317 00:15:37,480 --> 00:15:40,040 Speaker 1: you know, everyone's kind of jumping all over firms right 318 00:15:40,040 --> 00:15:42,080 Speaker 1: now that haven't kind of given there, you know, there 319 00:15:42,160 --> 00:15:44,560 Speaker 1: I'm safe. I'm not safe thing. But the reality is 320 00:15:44,680 --> 00:15:47,120 Speaker 1: that those are a little bit those are complicated terminations 321 00:15:47,120 --> 00:15:49,600 Speaker 1: to make. In some cases, maybe you're a firm that 322 00:15:49,640 --> 00:15:51,920 Speaker 1: has a lot of investments with different you know, funds, 323 00:15:51,960 --> 00:15:55,160 Speaker 1: and you have to wait till they communicate with you, you 324 00:15:54,640 --> 00:15:57,760 Speaker 1: you know fully, and if someone's trying to figure their 325 00:15:57,760 --> 00:15:59,280 Speaker 1: situation out and is a little slow, then you don't 326 00:15:59,320 --> 00:16:01,840 Speaker 1: feel comfortable with having your full communication yet in terms 327 00:16:01,840 --> 00:16:03,120 Speaker 1: of what you're doing, because you only want to do 328 00:16:03,120 --> 00:16:06,360 Speaker 1: it once, right. So there, there's definitely going to be 329 00:16:06,360 --> 00:16:09,840 Speaker 1: more bankruptcies. I feel as though, you know, just given 330 00:16:09,880 --> 00:16:12,680 Speaker 1: the market pricing, the market price what you see with 331 00:16:12,760 --> 00:16:15,960 Speaker 1: Genesis essentially saying that there's a very strong chance that 332 00:16:16,000 --> 00:16:19,320 Speaker 1: they will declare bankruptcy and seeing relatively little market impact. 333 00:16:19,840 --> 00:16:22,160 Speaker 1: I think that a lot of the kind of mid 334 00:16:22,240 --> 00:16:26,680 Speaker 1: size to large bankruptcies have been somewhat priced in. I 335 00:16:26,720 --> 00:16:30,000 Speaker 1: think if another major exchange platform was also found to 336 00:16:30,000 --> 00:16:32,440 Speaker 1: be insolvent, that would create a whole bunch of other issues. 337 00:16:32,480 --> 00:16:36,280 Speaker 1: But so far, so good on that front. But definitely 338 00:16:36,760 --> 00:16:39,000 Speaker 1: everyone's pulling back their their capital to what they believe 339 00:16:39,040 --> 00:16:41,200 Speaker 1: to be the safest corners of whatever they have access 340 00:16:41,240 --> 00:16:43,960 Speaker 1: to and are just waiting to see what happens. So uh, 341 00:16:44,000 --> 00:16:45,760 Speaker 1: you know, I think that even if we don't get 342 00:16:45,760 --> 00:16:48,680 Speaker 1: any major bankruptcies for the next month or so, people 343 00:16:48,720 --> 00:16:51,120 Speaker 1: are still gonna wait and see, you know, until the 344 00:16:51,160 --> 00:16:54,120 Speaker 1: new year, at least until they start kind of redeploying 345 00:16:54,240 --> 00:16:57,360 Speaker 1: in a significant way. Okay, I have a difficult question 346 00:16:57,360 --> 00:17:00,920 Speaker 1: for you, which is that there's just so much interconnectedness 347 00:17:01,040 --> 00:17:03,480 Speaker 1: within the space. Can you actually just lay out, like 348 00:17:04,359 --> 00:17:07,960 Speaker 1: maybe the big picture of you layout for us, how 349 00:17:08,040 --> 00:17:11,840 Speaker 1: it is that there are knock on effects where you have, 350 00:17:12,440 --> 00:17:14,239 Speaker 1: you know, the collapse of f t X and what 351 00:17:14,280 --> 00:17:17,199 Speaker 1: it means for these other lenders or other exchanges, Like 352 00:17:17,240 --> 00:17:18,879 Speaker 1: how is it that that happened? Like what is it 353 00:17:18,920 --> 00:17:21,960 Speaker 1: about the crypto space that allowed that to to sort 354 00:17:22,000 --> 00:17:23,919 Speaker 1: of happen. Well, I would I would also say that 355 00:17:23,920 --> 00:17:26,040 Speaker 1: this is not unique to crypto, right, like there's there's 356 00:17:26,200 --> 00:17:30,160 Speaker 1: you know, the interconnectiveness of financial markets is there everywhere, 357 00:17:30,200 --> 00:17:31,960 Speaker 1: and in fact, a lot of what a lot of 358 00:17:31,960 --> 00:17:35,879 Speaker 1: what I think cause the honest failures, let's say, like 359 00:17:35,920 --> 00:17:39,800 Speaker 1: the honest failures is really just people bringing things like 360 00:17:39,880 --> 00:17:42,639 Speaker 1: unsecured lending into the crypto space, Like, well, before this 361 00:17:42,760 --> 00:17:45,159 Speaker 1: market's ready for something like that, And you know, the 362 00:17:45,200 --> 00:17:48,040 Speaker 1: biggest move from Wall Street employees we've seen into the 363 00:17:48,080 --> 00:17:50,639 Speaker 1: crypto space, I think a lot of people just pulled 364 00:17:50,640 --> 00:17:53,320 Speaker 1: out their old Wall Street playbook and started applying it 365 00:17:53,359 --> 00:17:55,920 Speaker 1: to crypto and some of the stuff the markets ready 366 00:17:55,960 --> 00:17:57,600 Speaker 1: for and some of the stuff the market isn't. So 367 00:17:57,640 --> 00:18:00,240 Speaker 1: I think a large part of kind of the like said, 368 00:18:00,280 --> 00:18:03,199 Speaker 1: the honest failures, we're just implying allowing business practices like 369 00:18:03,280 --> 00:18:05,280 Speaker 1: un secure lending that just don't work right now. I mean, 370 00:18:05,840 --> 00:18:08,120 Speaker 1: this is an asset class where if you own five 371 00:18:08,160 --> 00:18:11,480 Speaker 1: assets in your portfolio, they could go to zero within 372 00:18:11,560 --> 00:18:13,480 Speaker 1: a couple of days. Right, It's just and that's just 373 00:18:13,560 --> 00:18:16,640 Speaker 1: not something that you typically see at scale and traditional 374 00:18:16,680 --> 00:18:19,240 Speaker 1: finance like you do in crypto. But what's happening, you know, 375 00:18:19,280 --> 00:18:22,280 Speaker 1: the the actual kind of knock on operational effects are 376 00:18:22,720 --> 00:18:25,960 Speaker 1: I mean, it's relatively simple. It's it's say, I you know, 377 00:18:26,040 --> 00:18:27,840 Speaker 1: if you were a fund that was involved in the 378 00:18:27,840 --> 00:18:29,720 Speaker 1: ft X bankruptcy and you were using them as a 379 00:18:29,720 --> 00:18:32,560 Speaker 1: massive counterparty. Okay, well, first of all, you may just 380 00:18:32,600 --> 00:18:34,639 Speaker 1: have so much of your assets tied up on that 381 00:18:34,680 --> 00:18:37,639 Speaker 1: platform and written it down to zero that you just 382 00:18:37,760 --> 00:18:40,320 Speaker 1: wind down your operation altogether, right because you said, okay, 383 00:18:40,400 --> 00:18:42,560 Speaker 1: I lost of my assets, we're writing them all down 384 00:18:42,600 --> 00:18:45,159 Speaker 1: to zero. And ft X, you know what seems apparent 385 00:18:45,200 --> 00:18:47,040 Speaker 1: now is we're going to go through a long bankruptcy 386 00:18:47,119 --> 00:18:49,280 Speaker 1: that's probably gonna end up being a zero. I'll give 387 00:18:49,280 --> 00:18:52,240 Speaker 1: my my investors back the little money that's left and 388 00:18:52,440 --> 00:18:54,399 Speaker 1: call it a day. So that's kind of like the 389 00:18:54,400 --> 00:18:58,040 Speaker 1: most vanilla unwind. Then you get into situations where say 390 00:18:58,160 --> 00:19:00,960 Speaker 1: you had debt, you were you were using leverage in 391 00:19:01,000 --> 00:19:03,400 Speaker 1: your in your fund. Well, now you may not even 392 00:19:03,400 --> 00:19:05,720 Speaker 1: have the opportunity to give back money to equity holders 393 00:19:05,720 --> 00:19:08,560 Speaker 1: because debt holders that stand in advance of your equity holders, 394 00:19:08,560 --> 00:19:10,720 Speaker 1: and so you know, your dead holders say, we're taking 395 00:19:10,720 --> 00:19:12,600 Speaker 1: whatever you have left and your equity holders are wiped out. 396 00:19:12,600 --> 00:19:16,000 Speaker 1: So that's another version of a bankruptcy. The Genesis situation, 397 00:19:17,200 --> 00:19:19,520 Speaker 1: to me, is still quite complicated in terms of what 398 00:19:19,640 --> 00:19:22,680 Speaker 1: really happened there. I think that you know, clearly they 399 00:19:22,680 --> 00:19:26,720 Speaker 1: were extremely impacted by the Three Arrows bankruptcy. They released 400 00:19:26,720 --> 00:19:29,119 Speaker 1: that they had six d some odd million of exposure 401 00:19:29,119 --> 00:19:32,200 Speaker 1: to them, and I mean Three Arrows has been accused 402 00:19:32,240 --> 00:19:35,119 Speaker 1: of kind of you know, taking taking an asset and 403 00:19:35,280 --> 00:19:38,360 Speaker 1: and depausing his collateral of multiple platforms, which would if 404 00:19:38,359 --> 00:19:41,040 Speaker 1: that was true, that would be fraud. So you know, 405 00:19:41,200 --> 00:19:45,040 Speaker 1: Genesis may the Genesis collapse may also have been have 406 00:19:45,160 --> 00:19:48,040 Speaker 1: been the subject of other frauds as well. It could 407 00:19:48,040 --> 00:19:49,959 Speaker 1: have been fraud could have played a role into that. 408 00:19:50,160 --> 00:19:52,440 Speaker 1: So I think, you know, the two kind of things 409 00:19:52,480 --> 00:19:55,200 Speaker 1: that are there's two components that are that are leading 410 00:19:55,200 --> 00:19:59,280 Speaker 1: to these collapses. One is over leverage and poor risk management, 411 00:19:59,280 --> 00:20:01,360 Speaker 1: which I think is very very evident in the miners right. 412 00:20:01,480 --> 00:20:03,760 Speaker 1: The miners, a lot of them don't seem to have 413 00:20:03,800 --> 00:20:06,840 Speaker 1: modeled bitcoin price below thirty thousand for a persistently long 414 00:20:06,880 --> 00:20:09,880 Speaker 1: time at all where their business would effectively evaporate, which 415 00:20:09,880 --> 00:20:12,920 Speaker 1: has happened. You know, you have definitely things that smell 416 00:20:12,960 --> 00:20:14,880 Speaker 1: a lot like fraud going on in the space, which 417 00:20:14,920 --> 00:20:17,679 Speaker 1: is which is another component and so and then you 418 00:20:17,760 --> 00:20:20,080 Speaker 1: just have this cascading effect of you know, if I 419 00:20:20,160 --> 00:20:21,840 Speaker 1: lend to this minor and they go out of business, 420 00:20:21,840 --> 00:20:23,240 Speaker 1: do I go out to business, I can't pay my 421 00:20:23,280 --> 00:20:25,879 Speaker 1: dad's etcetera. And it just then it becomes quite a 422 00:20:25,920 --> 00:20:31,480 Speaker 1: traditional financial you know, like a contagion like environment. Yeah. 423 00:20:31,640 --> 00:20:35,280 Speaker 1: I wonder how the space will have changed once all 424 00:20:35,320 --> 00:20:37,680 Speaker 1: the dust settles from this. You know. Obviously, I think 425 00:20:37,720 --> 00:20:41,000 Speaker 1: the issue of an exchange being so closely tied to 426 00:20:41,080 --> 00:20:44,200 Speaker 1: a trading firm is a big deal. Uh. There's a 427 00:20:44,240 --> 00:20:47,880 Speaker 1: lot of talk about how exchanges should have to uh 428 00:20:48,520 --> 00:20:51,320 Speaker 1: sort of show proof of what reserves they have, that 429 00:20:51,400 --> 00:20:53,680 Speaker 1: sort of thing. Where Like, where do you see the 430 00:20:54,160 --> 00:21:00,159 Speaker 1: industry going from the centralized exchange perspective, especially after all this. 431 00:21:00,280 --> 00:21:02,600 Speaker 1: I mean, I'm guessing it's gonna look a lot different 432 00:21:02,640 --> 00:21:05,480 Speaker 1: than what it did prior. Yeah, there's been a lot 433 00:21:05,560 --> 00:21:07,480 Speaker 1: of kind of I would say, jumping the gun on 434 00:21:07,840 --> 00:21:10,320 Speaker 1: talking about oh well this means that defy is the 435 00:21:10,359 --> 00:21:11,760 Speaker 1: way to go toes centralize change of the way to 436 00:21:11,800 --> 00:21:13,920 Speaker 1: go Okay, a little bit early for the de centralized 437 00:21:13,960 --> 00:21:16,040 Speaker 1: exchange crowd to be doing a victory lap after about 438 00:21:16,080 --> 00:21:18,800 Speaker 1: fift of assets were hacked out of that ecosystem last year, 439 00:21:18,840 --> 00:21:21,000 Speaker 1: and you know, they had their own collapses and all 440 00:21:21,000 --> 00:21:23,600 Speaker 1: of that. So de centralized exchanges in a lot of 441 00:21:23,600 --> 00:21:26,320 Speaker 1: ways are very new technology, and I would and I 442 00:21:26,320 --> 00:21:28,919 Speaker 1: would argue, you know, aren't ready to be the core 443 00:21:29,359 --> 00:21:31,800 Speaker 1: of any kind of financial ecosystem. Maybe in the future, 444 00:21:31,840 --> 00:21:34,280 Speaker 1: but right now that's a little early. So, you know, 445 00:21:34,640 --> 00:21:39,240 Speaker 1: unless everyone's going to start passing around ledgers like hardware 446 00:21:39,280 --> 00:21:41,280 Speaker 1: wallets and stuff like that, there is some kind of 447 00:21:41,680 --> 00:21:44,359 Speaker 1: centralized exchange infrastructure that needs to persist so that that 448 00:21:44,600 --> 00:21:46,760 Speaker 1: so that people can continue to transact in biitcoin and 449 00:21:46,760 --> 00:21:50,080 Speaker 1: whatever their cryptocurrancies they're interested in. There's a very strong 450 00:21:50,280 --> 00:21:52,840 Speaker 1: argument to say that regulation will be important, and I 451 00:21:52,880 --> 00:21:55,119 Speaker 1: am one of the people that you know that that 452 00:21:55,200 --> 00:21:58,439 Speaker 1: also thinks that regulation would help because the reality is 453 00:21:58,440 --> 00:22:00,760 Speaker 1: is that there's a lot of discipants in the bitcoin 454 00:22:00,800 --> 00:22:03,119 Speaker 1: ecosystem that really can't do their own due diligence or 455 00:22:03,119 --> 00:22:05,199 Speaker 1: don't feel comortable doing their own diligence. Doesn't matter how 456 00:22:05,200 --> 00:22:08,200 Speaker 1: many financial proof of reserves or balance sheets the show 457 00:22:08,240 --> 00:22:10,560 Speaker 1: in front of them. They're never gonna understand whether or 458 00:22:10,640 --> 00:22:12,679 Speaker 1: not that the exchange should be worked with or not. 459 00:22:13,119 --> 00:22:15,960 Speaker 1: And for those people to have kind of a regulated 460 00:22:16,040 --> 00:22:19,040 Speaker 1: avenue in crypto, like within crypto, to participate in the 461 00:22:19,040 --> 00:22:21,440 Speaker 1: space where they can feel comfortable that the same controls 462 00:22:21,480 --> 00:22:23,400 Speaker 1: are there versus what they're familiar with in the other 463 00:22:23,440 --> 00:22:26,680 Speaker 1: financial ecosystem I think will help the adoption of bitcoin, 464 00:22:27,240 --> 00:22:30,399 Speaker 1: uh and other cryptocurrencies. But that can't be just it. 465 00:22:30,560 --> 00:22:34,440 Speaker 1: Regulation is not a panacea in in this context. The regulators, 466 00:22:35,080 --> 00:22:37,359 Speaker 1: you know, can't play whack a mole with every single 467 00:22:37,400 --> 00:22:39,600 Speaker 1: platform that just pops up. I mean, this is a 468 00:22:39,600 --> 00:22:43,440 Speaker 1: relatively new paradigm. You've got an environment where anybody can 469 00:22:43,440 --> 00:22:46,600 Speaker 1: start their own exchange overnight. This is a new phenomenon. 470 00:22:46,720 --> 00:22:48,440 Speaker 1: This isn't something that was around in the eighties. You 471 00:22:48,440 --> 00:22:51,760 Speaker 1: couldn't just launch an exchange for very little cost overnight 472 00:22:51,760 --> 00:22:55,040 Speaker 1: and get into business. Right, So this is how a 473 00:22:55,160 --> 00:22:57,920 Speaker 1: free market educates itself. If you look at the if 474 00:22:57,920 --> 00:22:59,800 Speaker 1: you look at the if you look at this evolution 475 00:22:59,840 --> 00:23:02,119 Speaker 1: of a kind of new financial system as a hundred 476 00:23:02,200 --> 00:23:04,560 Speaker 1: year cycle, right, doesn't make sense that there would be 477 00:23:04,600 --> 00:23:07,200 Speaker 1: a two year period where no one really understood the 478 00:23:07,240 --> 00:23:09,959 Speaker 1: elements of counterparty risk because they're used to dealing with 479 00:23:10,359 --> 00:23:13,960 Speaker 1: completely fully regulated ecosystem and they kind of have to learn, right, 480 00:23:14,160 --> 00:23:17,320 Speaker 1: you know, hopefully the next time, you know, uh, an 481 00:23:17,359 --> 00:23:20,080 Speaker 1: SPF comes around, everyone doesn't just like just take him 482 00:23:20,080 --> 00:23:22,000 Speaker 1: at his word no matter what, and there's a little 483 00:23:22,040 --> 00:23:25,479 Speaker 1: bit more critical, critical, critical discussion around whether or not 484 00:23:25,520 --> 00:23:28,040 Speaker 1: this person should be as trusted as they are. And 485 00:23:28,280 --> 00:23:31,000 Speaker 1: you know, I think proof of reserves is a good step, 486 00:23:31,040 --> 00:23:34,680 Speaker 1: it doesn't fully create the the what you need because 487 00:23:34,680 --> 00:23:37,560 Speaker 1: you need some visibility to in to exchange liabilities as well. 488 00:23:37,600 --> 00:23:39,840 Speaker 1: You know, just because in Exchange has fifty billion, if 489 00:23:39,840 --> 00:23:41,840 Speaker 1: their liabilities are a hundred, it doesn't you know, you 490 00:23:41,880 --> 00:23:45,600 Speaker 1: still have an issue there. So those transparency structures I 491 00:23:45,600 --> 00:23:48,280 Speaker 1: think are going to evolve. But then that then people 492 00:23:48,720 --> 00:23:51,240 Speaker 1: need to go to those platforms that are being more transparent. 493 00:23:51,359 --> 00:23:54,040 Speaker 1: People have to choose that they want that. If we 494 00:23:54,080 --> 00:23:56,440 Speaker 1: get into another market cycle where you know, coin Base 495 00:23:56,600 --> 00:23:58,400 Speaker 1: and you know, all these other firms that have committed 496 00:23:58,400 --> 00:24:00,760 Speaker 1: to transparency aren't getting the asset, it's because they don't 497 00:24:00,800 --> 00:24:04,400 Speaker 1: have the The newest defy yield farming thing. Then it's 498 00:24:04,400 --> 00:24:07,440 Speaker 1: hard to really sympathize, right, It's it's the typical investor 499 00:24:07,520 --> 00:24:10,240 Speaker 1: has to learn. And then what happens with with why 500 00:24:10,280 --> 00:24:12,600 Speaker 1: institutions kind of get hit or market makers is really 501 00:24:12,600 --> 00:24:15,879 Speaker 1: what institutions are in this context is that they kind 502 00:24:15,880 --> 00:24:17,399 Speaker 1: of have to just go where retail is. I mean, 503 00:24:17,480 --> 00:24:19,800 Speaker 1: you can say I'm not gonna use ft X at all, 504 00:24:19,920 --> 00:24:21,760 Speaker 1: but when it has all the volume there, I mean, 505 00:24:21,760 --> 00:24:25,120 Speaker 1: you're highly incentivized to to have to you know, that's 506 00:24:25,160 --> 00:24:27,160 Speaker 1: your business that you get involved in that, right, So 507 00:24:27,520 --> 00:24:31,080 Speaker 1: you know, retail needs to needs to understand that there 508 00:24:31,240 --> 00:24:33,800 Speaker 1: is no you know, there's no there's no one that's 509 00:24:33,800 --> 00:24:35,360 Speaker 1: going to save you in this market. There's no one. 510 00:24:35,520 --> 00:24:38,120 Speaker 1: You know, it's your your very limited recourse if something 511 00:24:38,119 --> 00:24:40,560 Speaker 1: goes wrong and you really need to do your due diligence. 512 00:24:40,560 --> 00:24:43,240 Speaker 1: And if one platform is transparent and another platform is not, 513 00:24:43,359 --> 00:24:46,000 Speaker 1: then you gotta go with a transparent one or else 514 00:24:46,040 --> 00:25:03,760 Speaker 1: you run this huge risk. Can I ask you what 515 00:25:03,840 --> 00:25:06,960 Speaker 1: in reality regulation would look like because obviously we're talking 516 00:25:07,000 --> 00:25:10,560 Speaker 1: big picture, but like what specifically would be regulated? And 517 00:25:10,720 --> 00:25:13,360 Speaker 1: I want to ask this question of you specifically because 518 00:25:13,440 --> 00:25:15,719 Speaker 1: you have you know what things are like in Canada, 519 00:25:15,760 --> 00:25:17,080 Speaker 1: you know what things are like in the US and 520 00:25:17,119 --> 00:25:19,439 Speaker 1: obviously in the Bahamas and other places as well. Yeah, so, 521 00:25:19,480 --> 00:25:22,480 Speaker 1: I mean our platforms relatively straightforward to regulate, to be honest, 522 00:25:22,480 --> 00:25:25,040 Speaker 1: Like we're basically taking kind of drivative structures that have 523 00:25:25,280 --> 00:25:28,920 Speaker 1: like driving structures that do fit in the existing regulatory framework. 524 00:25:29,240 --> 00:25:32,040 Speaker 1: The problem with a lot of this regulatory discussion is 525 00:25:32,040 --> 00:25:34,199 Speaker 1: that they're trying to take like an equity framework and 526 00:25:34,240 --> 00:25:37,280 Speaker 1: apply it to you cryptocurrency, or take commodity framework and 527 00:25:37,280 --> 00:25:40,680 Speaker 1: applied to cryptocurrency, and it's just it's it's it's it's 528 00:25:40,720 --> 00:25:44,040 Speaker 1: a struggle to kind of to to fit these these 529 00:25:44,160 --> 00:25:47,080 Speaker 1: round holes into square pegs right for it typically for 530 00:25:47,240 --> 00:25:51,000 Speaker 1: the for retail exchanges. And in addition to that, you know, 531 00:25:51,080 --> 00:25:54,240 Speaker 1: if the if the retail traders, if you limit the 532 00:25:54,280 --> 00:25:58,760 Speaker 1: activities that are available on one exchange, right, then you know, 533 00:25:58,800 --> 00:26:01,159 Speaker 1: it incentivizes people to go sure, and then you know, 534 00:26:01,200 --> 00:26:03,200 Speaker 1: that's been a criticism of the regulatory environment and the 535 00:26:03,280 --> 00:26:05,359 Speaker 1: US that they didn't move fast enough and was forced 536 00:26:05,359 --> 00:26:07,560 Speaker 1: people off shore. Now I don't buy that entirely. You know, 537 00:26:07,760 --> 00:26:09,840 Speaker 1: everyone could have traded on coin based which looks to 538 00:26:09,880 --> 00:26:13,760 Speaker 1: be fine. They just wanted to get more access to leverage, etcetera, etcetera. 539 00:26:14,040 --> 00:26:15,400 Speaker 1: You know you, I think that you have to look 540 00:26:15,440 --> 00:26:18,159 Speaker 1: at this this space with with fresh eyes. Unfortunately, you 541 00:26:18,200 --> 00:26:20,879 Speaker 1: probably have to re write a regulatory framework from the 542 00:26:20,880 --> 00:26:23,159 Speaker 1: ground up if it takes an account cryptocurrency. It's a 543 00:26:23,240 --> 00:26:25,240 Speaker 1: very difficult task. You know, there's not a lot of 544 00:26:25,280 --> 00:26:28,560 Speaker 1: regulators that even themselves would count themselves experts and cryptocurrency. 545 00:26:28,760 --> 00:26:31,120 Speaker 1: But if we want a regulatory framework that really applies 546 00:26:31,160 --> 00:26:32,800 Speaker 1: to what we're doing here, I mean, that kind of 547 00:26:32,800 --> 00:26:35,119 Speaker 1: thing needs to happen. You know. The really where the 548 00:26:36,160 --> 00:26:38,000 Speaker 1: regulators have focused on is like, oh, we don't want 549 00:26:38,000 --> 00:26:39,840 Speaker 1: this product, we don't want that product, we don't want 550 00:26:39,840 --> 00:26:42,840 Speaker 1: you know, I think that that is that's just it's silly, 551 00:26:42,920 --> 00:26:44,800 Speaker 1: like we look at the issue we had here. Who 552 00:26:44,880 --> 00:26:46,560 Speaker 1: cares what products they are? You need to make sure 553 00:26:46,600 --> 00:26:48,639 Speaker 1: that the exchanges had the assets that they claim to, 554 00:26:48,720 --> 00:26:51,399 Speaker 1: like those are the key controls, right, so that all 555 00:26:51,480 --> 00:26:53,600 Speaker 1: this discussion around like oh there's too much leverage, retails 556 00:26:53,600 --> 00:26:55,479 Speaker 1: is gonna blow themselves up. It's like, well, if they 557 00:26:55,760 --> 00:26:57,840 Speaker 1: if they traded on this platform, they blew themselves up. 558 00:26:57,880 --> 00:26:59,760 Speaker 1: The trick too much leverage, I can get my head 559 00:26:59,760 --> 00:27:01,919 Speaker 1: around that if they traded on a platform, because and 560 00:27:02,000 --> 00:27:03,520 Speaker 1: it was a huge fought and the people didn't have 561 00:27:03,520 --> 00:27:05,359 Speaker 1: the assets, you know, that's a whole different story, and 562 00:27:05,359 --> 00:27:08,600 Speaker 1: that's where regulators should come in, right. Yeah, I wanted 563 00:27:08,640 --> 00:27:10,840 Speaker 1: to rewind a little bit, Steffan and talk about that 564 00:27:10,920 --> 00:27:13,000 Speaker 1: notion of yield farming that you brought up. You know, 565 00:27:13,560 --> 00:27:16,760 Speaker 1: whether uh, you know, we're talking about locking up your 566 00:27:16,760 --> 00:27:20,919 Speaker 1: tokens at a centralized finance platform or even you know, 567 00:27:21,040 --> 00:27:24,480 Speaker 1: depositing them with um a high yield account that's say 568 00:27:24,800 --> 00:27:28,440 Speaker 1: Gemini or one of these centralized counterparties. Where do you 569 00:27:28,480 --> 00:27:31,240 Speaker 1: see that whole space going. You know, so many people 570 00:27:31,280 --> 00:27:33,640 Speaker 1: criticize these high yields is too good to be true? 571 00:27:33,720 --> 00:27:36,280 Speaker 1: I mean, are they truly too good to be true? 572 00:27:36,600 --> 00:27:39,480 Speaker 1: Or is there a way to do this that's um yeah, 573 00:27:39,480 --> 00:27:42,600 Speaker 1: I mean it's definitely a nuanced question. And you're entirely right. 574 00:27:42,600 --> 00:27:44,879 Speaker 1: There are ways to actually get yields in crypto, and 575 00:27:44,920 --> 00:27:47,920 Speaker 1: then there are ways that are completely fictitious. And top 576 00:27:47,960 --> 00:27:50,600 Speaker 1: of the list and fictitious yields is yield farming. I mean, 577 00:27:50,640 --> 00:27:52,520 Speaker 1: I don't think there's a lot of yield farming supporters 578 00:27:52,600 --> 00:27:55,280 Speaker 1: left to be honest with with what's happened. You know, 579 00:27:55,359 --> 00:27:57,480 Speaker 1: this was a dynamic that we saw kind of emerge 580 00:27:57,680 --> 00:28:00,920 Speaker 1: very like, very from the ground. You know, the whole 581 00:28:00,920 --> 00:28:05,240 Speaker 1: decentralized exchange model was considered a bit of an afterthought 582 00:28:05,240 --> 00:28:08,520 Speaker 1: and cryptocurrency and interesting experiment for the future, and it 583 00:28:08,560 --> 00:28:12,840 Speaker 1: all really changed in the summer of I believe that 584 00:28:12,880 --> 00:28:15,280 Speaker 1: the first platform that did this was Compound Finance, where 585 00:28:15,320 --> 00:28:20,760 Speaker 1: they launched a comp token where you would deposit bitcoin, eth, 586 00:28:21,119 --> 00:28:24,439 Speaker 1: you know, stable cooin, other mature assets and receive comp token. 587 00:28:24,800 --> 00:28:26,680 Speaker 1: And because we are in the middle of a bowl market, 588 00:28:26,680 --> 00:28:28,240 Speaker 1: I don't want to beat up on comp token. They 589 00:28:28,280 --> 00:28:30,280 Speaker 1: seem like religive, you know. I mean, I haven't had 590 00:28:30,320 --> 00:28:32,120 Speaker 1: any occase and they're not honest operators. But all these 591 00:28:32,160 --> 00:28:35,280 Speaker 1: ut plumbing platforms, you deposit bitcoin and they'd start paying 592 00:28:35,280 --> 00:28:39,120 Speaker 1: you in their token, which they invented like weeks ago 593 00:28:39,480 --> 00:28:41,840 Speaker 1: and is now trading for whatever reason. Because we're in 594 00:28:41,880 --> 00:28:44,400 Speaker 1: the middle of an insane crypto market at a multibillion 595 00:28:44,440 --> 00:28:48,680 Speaker 1: dollar valuation, so yes, your yields are high in this 596 00:28:48,840 --> 00:28:53,480 Speaker 1: token that has evaluation that's unsustainable, right, So and when 597 00:28:53,520 --> 00:28:56,560 Speaker 1: the market sells off, okay, then all of a sudden 598 00:28:56,560 --> 00:29:00,640 Speaker 1: If Okay, you got token worth of a project where 599 00:29:00,640 --> 00:29:03,320 Speaker 1: two billion. If if if the token collapses and the 600 00:29:03,360 --> 00:29:06,280 Speaker 1: market cap of it is now fifty million, what's your 601 00:29:06,360 --> 00:29:09,760 Speaker 1: yield now, it's probably pretty bad, right. And in addition 602 00:29:09,800 --> 00:29:11,840 Speaker 1: to the fact that there's all these other issues that 603 00:29:11,880 --> 00:29:15,000 Speaker 1: have come up with DeFi because it's an experimental situation, 604 00:29:15,080 --> 00:29:18,120 Speaker 1: such as regulatory risk, hack risk, etcetera. If you take 605 00:29:18,160 --> 00:29:19,960 Speaker 1: all of that and you add it all together, the 606 00:29:20,040 --> 00:29:24,440 Speaker 1: yields are probably negative, right, And so so the whole 607 00:29:24,480 --> 00:29:28,040 Speaker 1: yield farming dynamic needs I I don't think it has 608 00:29:28,120 --> 00:29:29,960 Speaker 1: much of a as much of a future it was 609 00:29:29,960 --> 00:29:33,520 Speaker 1: really and it really kind of pushed the defy exchanges 610 00:29:33,640 --> 00:29:36,520 Speaker 1: and platforms. You know that the argument for defy exchange 611 00:29:36,720 --> 00:29:39,520 Speaker 1: decentralized exchanges is self custody in a lot of cases, 612 00:29:39,520 --> 00:29:42,080 Speaker 1: which is which is a which is you know, as 613 00:29:42,120 --> 00:29:46,560 Speaker 1: we've seen, definitely a value add use case. There's other 614 00:29:46,640 --> 00:29:49,840 Speaker 1: elements that you know that I would say that the 615 00:29:49,920 --> 00:29:52,280 Speaker 1: DeFi crosism needs to kind of figure out. But anyways, 616 00:29:52,600 --> 00:29:54,920 Speaker 1: and then and then moving into the centralized lending, which 617 00:29:54,920 --> 00:29:56,720 Speaker 1: was the other element that you that you discussed, I 618 00:29:56,760 --> 00:29:59,920 Speaker 1: mean that should be that should be fine. I mean, 619 00:30:00,320 --> 00:30:05,280 Speaker 1: centralized lending itself is a risk management exercise, right. It's saying, hey, 620 00:30:05,320 --> 00:30:08,960 Speaker 1: I'm lending you. You know, a safe form of lending, right, 621 00:30:09,040 --> 00:30:12,800 Speaker 1: would be if someone lent me overcollateralized you with U 622 00:30:12,880 --> 00:30:15,360 Speaker 1: S dollars because they wanted to borrow bitcoin or some 623 00:30:15,440 --> 00:30:19,120 Speaker 1: other asset and you're overcollateralized, and because I or I 624 00:30:19,200 --> 00:30:21,920 Speaker 1: lend you bitcoin overcollateralized to get US dollars because I 625 00:30:21,960 --> 00:30:23,880 Speaker 1: don't want to lose my upside on bitcoin, but I 626 00:30:23,920 --> 00:30:25,960 Speaker 1: need U S dollars for right now, Okay, that kind 627 00:30:25,960 --> 00:30:28,440 Speaker 1: of stuff can be risk managed, right And and and 628 00:30:28,480 --> 00:30:30,920 Speaker 1: if you have kind of segregated accounts there you have 629 00:30:31,000 --> 00:30:33,840 Speaker 1: access to you can you can manage that stuff. There 630 00:30:33,880 --> 00:30:37,000 Speaker 1: are other real ways to get yields, such as people 631 00:30:37,480 --> 00:30:39,880 Speaker 1: like you know, peer to peer lending markets on exchanges 632 00:30:39,880 --> 00:30:42,959 Speaker 1: like bitfin x. Those things have held up amazing if 633 00:30:43,080 --> 00:30:45,280 Speaker 1: if if you believe bitin x is a solid counter party, 634 00:30:45,320 --> 00:30:47,960 Speaker 1: which which I do, then the peer to peer lending 635 00:30:48,000 --> 00:30:52,320 Speaker 1: markets have worked perfectly. And that's really just people either 636 00:30:52,400 --> 00:30:54,680 Speaker 1: borrowing stable coin because they want to go margin long 637 00:30:54,960 --> 00:30:57,160 Speaker 1: or boring crypto because they want to go short. And 638 00:30:57,240 --> 00:31:00,640 Speaker 1: that's really what's created yields, Like historically it's it's all 639 00:31:00,680 --> 00:31:03,320 Speaker 1: based off this kind of borrow lend lend margin long 640 00:31:03,560 --> 00:31:06,960 Speaker 1: short dynamic. That's why you can get yields in option markets. 641 00:31:07,000 --> 00:31:09,440 Speaker 1: That's the same thing that you can get yield trading basis. 642 00:31:09,640 --> 00:31:13,360 Speaker 1: I mean, those are all very real opportunities that unfortunately 643 00:31:13,560 --> 00:31:16,200 Speaker 1: are getting a little bit noised out right now because 644 00:31:16,240 --> 00:31:19,160 Speaker 1: of these blending dynamics that have exploded, and it's made 645 00:31:19,200 --> 00:31:20,960 Speaker 1: our pitch a little bit tougher for our clients because 646 00:31:21,000 --> 00:31:22,959 Speaker 1: we think those are great trades they should be involved in, 647 00:31:23,080 --> 00:31:26,040 Speaker 1: right So, you know, I think that over time will 648 00:31:26,160 --> 00:31:29,400 Speaker 1: be able to do the education process again. Have this 649 00:31:29,480 --> 00:31:32,400 Speaker 1: discussion explained that, Like, yes, that wasn't a real dynamic. 650 00:31:32,480 --> 00:31:34,440 Speaker 1: This is and we'll get back to it, but obviously 651 00:31:34,480 --> 00:31:36,960 Speaker 1: it's going to take a little time. Speaking of that, 652 00:31:37,000 --> 00:31:40,120 Speaker 1: I actually wanted to ask you what specifically your clients 653 00:31:40,120 --> 00:31:42,200 Speaker 1: are coming to you with, Like what are they asking 654 00:31:42,240 --> 00:31:44,360 Speaker 1: of you right now? And maybe you can talk a 655 00:31:44,360 --> 00:31:46,880 Speaker 1: little bit about what is going on in the market 656 00:31:46,880 --> 00:31:51,360 Speaker 1: in terms of how much things have scaled back exactly. Yeah, 657 00:31:51,480 --> 00:31:53,440 Speaker 1: So our clients are coming to us right now and 658 00:31:53,480 --> 00:31:56,920 Speaker 1: a couple of different different contexts they're coming to uh, 659 00:31:56,960 --> 00:31:58,960 Speaker 1: you know, they're they're speaking us a lot about physical 660 00:31:59,000 --> 00:32:02,360 Speaker 1: crypto trading because there's been a lot of their counterparties 661 00:32:02,400 --> 00:32:05,280 Speaker 1: that you know, aren't haven't made it, they can no 662 00:32:05,320 --> 00:32:08,080 Speaker 1: longer service them, so they're looking for new counterparties. There's 663 00:32:08,120 --> 00:32:10,120 Speaker 1: also a lot of people that were using FTX to 664 00:32:10,160 --> 00:32:14,120 Speaker 1: hedge themselves. You know, they're you know, cryptodesks that need 665 00:32:14,160 --> 00:32:17,239 Speaker 1: to hold balances so they can facilitate kind of you know, 666 00:32:17,480 --> 00:32:19,600 Speaker 1: their their whole all of their activity, and so they 667 00:32:19,600 --> 00:32:22,000 Speaker 1: don't want to just be long, you know, one asset 668 00:32:22,080 --> 00:32:24,120 Speaker 1: and have that move with their treasury, so they choose 669 00:32:24,160 --> 00:32:27,680 Speaker 1: to hedge. You know, miners off are you know, potentially hedging. 670 00:32:27,680 --> 00:32:30,040 Speaker 1: It's less of a market right now, But the advisory 671 00:32:30,080 --> 00:32:31,480 Speaker 1: side is really where we're getting a lot of the 672 00:32:31,520 --> 00:32:33,360 Speaker 1: interest right now. I mean, there's a lot of people 673 00:32:33,760 --> 00:32:37,400 Speaker 1: that have projects that are struggling to raise money right now, 674 00:32:37,480 --> 00:32:40,040 Speaker 1: and we have a really strong network of investors that 675 00:32:40,360 --> 00:32:44,040 Speaker 1: are going anywhere in crypto and are still very well capitalized. 676 00:32:44,280 --> 00:32:46,600 Speaker 1: So we're trying to make some introductions on that side. 677 00:32:46,960 --> 00:32:49,360 Speaker 1: There's people that are looking for a general statue overview 678 00:32:49,400 --> 00:32:51,480 Speaker 1: from us because they think we have, we're well positioned 679 00:32:51,480 --> 00:32:53,680 Speaker 1: in the market to judge is this business going to 680 00:32:53,760 --> 00:32:56,200 Speaker 1: work going forward is it not. You know, we're trying 681 00:32:56,240 --> 00:32:58,240 Speaker 1: to lend a hand where we can and some of 682 00:32:58,280 --> 00:33:01,560 Speaker 1: these various restructurings which we think we're very well suited 683 00:33:01,600 --> 00:33:03,600 Speaker 1: to do, and we are, you know, making a lot 684 00:33:03,600 --> 00:33:06,080 Speaker 1: of progress on that side. Um, we're in a nice 685 00:33:06,080 --> 00:33:08,280 Speaker 1: position here where where where the impact to us has 686 00:33:08,280 --> 00:33:12,040 Speaker 1: been relatively modest. So you know, we're not ourselves kind 687 00:33:12,040 --> 00:33:14,680 Speaker 1: of in a bunker right now. We can have conversations 688 00:33:14,720 --> 00:33:16,760 Speaker 1: with people and go out and try to help them out. 689 00:33:17,040 --> 00:33:19,120 Speaker 1: And so I would say that it's it's really kind 690 00:33:19,160 --> 00:33:22,000 Speaker 1: of advising the crypto native side. And we've seen a 691 00:33:22,000 --> 00:33:24,080 Speaker 1: lot of clients coming to us on the trading side 692 00:33:24,080 --> 00:33:27,479 Speaker 1: because their prior serius survivors have gone away. M hm. 693 00:33:28,160 --> 00:33:30,640 Speaker 1: So for for like the FTX case, would you you 694 00:33:30,680 --> 00:33:33,000 Speaker 1: could possibly work as an advisor to to one of 695 00:33:33,000 --> 00:33:35,720 Speaker 1: the debtors or one of the creditors rather Yeah, I 696 00:33:35,720 --> 00:33:38,600 Speaker 1: mean I don't want to get into the weeds too 697 00:33:38,640 --> 00:33:41,160 Speaker 1: much on that because there's just a lot going on. Unfortunately, 698 00:33:41,160 --> 00:33:43,560 Speaker 1: the situation was messy enough to begin with, and it 699 00:33:43,600 --> 00:33:46,120 Speaker 1: became messier just with how the whole thing's played out, 700 00:33:46,200 --> 00:33:50,440 Speaker 1: you know, from from not halting withdrawals when they probably 701 00:33:50,480 --> 00:33:52,360 Speaker 1: should have, to not shutting down the exchange when they 702 00:33:52,400 --> 00:33:54,760 Speaker 1: should have, and now there's money flowing in and out still. 703 00:33:54,800 --> 00:33:56,880 Speaker 1: But you know, we think that uh, you know, we 704 00:33:56,920 --> 00:33:59,680 Speaker 1: think we have some ideas for how this situation can 705 00:33:59,720 --> 00:34:02,240 Speaker 1: be man edged, and we encourage other institutions to reach 706 00:34:02,280 --> 00:34:05,080 Speaker 1: out and and kind of her ideas. But it is 707 00:34:05,120 --> 00:34:07,320 Speaker 1: there's a lot of competing interests in this right now, 708 00:34:07,840 --> 00:34:10,279 Speaker 1: and it's it's very difficult to even if you do 709 00:34:10,360 --> 00:34:14,560 Speaker 1: have something really valuable to contribute to to stand out. Um. 710 00:34:14,600 --> 00:34:16,560 Speaker 1: But you know, we think we we think will ultimately 711 00:34:16,960 --> 00:34:20,480 Speaker 1: we'll be able to provide some insights on on how 712 00:34:20,480 --> 00:34:24,600 Speaker 1: to manage some of the FTX situation in particular. Great, uh, 713 00:34:24,760 --> 00:34:27,279 Speaker 1: really appreciate your time stuff in Hey, at least you 714 00:34:27,280 --> 00:34:30,840 Speaker 1: know you get to get to a warmer uh climate 715 00:34:30,840 --> 00:34:36,919 Speaker 1: there for a little while. Yeah for Cape Toronto, good 716 00:34:36,960 --> 00:34:39,399 Speaker 1: time of year at least to be making making them 717 00:34:39,400 --> 00:34:42,879 Speaker 1: the switch. Well, U vil data, I think it's our 718 00:34:42,960 --> 00:34:45,440 Speaker 1: time now to get into the craziest things. You've got 719 00:34:45,440 --> 00:34:47,799 Speaker 1: something crazy for us so adjacent, but it's not really 720 00:34:47,840 --> 00:34:51,680 Speaker 1: about crypt job. But this is a boomerk headline. Actually, 721 00:34:51,760 --> 00:34:53,680 Speaker 1: I'm going to pose a question to you, Mike. All right, 722 00:34:54,800 --> 00:34:59,840 Speaker 1: if I told you the one person's wealth loss for 723 00:35:00,080 --> 00:35:02,719 Speaker 1: this year exceeds a hundred billion dollars, who would you 724 00:35:02,760 --> 00:35:08,080 Speaker 1: guess it is? A hundred billion? I think i'd guess Ellen, Yeah, 725 00:35:08,239 --> 00:35:10,480 Speaker 1: you're right, I mean, okay, this was, this was this is. 726 00:35:11,280 --> 00:35:13,520 Speaker 1: There's not not that many with that with that much 727 00:35:13,560 --> 00:35:17,120 Speaker 1: to lose, you know, exactly exactly, but it's a striking 728 00:35:17,120 --> 00:35:23,160 Speaker 1: bluemo head right, So okay, so he um, what's happened 729 00:35:23,239 --> 00:35:26,000 Speaker 1: is Tesla shares are down obviously all the Twitter stuff 730 00:35:26,000 --> 00:35:29,640 Speaker 1: that's going on, etcetera. He's worth roughly a hundred seventy 731 00:35:29,640 --> 00:35:32,720 Speaker 1: billion dollars right now, but it's down from three hundred 732 00:35:32,760 --> 00:35:37,279 Speaker 1: forty billion around this time last year. Wow. Yeah, that's 733 00:35:37,320 --> 00:35:42,799 Speaker 1: a rough year. I think. I think all land on 734 00:35:42,880 --> 00:35:47,640 Speaker 1: his feet stuff. All right, Well, that's pretty good filled 735 00:35:47,640 --> 00:35:50,680 Speaker 1: out a hundred billion cheese. Puts it in perspective when 736 00:35:50,800 --> 00:35:52,439 Speaker 1: the rest of us check our four in one case, 737 00:35:52,480 --> 00:35:55,919 Speaker 1: I guess I'm gonna dip into the alternative assets space here. 738 00:35:56,000 --> 00:35:59,000 Speaker 1: As I said, I've got two soccer balls World Cup 739 00:35:59,400 --> 00:36:01,560 Speaker 1: where he ended. Soccer balls that are up for auction, 740 00:36:01,600 --> 00:36:04,640 Speaker 1: one already sold, one's still up for auction. The first 741 00:36:04,719 --> 00:36:07,600 Speaker 1: is I think we talked about this before. Diego Maradonna, 742 00:36:07,719 --> 00:36:11,719 Speaker 1: the great Argentina star of the eighties, he had what's 743 00:36:11,760 --> 00:36:15,080 Speaker 1: known as the hand of God, had right where they 744 00:36:15,760 --> 00:36:21,200 Speaker 1: he clearly scored a goal in the World Cup quarter finals. 745 00:36:21,560 --> 00:36:23,759 Speaker 1: I believe it is with his hand, and they asked 746 00:36:23,800 --> 00:36:27,040 Speaker 1: him afterwards, did you use your hand? And he said, now, 747 00:36:27,080 --> 00:36:30,120 Speaker 1: it was the head of Diego Maradonna and the hand 748 00:36:30,160 --> 00:36:33,080 Speaker 1: of God that scored that goal. But replay clearly shows 749 00:36:33,120 --> 00:36:35,680 Speaker 1: it was his hand. They're still very sore about this. 750 00:36:35,719 --> 00:36:37,960 Speaker 1: In England, I will I will point out and then 751 00:36:38,520 --> 00:36:41,640 Speaker 1: the referee who missed the calls has had the lion 752 00:36:41,760 --> 00:36:44,920 Speaker 1: judge who missed the calls, uh, kind of ruined his life. 753 00:36:45,280 --> 00:36:48,799 Speaker 1: But the actual referee of the game was able to 754 00:36:48,920 --> 00:36:51,600 Speaker 1: take home the game ball. They all used one game 755 00:36:51,600 --> 00:36:54,239 Speaker 1: ball back then, believe it, and I think the guy 756 00:36:54,320 --> 00:36:57,239 Speaker 1: was in his seventies, uh, and he put it up 757 00:36:57,280 --> 00:37:00,680 Speaker 1: for auction. So that's one soccer ball or i'm sorry, 758 00:37:00,680 --> 00:37:04,759 Speaker 1: football that went up on American football that went up 759 00:37:04,800 --> 00:37:09,040 Speaker 1: for auction. The other one LDNA was there auctioning off 760 00:37:09,080 --> 00:37:12,120 Speaker 1: all sorts of gifts that we're giving to the various 761 00:37:12,480 --> 00:37:16,120 Speaker 1: UH mayors of New York over the year, and one 762 00:37:16,160 --> 00:37:20,120 Speaker 1: included a one of a kind Louis Vatton soccer ball 763 00:37:20,160 --> 00:37:27,360 Speaker 1: given to Mayor Giuliani in commemor fans World Cup Prices Precise, 764 00:37:27,600 --> 00:37:30,040 Speaker 1: I'm gonna ask you both, which one do you think's worth? Moore? 765 00:37:30,520 --> 00:37:33,879 Speaker 1: And what's what do you think it's worth? Okay, I'll 766 00:37:33,880 --> 00:37:37,279 Speaker 1: go first. It's definitely hand of God ball, and I'm 767 00:37:37,320 --> 00:37:40,719 Speaker 1: going to go with two point five million dollars. Two 768 00:37:40,719 --> 00:37:43,600 Speaker 1: point five million dollars, all right, Stefane, what do you 769 00:37:43,600 --> 00:37:46,920 Speaker 1: think I'll go with the Hand of God ball as well. 770 00:37:46,920 --> 00:37:48,680 Speaker 1: But I'm gonna take the under. In this market, I 771 00:37:48,719 --> 00:37:52,040 Speaker 1: think it's probably I think it's yeah, under two point 772 00:37:52,080 --> 00:37:54,240 Speaker 1: five million. I was going to say in the hundred thousands, 773 00:37:54,280 --> 00:37:58,680 Speaker 1: but let's say a million. Oh my gosh, can I revise? No? 774 00:37:58,920 --> 00:38:01,359 Speaker 1: You could? She always wants to revise. You're not allowed 775 00:38:01,400 --> 00:38:04,520 Speaker 1: to revise. This might be the closest call we've ever 776 00:38:04,600 --> 00:38:08,600 Speaker 1: had in a game of prices precise precise. It's all 777 00:38:08,640 --> 00:38:12,360 Speaker 1: for two million pounds, so two point four million, So 778 00:38:12,360 --> 00:38:14,320 Speaker 1: I think we got to give it to Stefane for 779 00:38:14,360 --> 00:38:18,040 Speaker 1: taking the under on the come on that one, sure 780 00:38:18,360 --> 00:38:21,720 Speaker 1: well done, believe it or not. The Louis Baton soccer 781 00:38:21,760 --> 00:38:26,520 Speaker 1: ball Vildonna. It's only six hundred bucks, that's it. Not crazy? 782 00:38:26,560 --> 00:38:29,279 Speaker 1: That seems less than the price of a Louis Baton purse. 783 00:38:29,360 --> 00:38:31,879 Speaker 1: You could cut the top of it, make a purse 784 00:38:31,920 --> 00:38:36,160 Speaker 1: out of it. And yes, but uh, that's all I 785 00:38:36,200 --> 00:38:39,560 Speaker 1: got Stefan. I'm guessing, um, you being in the Hamas, 786 00:38:39,600 --> 00:38:41,000 Speaker 1: I think we have a clue as to what your 787 00:38:41,040 --> 00:38:44,840 Speaker 1: craziest thing of the week is. Yeah, yeah, no, this, 788 00:38:45,040 --> 00:38:49,319 Speaker 1: this FTX situation is the craziest financial situation I could 789 00:38:49,360 --> 00:38:51,520 Speaker 1: ever imagine. I mean it was. It's not just me 790 00:38:51,600 --> 00:38:54,200 Speaker 1: that saying that. John Ray, who's who's the quarter point 791 00:38:54,239 --> 00:38:57,680 Speaker 1: in CEO during the bankruptcy proceedings, Who did Enron nor tell? 792 00:38:58,239 --> 00:39:00,400 Speaker 1: I mean, he's been at the epicenter of everything. He 793 00:39:00,480 --> 00:39:03,160 Speaker 1: went out of his way in the bankruptcy filings to 794 00:39:03,239 --> 00:39:05,480 Speaker 1: say that this was the craziest thing you've ever seen. 795 00:39:05,880 --> 00:39:09,600 Speaker 1: And honestly, that's an extremely unusual approach, Like usually you 796 00:39:09,640 --> 00:39:12,399 Speaker 1: stick to facts and it's under and all those things 797 00:39:12,400 --> 00:39:16,080 Speaker 1: are under under the threat of perjury if you're wrong, 798 00:39:16,200 --> 00:39:19,040 Speaker 1: and so, like you know, it's just for someone of 799 00:39:19,200 --> 00:39:22,200 Speaker 1: his professionalism and stature to come out and say that, 800 00:39:22,320 --> 00:39:26,040 Speaker 1: I mean, just underscore is just what we're dealing with here. Unfortunately, 801 00:39:26,080 --> 00:39:28,840 Speaker 1: for a lot of people, it's it's really mind boggling. 802 00:39:28,840 --> 00:39:30,239 Speaker 1: And when you read some of these statements in the 803 00:39:30,239 --> 00:39:33,320 Speaker 1: bankruptcy filings, like you're saying, you know, they they just 804 00:39:33,360 --> 00:39:36,160 Speaker 1: seem flabber guested that a company could have been run 805 00:39:36,160 --> 00:39:38,480 Speaker 1: the way it was exactly that's a good way to 806 00:39:38,480 --> 00:39:43,160 Speaker 1: put it. So well, Uh, Stefan, we really appreciate your time. 807 00:39:43,200 --> 00:39:45,440 Speaker 1: We know it's a it's a very busy time for you, 808 00:39:45,520 --> 00:39:50,480 Speaker 1: a very uh sort of risky and i'm sure stressful time. 809 00:39:50,560 --> 00:39:53,640 Speaker 1: So we really appreciate you taking some time out to 810 00:39:53,640 --> 00:39:57,520 Speaker 1: to explain how you're doing all this and what happens next, um, 811 00:39:57,840 --> 00:39:59,759 Speaker 1: and uh what'sh your the best luck and hopefully we 812 00:39:59,800 --> 00:40:03,000 Speaker 1: can bring you back some day and happier times. No, 813 00:40:03,120 --> 00:40:05,439 Speaker 1: I love to, I'd love to. Yeah, it's uh, it's 814 00:40:05,480 --> 00:40:07,480 Speaker 1: definitely a little bit of a fog right now. You know, 815 00:40:07,480 --> 00:40:09,960 Speaker 1: we'll see how they does settles, but uh, I think 816 00:40:09,960 --> 00:40:11,960 Speaker 1: that will be We'll be back in. You know, the 817 00:40:12,000 --> 00:40:14,040 Speaker 1: industry will be back in business probably sooner a lot 818 00:40:14,040 --> 00:40:17,000 Speaker 1: of people are are expecting. All right, thanks again, yeah, 819 00:40:17,040 --> 00:40:18,919 Speaker 1: thank you so much for joining us. Thank thanks guys, 820 00:40:18,960 --> 00:40:30,560 Speaker 1: Talcu latter What Goes Up. We'll be back next week 821 00:40:30,840 --> 00:40:32,400 Speaker 1: and so then you can find us on the Bloomberg 822 00:40:32,480 --> 00:40:35,839 Speaker 1: Terminal website and app or wherever you get your podcasts. 823 00:40:36,560 --> 00:40:38,160 Speaker 1: We love it if you took the time to rate 824 00:40:38,160 --> 00:40:41,160 Speaker 1: and review the show on Apple Podcasts, so more listeners 825 00:40:41,200 --> 00:40:43,520 Speaker 1: can find us. And you can find us on Twitter, 826 00:40:43,920 --> 00:40:48,280 Speaker 1: follow me at pak Anonymous, Bildana hierarch is at Bldana Hirach. 827 00:40:48,920 --> 00:40:53,399 Speaker 1: You can also follow Bloomberg Podcasts at podcasts. What Goes 828 00:40:53,520 --> 00:40:56,520 Speaker 1: Up is produced by Stacy Wong. Thanks for listening, See 829 00:40:56,560 --> 00:41:04,560 Speaker 1: you next time. Just not want