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Speaker 1: I'm Caroline Hide of Blomberg's World headquarters in New York

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Speaker 1: and Imed Ludlow in San Francisco. This is Bloomberg technology

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Speaker 1: coming up old fashioned embezzlement, positioned to fail. Any regulation

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Speaker 1: would have helped. They're just some of the CEO John

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Speaker 1: Ray the third and the words he had to say

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Speaker 1: of f t X. Understand Bankminfried. We dig into the

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Speaker 1: testimony and what's to come of it. And the fd

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Speaker 1: X fallout is creating headaches at other exchanges, mainly Binance,

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Speaker 1: which has seen nearly four billion dollars in outflows in

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Speaker 1: the past week. And Bloomberg has learned Apple's potential solution

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Speaker 1: to anti competitive concerns over its app store. But first,

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Speaker 1: let's get back to that huge story of the day

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Speaker 1: after ft x is swift collapse sent shock waves across

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Speaker 1: crypto markets. Of course, the House Financial Services commit he

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Speaker 1: was out to get some answers from the senior f

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Speaker 1: t X executives, a task that's been made are now

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Speaker 1: more complicated by the fact that will He is arrested.

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Speaker 1: Sa bakmafreed himself in the Bahamas on Monday. Williams Chris

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Speaker 1: so much as with us on the latest. Just walk

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Speaker 1: us through, Chris, what happens now from illegal perspective for

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Speaker 1: Sam Magminfried. Yeah, well, as we can see on the screen,

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Speaker 1: things are breaking right now that he's uh denied bail

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Speaker 1: and the Bahamas and it's gonna be in jail if

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Speaker 1: I believe the report I saw said tebrutary eight. So

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Speaker 1: that pushes things down the road from the immediate future

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Speaker 1: to then and uh, you know he's apparently going to

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Speaker 1: fight extradition, which could take a while, could take months,

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Speaker 1: could take years. Some people say, we've had people poor

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Speaker 1: who have bought extraditions successfully or stolen the Bahamas and

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Speaker 1: had not um. So it's a real question as to

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Speaker 1: how that will proceed before he even gets here to

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Speaker 1: face the charges that are facing him, which are pretty substantial. Chris,

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Speaker 1: I've sat alongside you covering financial crime in the courtroom,

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Speaker 1: preparing and anticipation of being in the courtroom. It's never straightforward.

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Speaker 1: The burden will have to force the prosecution. Of course.

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Speaker 1: What is it that they'll have to demonstrate and prove

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Speaker 1: when it comes to the action Sam Bankman free took

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Speaker 1: or did not take, Well, they're going to happen to

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Speaker 1: show that he used. You know, either he's charged with

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Speaker 1: wire fraud, UM, securities fraud, commodities fraud, and conspiracies to

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Speaker 1: commit those as well, So they're gonna have to show

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Speaker 1: that he used basically that he lied to investors or

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Speaker 1: lied to customers by misrepresenting the state of the company's

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Speaker 1: finances or omitting material facts about the company's finances. And

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Speaker 1: when we say material, we mean things that would matter

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Speaker 1: to a reasonable investor when they when they invest, if

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Speaker 1: that would matter to them in their decision to invest

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Speaker 1: with him or to give them money. Um, And that

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Speaker 1: would be the burden that they would have to show

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Speaker 1: on each of those accounts. The jury to convict Bloomberg's

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Speaker 1: christ almost there on the legal and court speat thank you. Meanwhile,

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Speaker 1: f t X is new chief executive and the man

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Speaker 1: handling its restructuring, John Ray the third did take the

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Speaker 1: stand on Capitol Hill where he called the former ft

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Speaker 1: X team as quote, grossly inexperienced and unsophisticated. Take a listen,

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Speaker 1: not sophisticated at all. Sophisticated perhaps in the way, uh

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Speaker 1: they were able to sort of hide it from people,

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Speaker 1: uh frankly, right in front of their eyes. But this

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Speaker 1: isn't This isn't uh, you know, sophisticated whatsoever. This is

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Speaker 1: just plain old embezzlement. Bloomberg Shnali Bassak on the ground

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Speaker 1: in Washington following it blow by blow, What did we learn?

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Speaker 1: F t x c O. John Ray really talking about

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Speaker 1: how this is like a paperless bankruptcy and that he

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Speaker 1: doesn't trust a lot of the paper trail he sees. Meanwhile,

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Speaker 1: on the lawmaker side, you have recognition by some such

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Speaker 1: as Congressman at french Hill who says that the losses

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Speaker 1: here could really dwarf what you saw even with Bernie

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Speaker 1: made off so one of the biggest bankruptcies here in

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Speaker 1: American history. There's also this recognition of whether there could

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Speaker 1: have been anything done to prevent something like this via regulation,

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Speaker 1: via better rules of the law of land when it

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Speaker 1: comes to what's happening in the United States when it

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Speaker 1: comes to digital assets. But at the end of the day,

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Speaker 1: you did have John Ray also saying this could have

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Speaker 1: happened anywhere. Remember you had charges civil and criminal here

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Speaker 1: of fraud, and also the SEC saying that the commingling

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Speaker 1: of funds here were happening as he was misleading investors

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Speaker 1: about certain facts about f t X, and Alameda talked

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Speaker 1: to us through Shannali, really what the answer is for

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Speaker 1: people who have lost money here? Was there any sort

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Speaker 1: of explanation for those who have been so emotionally and

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Speaker 1: but also financially involved in this as to where the

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Speaker 1: buck will potentially flow for us or for international users.

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Speaker 1: There's a few things here. You did have John Ray

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Speaker 1: say that it's impossible to recoup everything, but you also

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Speaker 1: had him say that in the United States it might

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Speaker 1: be a little bit easier than other places given how

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Speaker 1: the firm structured. But I would also say that remember

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Speaker 1: when you look at the sec complaint, for example, they

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Speaker 1: talk about how the funds were used and where the

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Speaker 1: funds were used, real estate purchases, political contributions, venture capital.

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Speaker 1: Remember we've already had the FTX executives say the venture

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Speaker 1: capital in particular are assets, and how they treat that

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Speaker 1: in the bankruptcy when they try to make customers whole

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Speaker 1: again will be interesting because they're going to have to

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Speaker 1: track all these assets down at the end of the day,

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Speaker 1: and will they get full dollar for them at the end,

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Speaker 1: and are they even going to be able to find

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Speaker 1: all the assets? Meanwhile, I just want to go to

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Speaker 1: your expertise, HETIONALI in the contagion effect. You've been looking

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Speaker 1: a lot at the other exchanges that edged on a

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Speaker 1: light on some of the crypto related names that have

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Speaker 1: been sunk by this. But there has been a lot

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Speaker 1: of reporting and focus on Binance, for example, on Twitter

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Speaker 1: and on other areas of the media. Is that something

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Speaker 1: that you think Washington is paying attention to at the moment.

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Speaker 1: I think they're pretty tied up with f t X

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Speaker 1: at the moment, So that's a great question if I

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Speaker 1: asked anything about whether it's finance or stable coin industries

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Speaker 1: or anything else. Really, the focus really here is on

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Speaker 1: f t X right now because people have lost so

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Speaker 1: much money and there is a lot of anger. But

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Speaker 1: to the point that you're making their finance is a

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Speaker 1: largely international exchange. Of course, there's also finance US. But

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Speaker 1: the issue you were talking about earlier in the show

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Speaker 1: was net outflows to the tune of about four billion

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Speaker 1: dollars in a week. I thought Nansen's analysis of this

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Speaker 1: was interesting. Kind of not to fret this is the

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Speaker 1: small percentage of total assets, but it does goes to

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Speaker 1: show the cost to mur fears around holding money in

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Speaker 1: an exchange, especially as the industry gets more concentrated. Plus

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Speaker 1: that issue with stable coin withdrawals, to keep an eye

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Speaker 1: on as the industry faces pressure. What happens to the

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Speaker 1: stable coin industry. Whenever you have a congressional committee hearing

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Speaker 1: like this, Nali, Yes, you get the testimony from those

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Speaker 1: called as witnesses. We also kind of get this broad

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Speaker 1: range of opinion from those committee members that pose questions.

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Speaker 1: Do we get any sense of what the committee members

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Speaker 1: want to happen next? What happens next based on what

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Speaker 1: was discussed in that room? Well, one thing actually and

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Speaker 1: no shocker here, but when there's frustration in the committee

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Speaker 1: often it's backward looking, and so there were a lot

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Speaker 1: of questions about what had happened, how does it happened?

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Speaker 1: But there was also a fair bit of frustration that

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Speaker 1: he was arrested yesterday before he was able to testify

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Speaker 1: here today under oath to give Americans more clarity on

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Speaker 1: what had happened here, I would say also, if you

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Speaker 1: want that clarity, go to the indictment from the Southern

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Speaker 1: District of New York, go to the SEC complaint and

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Speaker 1: the CFTC complained. There's a lot of detail in there,

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Speaker 1: but there was certainly a lot of frustration here we're

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Speaker 1: not hearing from Sam BigMan freed himself under oath, which

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Speaker 1: we know he had said he didn't have all the

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Speaker 1: details because he didn't have all the data. Shanali Bassek

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Speaker 1: just fantastic day of reporting in of course the White

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Speaker 1: House or indeed in Washington or generally. We thank her

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Speaker 1: so much, and let's just talk a little bit for

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Speaker 1: a moment about what's been happening. The update that, of

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Speaker 1: course Sam Backminfried has been denied bail by a judge

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Speaker 1: in the Bahamas in order to return to jail. We

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Speaker 1: understand in the island country. Now what's interesting here is

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Speaker 1: the judge is also setting the extradition hearing for bank

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Speaker 1: Win freed for February the eighth, and learn the arraignment

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Speaker 1: on Tuesday. Has Laways said that he would fight plans,

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Speaker 1: of course, to send him back to the United States

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Speaker 1: to face charges. I mean, while coming up the future

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Speaker 1: of the cybersecurity industry and as we head towards three,

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Speaker 1: what that really looks like. We're going to get you

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Speaker 1: the perfect insight an exclusive conversation. Palo Alto Neck Works

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Speaker 1: CEO of Nikesha Aura US next a Bloomberg. We've got

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Speaker 1: to talk cyber right now because it's been an increasingly

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Speaker 1: important focus for companies, for governments, and of course this

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Speaker 1: year we're going to talk about cyber crime as it persists.

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Speaker 1: Plo Alto Network CEO Nikesha Aura Choice US from its

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Speaker 1: Global Cybersecurity Conference in Las Vegas, bringing together more than

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Speaker 1: cybersecurity professionals to discuss just that the increasing nature and

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Speaker 1: all encompassing global nature of cyber crime. Nikesh, But what

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Speaker 1: about cyber spending? We want to understand right now when

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Speaker 1: you're getting up on your fireside chats, when you're thinking

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Speaker 1: about innovation in the space, as you have been with

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Speaker 1: the course with Glogle Cloud, are people still willing to

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Speaker 1: spend as much as they used to in this this

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Speaker 1: environment of economic downturn. Well, Caroline, first of all, thank

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Speaker 1: you for having me as we kick off our IGNITE

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Speaker 1: conference in Las Vegas. I know there's a lot of

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Speaker 1: conversation around the macro environment and what is going on

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Speaker 1: with potential budgets and cyberspending and I T spending to

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Speaker 1: be honest in the future, and whilst we are seeing

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Speaker 1: some degree of caution from the customers out there. I

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Speaker 1: don't think the demand is going away because there's a

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Speaker 1: lot of historical debt that needs to be paid. Because

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Speaker 1: we've built infrastructure over the last thirty years which needs

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Speaker 1: to be replaced. Because everyone's relying on technology and that

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Speaker 1: requires a lot of our customers to upgrade their capabilities

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Speaker 1: to get more and more up to speed with the

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Speaker 1: current techniques in the market. And as you know, the

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Speaker 1: bad actors aren't waiting in an economic downturn. They're attacking

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Speaker 1: with fugusto they are. And therefore, what of the space,

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Speaker 1: the competition in the space, the people, the customers do

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Speaker 1: they turn to in this moment? Is it market shap

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Speaker 1: that's been growing for you? And how have you been

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Speaker 1: winning that? If so? Well, Caroline, four and a half

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Speaker 1: years ago we were a single product company. In the

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Speaker 1: last four and a half years we have built a

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Speaker 1: portfolio where we lead in thirteen categories of cybersecurity. This

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Speaker 1: is a few which hasn't been done before by any

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Speaker 1: cybersecurity companies. So, you know, the silver lining in this

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Speaker 1: macroeconomic environment is that customers are looking to reduce their

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Speaker 1: total cost of ownership and increase their security posture. Security

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Speaker 1: outcome as you'd like to call it, and that makes

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Speaker 1: us a perfect partner for them because we have spent

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Speaker 1: the time in the last four or five years trying

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Speaker 1: to put our platform together and that's helping us because

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Speaker 1: you know, people are coming to us in this consolidation

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Speaker 1: seat of driven market the cash. It's been a busy

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Speaker 1: week for Caroline and I'm we're only two days in.

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Speaker 1: We called Monday Merging Monday because of just the relentless

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Speaker 1: news for an M and A. You're in ignite two

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Speaker 1: of your friends and peers and industry colleagues. Historically, I

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Speaker 1: look at your M and A track record, semin a

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Speaker 1: an option for you guys right now. Well, you know

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Speaker 1: we've bought seventeen companies so far since I've been here

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Speaker 1: for four and a half years. So yes, you know

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Speaker 1: we have appetite for M and A as you can

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Speaker 1: probably tell. But we really focus done expanding our product

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Speaker 1: capability and product portfolio, and we've done M A slightly

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Speaker 1: differently than traditionally an enterprise. We've actually looked for number

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Speaker 1: one or number two in our in a particular category.

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Speaker 1: We made sure that the founders have come to work

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Speaker 1: run our business. In fact, you know, I was noticed

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Speaker 1: noting the statistics this morning. We have fourteen thousand employees.

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Speaker 1: Eighty percent of those people are new to Poulto in

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Speaker 1: the last four years. So we have made sure that

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Speaker 1: this transition that we've undergone through M and A and

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Speaker 1: through organic development has been sort of balanced with increasing

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Speaker 1: in our own capabilities. So we think we've paid off

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Speaker 1: all the cybersecurity technical debt we've had to pay to

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Speaker 1: build this into a large platform company for the future.

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Speaker 1: I didn't I didn't hear enough. I didn't hear no. Yes.

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Speaker 1: Well I didn't hear yes either. Fair enough. Caroline made

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Speaker 1: a really good point earlier when we were talking before

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Speaker 1: the show that when it comes to cyber security, cyber

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Speaker 1: crime is not moderating, even if the spend of your

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Speaker 1: customers is. What are the drivers behind corporates who think, right,

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Speaker 1: I better now protect myself and invest in this area.

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Speaker 1: What are the key events from this year that has

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Speaker 1: pushed executives to get their checkbook out? Well I did

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Speaker 1: last year. In two we had twenty confirmed randsomwhere victims,

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Speaker 1: which means companies had to deal with an environment where

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Speaker 1: their technology did not help them. They got breached, their

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Speaker 1: systems were shut down, they had business interruption, and they

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Speaker 1: either had to negotiate their way out of a situation

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Speaker 1: or had to pay rand somewhere to get out of it,

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Speaker 1: to get to you know, get back to business. Now

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Speaker 1: that leaves boundarily of a scar on you. You're gonna

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Speaker 1: sit down with your I T team and their security

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Speaker 1: teams like this should never happen again. So the market

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Speaker 1: just in Mint Mint customers who are not paying attention

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Speaker 1: to cybersecurity, and what's happening is, you know, the whole pandemic,

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Speaker 1: the whole rework from home, the whole fact that you

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Speaker 1: have you know, online was the only way to get

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Speaker 1: tremendous focus on making sure that your technology infrastructure is

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Speaker 1: working at the time that requires it to be uninterruptable,

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Speaker 1: It requires it to have business continuity, and their cyber

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Speaker 1: becomes your biggest risk if something happens to your tech infrastructure.

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Speaker 1: Because you do a global cyber survey, and what caught

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Speaker 1: my eye was not only just how everyone has experienced

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Speaker 1: it was reported experience of cybersecurity incident, but What really

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Speaker 1: interested me was the talent issue, and you talk about

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Speaker 1: a cyber skills shortage, and that basically most respondents is

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Speaker 1: saying that having to tend to automated ways of tackling

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Speaker 1: cybersecurity because of talent shortage. How are you looking to

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Speaker 1: tackle that talent shortage in this market? So, Caroline, like

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Speaker 1: you already gave the answer and what you said, I

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Speaker 1: don't think we have a talent shortage. I think we

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Speaker 1: have a you know, sort of a perpetration of too

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Speaker 1: many vendors, too much integration, which is done by our

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Speaker 1: customers who in some cases don't have all the skills

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Speaker 1: needed because they're running a two thousand, five thousand, ten

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Speaker 1: thousand people organization, and they should be busy doing their business,

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Speaker 1: not worrying about protecting their infrastructure by stitching cybersecurity solutions.

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Speaker 1: That job should be our job, that should be the

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Speaker 1: industry's job. And that's kind of what we've been working

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Speaker 1: on phil last four and a half years. Four and

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Speaker 1: a half years ago, we went out and said, listen,

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Speaker 1: this is a data problem, this is an AI problem.

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Speaker 1: It was funny I was remarking earlier that I played

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Speaker 1: it is giving you a little window into what AI

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Speaker 1: is capable of. How natural language processing should be able

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Speaker 1: to answer you a question without requiring humans to get

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Speaker 1: involved and looking at screens and trying to figure out

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Speaker 1: what the problem is. So I think this is a

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Speaker 1: data problem. I think this is an AI problem. We

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Speaker 1: need more data and AI professionals, not really cybersecurity professionals.

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Speaker 1: We can understand fifty different vendors in the infrastructure and

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Speaker 1: stitch it one at a time for each customer. So

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Speaker 1: this is an automation problem. This is an AI problem.

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Speaker 1: This can be solved, but our customers have to step

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Speaker 1: up and embrace automation and AI because if they don't,

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Speaker 1: we're gonna have more ransom of our victims next year

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Speaker 1: than we had last year. We had a chat GBT

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Speaker 1: ease there on a hands carry How familiar with that?

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Speaker 1: Palo Alto Network CEO Nikesha are a really good to

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Speaker 1: catch up, Caroline. Not grateful to have you on the show.

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Speaker 1: Let's talk about Twitter's Trust and Safety Council. It's no

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Speaker 1: more a group of independent experts. It was created in

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Speaker 1: to help tackle child sexual exploitation, hate speech, harassment other

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Speaker 1: problems on the platform, but it's now been disbanded and

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Speaker 1: a letter was sent to the team saying, as Twitter

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Speaker 1: moves into a new phase, we are reevaluating how best

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Speaker 1: to bring external insights into our product and policy development work.

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Speaker 1: Several members recently quit the group over concerns about the

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Speaker 1: company's ability to police the platform for harmful contented Yeah,

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Speaker 1: that's right, Kara and Apples making some changes of its own,

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Speaker 1: preparing to allow alternative app stores on its iPhones and

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Speaker 1: iPads as part of a sweeping overhaul to comply with

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Speaker 1: strict European Union requirements coming in bloom Bus. Mark Goerman

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Speaker 1: broke that story and joins us. Now, Mark, what have

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Speaker 1: you learned in your reporting about the changes that Apple

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Speaker 1: is working on internally? Thank you both for having me. Yeah,

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Speaker 1: have you explained it well. Basically, Apple has a major

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Speaker 1: project in the works across its software and services organizations

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Speaker 1: to really revamp the underpinnings of iOS and iPad os,

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Speaker 1: some of its other operating systems to meet these very

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Speaker 1: stringent and very broad requirements coming into place from the

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Speaker 1: European Union. Now, as part of these requirements, they're really

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Speaker 1: going to start making the iPhone a little bit more

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Speaker 1: like Android. Right. I'm sure some people aren't gonna like, uh,

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Speaker 1: you know, to hear that comparison. But there's the reality.

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Speaker 1: You're gonna see some sideloading, which means installing apps from

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Speaker 1: third party app stores, from different websites, from other sources

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Speaker 1: on the Internet. You're going to see them begin to

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Speaker 1: slightly open up the NFC processor on the phone, which

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Speaker 1: is the chip that allows you to do mobile pay

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Speaker 1: with Apple pay, so it's Apple to pay payments for

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Speaker 1: the first time, may be able to come to third

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Speaker 1: party apps like your bank or Venmo or PayPal. You're

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Speaker 1: also going to see a change to the browsing engine.

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Speaker 1: So there's third party web browsers available on the iPhone,

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Speaker 1: whether that's Firefox or whether that's Chrome. But what most

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Speaker 1: people don't know is that those applications still use the

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Speaker 1: underlying mechanics, the underlying engine of an Apple Safari web browser.

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Speaker 1: There's also some work being done to open up the

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Speaker 1: Fine My network. Do you remember Tile that Square competitors

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Speaker 1: to the air tag. They've complained for months about not

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Speaker 1: being able to have the same iPhone based pairing functionality

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Speaker 1: as the air tag. So Apple is going to try

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Speaker 1: to bridge that gap as well. That's interesting, of course,

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Speaker 1: because you bring up a competitor basically that Apple wouldam

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Speaker 1: built something pretty similar to all of this is about competition.

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Speaker 1: We've are gonna gotten thirty seconds left. But will this

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Speaker 1: ultimately satisfied you think, because you're saying it's like Android,

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Speaker 1: but Google is also they think it's too powerful. As

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Speaker 1: long as Apple hits all the requirements that the European

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Speaker 1: Union is outlined with the Digital Markets Act for I'm

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Speaker 1: not really sure what else people or the government can

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Speaker 1: complain about. Out the downside for Apple if they don't comply.

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Speaker 1: We're talking ten to of annual global revenue as fine

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Speaker 1: switch for Apple as of last year. That's eighty billion dollars.

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Speaker 1: Quite the chunk of change. Mark German Money talks always.

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Speaker 1: We thank you so much. Is always great to have

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Speaker 1: him on with a scoot. Welcome back to Bloomberg Technology.

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Speaker 1: I'm Caroline Hyde in New York with Ed Ludlow in

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Speaker 1: San Francisco, and you are always a busy man across

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Speaker 1: our screens, but also by writing scoop after scoop. Just

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Speaker 1: tell us about the SpaceX fundraising one. Yes, so Bloomberg

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Speaker 1: has learned that Elon must SpaceX wants to sell insider

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Speaker 1: shares at a price that would raise the company's valuation

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Speaker 1: to about a hundred and fifty forty billion dollars. According

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Speaker 1: to sources, this makes SpaceX the most valuable private company

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Speaker 1: in the US. It's up from a seven billion dollar

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Speaker 1: valuation in July. That's according to pitchbook data. You know,

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Speaker 1: this is a company that's dominated ting right the market

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Speaker 1: for commercial space launch. They have Starlink, which is their

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Speaker 1: satellite based internet and you know, in the past, Musk

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Speaker 1: has said that Starlink could be spun off in a

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Speaker 1: listing right once cash flows more predictable. I'm really interesting

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Speaker 1: your take on this story. You know, it's a tender offer.

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Speaker 1: We don't know yet for certain if they'll do a

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Speaker 1: primary as well. And I know, you know, you know

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Speaker 1: this bending on for every seller, there's a buyer, and

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Speaker 1: buyer there's a seller. But what what gets me is

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Speaker 1: that there's clearly an appetite from investors to get involved

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Speaker 1: in SpaceX, and when it's led by well, ostensibly one

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Speaker 1: Elon Musk. I know that he of course has very

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Speaker 1: powerful CEOs and operational chief's female at that. But I'm

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Speaker 1: interested in why on the one side, you're talking earlier

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Speaker 1: about Tessa shares have been under pressure. Worry about the distraction,

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Speaker 1: but then the privately held business people answer worried. Yeah.

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Speaker 1: I mean it's a very hard one to answer. Gwin

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Speaker 1: shot well, as you alluded to, you know runs day

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Speaker 1: to day SpaceX. But Elon Musk is still involved, you know,

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Speaker 1: in his pay testimony the other day, he's said that

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Speaker 1: that's still a key area of focus for him. So

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Speaker 1: it's a question that overhangs both companies. But the private

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Speaker 1: entity SpaceX at least seems more immune to this key

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Speaker 1: man risk element that tests the shares appear to be

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Speaker 1: under yeah for now, well, still going to the moon,

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Speaker 1: it would seem in terms of overall valuation of that business.

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Speaker 1: And let's talk about valuations and businesses private and whether

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Speaker 1: the exit strategies are still there. We want to talk

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Speaker 1: about fundraise, we want to want to talk about deal sentiment.

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Speaker 1: We've got great local focus for that here in New York.

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Speaker 1: Cameron and Sary's with us board partner at Greycroft is

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Speaker 1: also the former head of M and A at Pinterest.

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Speaker 1: So basically, Cameron, you can talk about everything that we

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Speaker 1: want to talk about the moment because it's a hot

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Speaker 1: week for M and A and also clearly for valuations,

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Speaker 1: but all certain businesses just talk to us. You're very

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Speaker 1: focused on flin texts, in particular to some consumer focused businesses.

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Speaker 1: I know that the likes of billion under your focus.

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Speaker 1: But talk to us about what the landscape feels like

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Speaker 1: right now for these companies. Well, it's been a slow

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Speaker 1: market for certainly for I pos F, M and A

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Speaker 1: and for fundraising all the above right uh, and it's

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Speaker 1: been down significantly. But I think in these last few

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Speaker 1: weeks of the year, certainly on the fundraising front, you know,

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Speaker 1: we're seeing more activity. I'm seeing more companies trying to

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Speaker 1: close deals before the end of the year. And then

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Speaker 1: on the M and A front, you saw a very

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Speaker 1: large deal announced yesterdayan text space where Coupa Software is

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Speaker 1: going to be bought by Toma Bravo off the public

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Speaker 1: markets for about eight billion dollars. So and that comes

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Speaker 1: in the heels of Avolara, another software company is bought

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Speaker 1: by um vis To Equity for about the same price

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Speaker 1: eight billion dollars about a month or two ago. So

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Speaker 1: I think you're gonna see more and more these deals

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Speaker 1: where private equity buyers see great valuations and and values

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Speaker 1: really on the public market for some of these great

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Speaker 1: companies that have um earnings but cash flow and that

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Speaker 1: you know, the price that it's really been depressed in

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Speaker 1: the last year, and that's we've throwed the needle for

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Speaker 1: us a little bit of whether there's any themes. Then

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Speaker 1: you say, if they basically caught earnings, basically if they

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Speaker 1: are a profitable business, so what do most of the

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Speaker 1: companies in your portfolio more generally have that right now

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Speaker 1: or more changes needed from within before they can go

431
00:22:54,760 --> 00:22:57,200
Speaker 1: out and fundraise. Well, I think in the venture space obviously,

432
00:22:57,200 --> 00:22:59,280
Speaker 1: when you're talking about early stage companies, the majority of

433
00:22:59,320 --> 00:23:01,919
Speaker 1: them do not have a out of EBA D or profit.

434
00:23:01,960 --> 00:23:05,120
Speaker 1: They're they're focused on growth to maybe growing for a year,

435
00:23:05,280 --> 00:23:07,639
Speaker 1: but they're still burning cash on the public markets. However,

436
00:23:07,680 --> 00:23:09,320
Speaker 1: you have a number of great companies that went public

437
00:23:09,359 --> 00:23:12,440
Speaker 1: in the last couple of years, particularly sas Space, um

438
00:23:12,520 --> 00:23:15,159
Speaker 1: software companies that are still public but the valuations have

439
00:23:15,240 --> 00:23:21,440
Speaker 1: come down significantly. UM you still have you know, Zora, Smartsheet, Docuside, dropbox, Box, um, HubSpot.

440
00:23:21,480 --> 00:23:23,960
Speaker 1: These are all terrific companies, and I'm you know, I'm

441
00:23:23,960 --> 00:23:25,560
Speaker 1: willing to bet that the folks at this done too,

442
00:23:25,600 --> 00:23:29,040
Speaker 1: Moravo and elsewhere, probably the salesforce, probably Adobe. They're shopping

443
00:23:29,040 --> 00:23:30,720
Speaker 1: their pencils and look at these valuations and thinking, you know,

444
00:23:30,760 --> 00:23:32,560
Speaker 1: when is the right time to make an offer for

445
00:23:32,560 --> 00:23:35,440
Speaker 1: one of these businesses because those companies do have strong clients,

446
00:23:35,440 --> 00:23:39,680
Speaker 1: good growth, good margins and cash. Cameraon Monday was I mean,

447
00:23:39,720 --> 00:23:42,280
Speaker 1: it was Merge of Monday. It was madness. I don't

448
00:23:42,280 --> 00:23:44,280
Speaker 1: know where you were or what you were doing, but

449
00:23:44,880 --> 00:23:49,000
Speaker 1: as those headlines kept coming, seventy billion dollars worth of

450
00:23:49,119 --> 00:23:52,720
Speaker 1: deals Sunday night through Monday evening, what was your reaction

451
00:23:52,800 --> 00:23:56,439
Speaker 1: to that? The timing, the volume, that the velocity at

452
00:23:56,440 --> 00:23:58,919
Speaker 1: which those M and A deals are announced. Yeah, I mean,

453
00:23:58,960 --> 00:24:00,640
Speaker 1: I think it ties back to the as we've talked about,

454
00:24:00,640 --> 00:24:02,520
Speaker 1: which is you have a lot of strategics as well

455
00:24:02,520 --> 00:24:05,159
Speaker 1: as private equally firms of massive cash talg piles. You

456
00:24:05,200 --> 00:24:07,919
Speaker 1: have attractive valuations in both the private and the public markets,

457
00:24:08,320 --> 00:24:09,680
Speaker 1: and you have end of the year right, so it's

458
00:24:09,680 --> 00:24:11,080
Speaker 1: that time where people want to get things on their

459
00:24:11,119 --> 00:24:13,960
Speaker 1: books and try to get deals announced before folksy for

460
00:24:13,960 --> 00:24:16,280
Speaker 1: the holidays, so uh, you know, we're seeing that, you know,

461
00:24:16,320 --> 00:24:17,840
Speaker 1: even on the venture side, where people are trying to

462
00:24:17,840 --> 00:24:21,439
Speaker 1: really get deals done and fundraising completed before uh, you know,

463
00:24:21,480 --> 00:24:24,639
Speaker 1: we hit the Christmas and years holidays. What happens next

464
00:24:25,040 --> 00:24:27,440
Speaker 1: is the big question. You know, there are a number

465
00:24:27,520 --> 00:24:32,800
Speaker 1: of private companies out there across subsectors. There are names

466
00:24:32,840 --> 00:24:37,560
Speaker 1: that are associated with going public in the near term,

467
00:24:37,600 --> 00:24:40,600
Speaker 1: long term. You know, I'm essentially asking you for your

468
00:24:40,600 --> 00:24:46,040
Speaker 1: outlook and where you see this market going into. Right,

469
00:24:46,080 --> 00:24:50,240
Speaker 1: we'll look in in one we had something like Nino

470
00:24:50,280 --> 00:24:52,119
Speaker 1: I p o S and they raised about a hundred

471
00:24:52,160 --> 00:24:54,920
Speaker 1: forty six billion dollars in proceeds. This year, we've had

472
00:24:55,000 --> 00:24:58,320
Speaker 1: roughly half of that. I think is is the ballpark metrics.

473
00:24:58,359 --> 00:25:00,919
Speaker 1: So it's been down significantly, and even the companies that

474
00:25:01,000 --> 00:25:03,520
Speaker 1: felt i P already I think have pulled back and

475
00:25:03,560 --> 00:25:06,400
Speaker 1: are waiting. Um the two largest on the private side

476
00:25:06,440 --> 00:25:08,000
Speaker 1: in the tech space, I think or Space Sex with

477
00:25:08,080 --> 00:25:10,840
Speaker 1: you guys just mentioned, and then probably Stripe, the large

478
00:25:10,840 --> 00:25:13,639
Speaker 1: payments company, which you know, many folks expect, you know,

479
00:25:13,640 --> 00:25:15,040
Speaker 1: it is going to go public in the next you know,

480
00:25:15,119 --> 00:25:17,760
Speaker 1: who knows, six twelve months, maybe eighteen months. I think

481
00:25:17,800 --> 00:25:20,000
Speaker 1: those are the two big kind of grand daddies that

482
00:25:20,000 --> 00:25:22,480
Speaker 1: everyone's waiting for in the tech space to go public,

483
00:25:22,640 --> 00:25:24,280
Speaker 1: and then their number of companies kind of behind that

484
00:25:24,280 --> 00:25:26,440
Speaker 1: that are smaller um. But I think those are the

485
00:25:26,440 --> 00:25:28,040
Speaker 1: ones that I really looked to to be bell Weathers

486
00:25:28,040 --> 00:25:30,400
Speaker 1: for when when the market's kind of back open. You've

487
00:25:30,400 --> 00:25:33,800
Speaker 1: got so much experience in house but also externally in

488
00:25:33,920 --> 00:25:36,600
Speaker 1: VC and early stage. I'm interested in your perspective at

489
00:25:36,600 --> 00:25:38,760
Speaker 1: the moment in the lead the lamb of regulation because

490
00:25:39,480 --> 00:25:41,879
Speaker 1: you are exposed to, say, by now pay data companies,

491
00:25:41,880 --> 00:25:44,840
Speaker 1: credit keeping one of them. The focus on fintech right

492
00:25:44,840 --> 00:25:48,480
Speaker 1: now very very much in the crypto space, but more generally,

493
00:25:48,600 --> 00:25:49,840
Speaker 1: do you think it's going to be a head wind

494
00:25:49,960 --> 00:25:52,160
Speaker 1: or tail wind some of the businesses you're in Well,

495
00:25:52,160 --> 00:25:54,359
Speaker 1: I think one of the nice things about fintech historically

496
00:25:54,720 --> 00:25:57,920
Speaker 1: leaving crypto side, because crypto has famously been largely unregulated,

497
00:25:58,000 --> 00:26:00,520
Speaker 1: but most of the fintech businesses that were involved in

498
00:26:00,560 --> 00:26:02,840
Speaker 1: that I'm involved with. If it's a payments company, you

499
00:26:02,880 --> 00:26:05,400
Speaker 1: have to have money transfer licenses. If you're a lending company,

500
00:26:05,400 --> 00:26:06,560
Speaker 1: you have to be a regular lender. If you're an

501
00:26:06,560 --> 00:26:08,880
Speaker 1: insurance like you've gotta be licensed. So all of these

502
00:26:08,920 --> 00:26:11,600
Speaker 1: businesses that by and large in the fintech space, whether

503
00:26:11,640 --> 00:26:15,520
Speaker 1: it's payments, insurance, lending, are regulated. Uh, and you have

504
00:26:15,560 --> 00:26:17,840
Speaker 1: to go state by state and these are complicated processes.

505
00:26:18,080 --> 00:26:19,879
Speaker 1: You have to get bank licenses. But because if you

506
00:26:19,960 --> 00:26:21,920
Speaker 1: do that, it makes it harder for someone to replicate

507
00:26:21,920 --> 00:26:24,520
Speaker 1: your company. It also takes several years to get started.

508
00:26:24,520 --> 00:26:26,639
Speaker 1: Typically you can spend from you know, two to three

509
00:26:26,720 --> 00:26:28,760
Speaker 1: years just getting from zero to your first loan or

510
00:26:28,760 --> 00:26:31,520
Speaker 1: your first payment. But it adds a level, you know,

511
00:26:31,520 --> 00:26:35,359
Speaker 1: obviously of sophistication of the business and oversight. So I

512
00:26:35,400 --> 00:26:37,280
Speaker 1: think that you know, in the fintech space, by and large,

513
00:26:37,280 --> 00:26:39,040
Speaker 1: you do have a quite a bit regulation already built

514
00:26:39,040 --> 00:26:42,120
Speaker 1: in and with your expertise, your M and a hat

515
00:26:42,160 --> 00:26:45,440
Speaker 1: on as well. I mean, your perfect guests really to

516
00:26:45,800 --> 00:26:48,359
Speaker 1: for the whole show because you're also was an early investor,

517
00:26:48,359 --> 00:26:51,800
Speaker 1: I believe in most Palo Alto networks right a long time,

518
00:26:52,320 --> 00:26:55,600
Speaker 1: like well, we just have the CEO then cashase terrific. Yeah,

519
00:26:55,600 --> 00:26:57,199
Speaker 1: and Nikosh is a big m and a guy. You know,

520
00:26:57,240 --> 00:26:59,040
Speaker 1: he's done what was it seven deals he said since

521
00:26:59,040 --> 00:27:01,240
Speaker 1: he started. I'm interested in your respective M and A

522
00:27:01,280 --> 00:27:04,119
Speaker 1: and regulation because look, you look at the deal with Activision,

523
00:27:04,119 --> 00:27:06,760
Speaker 1: Blizzard and Microsoft. People don't like these sorts of deals.

524
00:27:06,760 --> 00:27:09,840
Speaker 1: How much do you think companies were big hefty pockets.

525
00:27:09,840 --> 00:27:11,920
Speaker 1: Are they gonna be able to make purchases they want

526
00:27:11,920 --> 00:27:13,960
Speaker 1: to do? Well? You've seen buying large and I see

527
00:27:13,960 --> 00:27:16,720
Speaker 1: the Google Mandian deal. But but Google and Facebook and

528
00:27:17,200 --> 00:27:20,520
Speaker 1: the big tech giants Apple, which is famously not very

529
00:27:20,520 --> 00:27:23,359
Speaker 1: inquisitive anyway, they've been very quiet on the M and

530
00:27:23,359 --> 00:27:25,360
Speaker 1: A front. They really have not wanted to do much

531
00:27:25,400 --> 00:27:27,639
Speaker 1: because I think most of the deals do get scrutinized.

532
00:27:27,680 --> 00:27:29,399
Speaker 1: You know Facebook about Giffe and that deal is getting

533
00:27:29,440 --> 00:27:33,159
Speaker 1: unwotot because of the European regulation. And you see the

534
00:27:33,200 --> 00:27:35,359
Speaker 1: Adobe Figma deal, which is one of the larger deals

535
00:27:35,359 --> 00:27:39,280
Speaker 1: in tech, twenty billion dollars, that's being scrutinized now potentially.

536
00:27:39,359 --> 00:27:42,159
Speaker 1: So the large tech buyers are hesitant I think to

537
00:27:42,240 --> 00:27:45,680
Speaker 1: make big splashy deals happen because they fear it is

538
00:27:45,680 --> 00:27:48,240
Speaker 1: gonna be subjects regulation. Now. The one exception is Amazon

539
00:27:48,440 --> 00:27:50,760
Speaker 1: which bought Whole Foods and MGM, and you know the

540
00:27:50,840 --> 00:27:53,760
Speaker 1: one medical and all these answorry businesses that but you

541
00:27:53,760 --> 00:27:55,600
Speaker 1: know what The key point is those are not e

542
00:27:55,600 --> 00:27:58,960
Speaker 1: commerce companies, right, so they're staying clear of buying things

543
00:27:58,960 --> 00:28:01,359
Speaker 1: in their core wheelhouse because I think they feel these

544
00:28:01,400 --> 00:28:02,960
Speaker 1: other businesses will have less of a chance of getting

545
00:28:02,960 --> 00:28:06,040
Speaker 1: scrutinized from a FC perspective. Cameron, I just want to

546
00:28:06,080 --> 00:28:08,040
Speaker 1: go back to your your kind of career and your

547
00:28:08,040 --> 00:28:10,679
Speaker 1: experience in deal making former head and of M and

548
00:28:10,720 --> 00:28:15,080
Speaker 1: A pintrest now at great scale. You mentioned about some

549
00:28:15,160 --> 00:28:17,399
Speaker 1: of the deals that might hit barriers, some of the

550
00:28:17,440 --> 00:28:19,640
Speaker 1: deals that might not get done, deals that have got

551
00:28:19,680 --> 00:28:22,240
Speaker 1: done in the past. If you're sitting around the table

552
00:28:22,359 --> 00:28:25,800
Speaker 1: right now with your bankers, with two CEOs that want

553
00:28:25,800 --> 00:28:28,200
Speaker 1: to get a deal done, what do you imagine the

554
00:28:28,280 --> 00:28:31,720
Speaker 1: frustrations are, or at least the I guess, the anxiety

555
00:28:31,840 --> 00:28:37,000
Speaker 1: that if you proceed with with a deal then you

556
00:28:37,040 --> 00:28:39,520
Speaker 1: know it might not happen anyway, certainly, And I mean

557
00:28:39,560 --> 00:28:42,160
Speaker 1: I think you're seeing on these types of deals now

558
00:28:42,200 --> 00:28:45,160
Speaker 1: a lot more safe cards being built in um s

559
00:28:45,160 --> 00:28:47,880
Speaker 1: grows and people asking for you know, breakup fees and

560
00:28:47,920 --> 00:28:50,280
Speaker 1: kids the deal doesn't go through UM you know. I

561
00:28:50,320 --> 00:28:52,520
Speaker 1: think one of the deals that was announced did not

562
00:28:52,640 --> 00:28:54,920
Speaker 1: have a no shop so that the company is still

563
00:28:54,960 --> 00:28:56,520
Speaker 1: allowed to look for other buyers and they might have

564
00:28:56,560 --> 00:28:59,680
Speaker 1: been cooper um. So I think these are unusual provisions

565
00:28:59,680 --> 00:29:01,080
Speaker 1: that you to pebably don't see. But I think in

566
00:29:01,120 --> 00:29:04,360
Speaker 1: this market where there is uncertainty, where buyers might try

567
00:29:04,360 --> 00:29:06,120
Speaker 1: to back out, I mean, obviously Elon must try to

568
00:29:06,120 --> 00:29:09,320
Speaker 1: back out of Twitter before the deal closed, uh, you know,

569
00:29:09,360 --> 00:29:12,080
Speaker 1: pretty significantly, um, And so I think that's the reality

570
00:29:12,080 --> 00:29:14,200
Speaker 1: of the current market. And I think in the boardroom

571
00:29:14,720 --> 00:29:17,560
Speaker 1: that the venture investors and the others are making sure

572
00:29:17,600 --> 00:29:19,240
Speaker 1: that these safe cards are put in and try to

573
00:29:19,280 --> 00:29:21,680
Speaker 1: prevent um these deals from falling apart, or to at

574
00:29:21,720 --> 00:29:24,440
Speaker 1: least have backup options and insurance policies. All right, Cameron,

575
00:29:24,480 --> 00:29:26,600
Speaker 1: and sorry a slip of the tongue there. I think

576
00:29:26,640 --> 00:29:28,840
Speaker 1: I said that you worked at gray Scale, which is

577
00:29:28,880 --> 00:29:31,920
Speaker 1: of course not true. You're a board partner at gray

578
00:29:32,000 --> 00:29:34,680
Speaker 1: Croft and a former head of m and A at Pinterest,

579
00:29:34,720 --> 00:29:36,600
Speaker 1: which I got right. And we're grateful to have you on.

580
00:29:36,760 --> 00:29:39,719
Speaker 1: Thank you, Thank you. Now coming up, how will the

581
00:29:39,760 --> 00:29:43,280
Speaker 1: ft X implosion jump start crypto regulation? We have the

582
00:29:43,360 --> 00:29:48,000
Speaker 1: perfect guest for the conversation, the Blockchain Association's Kristin Smith.

583
00:29:48,440 --> 00:29:50,000
Speaker 1: But before we got to break let's take a look

584
00:29:50,000 --> 00:29:53,760
Speaker 1: at how bitcoin has performed since Sam Bankman Free's arrest.

585
00:29:53,840 --> 00:29:57,600
Speaker 1: Is not the most since FTX filed for bankruptcy. Some

586
00:29:57,800 --> 00:30:01,240
Speaker 1: near term performance, but around just shy of the eighteen

587
00:30:01,280 --> 00:30:09,080
Speaker 1: thousand u s thought us to taken. This is blatan dyk.

588
00:30:18,400 --> 00:30:20,920
Speaker 1: The ft X groups collapse, the implosion of f t

589
00:30:21,240 --> 00:30:23,960
Speaker 1: X fair system from absolute concentration of control in the

590
00:30:24,040 --> 00:30:29,520
Speaker 1: ends of a small group of grossly inexperienced, nonsophisticated individuals.

591
00:30:29,800 --> 00:30:32,600
Speaker 1: Appears to have all the hallmarks of En Run and

592
00:30:32,640 --> 00:30:36,720
Speaker 1: Bertie Maynoff blended together named Sam Bankman Freed. This is

593
00:30:36,760 --> 00:30:39,959
Speaker 1: the antithesis of anything that is permitted in regulated markets.

594
00:30:40,320 --> 00:30:43,560
Speaker 1: Failed to implement virtually any of the systems or controls

595
00:30:44,200 --> 00:30:46,960
Speaker 1: that are necessary for a company and trusted with other

596
00:30:47,000 --> 00:30:50,960
Speaker 1: people's money, year assets. Justice seems to be you know,

597
00:30:51,240 --> 00:30:53,800
Speaker 1: in process, which I think is welcome by those in

598
00:30:53,840 --> 00:30:56,440
Speaker 1: the in the crypto industry. It's more more information comes

599
00:30:56,480 --> 00:30:58,400
Speaker 1: to a lot. I suspect there is a good chance

600
00:30:58,400 --> 00:31:00,800
Speaker 1: they'll be more people under the microsy go Sure. This

601
00:31:00,880 --> 00:31:07,520
Speaker 1: isn't you know, sophisticated whatsoever. This is just plain old embezzlement. Busy,

602
00:31:07,680 --> 00:31:10,640
Speaker 1: busy today, in the U. S. District Attorney Damian Williams,

603
00:31:10,680 --> 00:31:13,000
Speaker 1: of course, calling the ft X scandal one of the

604
00:31:13,000 --> 00:31:16,040
Speaker 1: biggest financial frauds in American history. But from all the

605
00:31:16,080 --> 00:31:19,440
Speaker 1: fallout of the ft X downfall, will regulators actually get

606
00:31:19,480 --> 00:31:22,320
Speaker 1: a grip on crypto to make it fairer, more reliable,

607
00:31:22,600 --> 00:31:25,120
Speaker 1: so this won't happen again. For more on the regulatory outlook,

608
00:31:25,280 --> 00:31:27,120
Speaker 1: we turned to christ And Smith, the executive director of

609
00:31:27,160 --> 00:31:32,320
Speaker 1: the Blockchain Association, which assists in key policy solutions among regulators, lawmakers,

610
00:31:32,480 --> 00:31:34,600
Speaker 1: public for the digital assets space in particular. You're, of

611
00:31:34,640 --> 00:31:37,560
Speaker 1: course there are said sort of talking some would say

612
00:31:37,600 --> 00:31:40,520
Speaker 1: lobbying on behalf of your members ever labs BH, digital

613
00:31:40,600 --> 00:31:44,320
Speaker 1: bit dear, not f t X, not f t X,

614
00:31:44,400 --> 00:31:48,440
Speaker 1: Thank goodness. We actually had tremendous differences on strategy with

615
00:31:48,520 --> 00:31:50,120
Speaker 1: ft X, and so they were never part of the

616
00:31:50,160 --> 00:31:53,480
Speaker 1: Blockchain Association, And so if there's a silver learning in

617
00:31:53,520 --> 00:31:55,320
Speaker 1: all of this, it's that we don't have to be

618
00:31:55,360 --> 00:31:58,560
Speaker 1: competing with them for strategy in Washington anymore. Okay, So

619
00:31:58,640 --> 00:32:01,240
Speaker 1: talk about strategy, talk about out out of the ashes,

620
00:32:02,240 --> 00:32:04,840
Speaker 1: the roses that will grow that many will hope is

621
00:32:04,840 --> 00:32:07,560
Speaker 1: is an easier playing field. More clear playing field, a

622
00:32:07,600 --> 00:32:11,120
Speaker 1: more transparent playing field. Is that likely because we asked

623
00:32:11,120 --> 00:32:13,120
Speaker 1: our audience, we had a Twitter poll, We asked and

624
00:32:13,160 --> 00:32:16,120
Speaker 1: whether they're confident or not as to whether crypto regulation

625
00:32:16,160 --> 00:32:18,520
Speaker 1: will meet the mark at this moment, and as we

626
00:32:18,520 --> 00:32:22,320
Speaker 1: can bring up like say, don't hold your breath, people

627
00:32:22,320 --> 00:32:25,200
Speaker 1: are on the fence. Yeah, well listen. I think there

628
00:32:25,320 --> 00:32:28,280
Speaker 1: was a really healthy discussion going on in Washington prior

629
00:32:28,360 --> 00:32:31,000
Speaker 1: to the collapse of xd X on what we need

630
00:32:31,040 --> 00:32:34,080
Speaker 1: to do to move forward with crypto regulation. I think

631
00:32:34,120 --> 00:32:37,640
Speaker 1: there's two key areas. One dealing with fiat or dollar

632
00:32:37,720 --> 00:32:40,800
Speaker 1: back stable coins and what those regulatory parameters should look like.

633
00:32:41,200 --> 00:32:43,000
Speaker 1: I also think we were starting to have a healthy

634
00:32:43,000 --> 00:32:46,479
Speaker 1: conversation around what crypto exchange, you know, the spot markets,

635
00:32:46,520 --> 00:32:49,720
Speaker 1: were consumers buy and sell crypto, what the appropriate regulation

636
00:32:49,760 --> 00:32:52,800
Speaker 1: for that should look like. Those are two very clear gaps.

637
00:32:53,160 --> 00:32:55,760
Speaker 1: I think the challenge we have now with this FTX

638
00:32:55,800 --> 00:32:59,800
Speaker 1: situation is the conversation has moved from a small group

639
00:32:59,840 --> 00:33:02,720
Speaker 1: of policymakers who had really taken the time to understand

640
00:33:02,760 --> 00:33:06,680
Speaker 1: this space, to a much broader audience within Congress who

641
00:33:06,760 --> 00:33:09,440
Speaker 1: wants to get involved and do something. So I think

642
00:33:09,480 --> 00:33:12,600
Speaker 1: this is going to slow the legislative process down. But

643
00:33:12,760 --> 00:33:15,040
Speaker 1: I don't think it's going to end the legislative process.

644
00:33:15,080 --> 00:33:18,440
Speaker 1: I think there are tens of millions of American consumers

645
00:33:18,440 --> 00:33:23,440
Speaker 1: who own crypto. Crypto networks are providing incredibly valuable services

646
00:33:23,480 --> 00:33:26,280
Speaker 1: that are going to be the future of a new internet,

647
00:33:26,280 --> 00:33:30,280
Speaker 1: a future of new financial infrastructure. This is innovation that

648
00:33:30,320 --> 00:33:32,760
Speaker 1: we cannot undo and we want to be competitive with

649
00:33:32,800 --> 00:33:35,960
Speaker 1: here in the US, and the regulation. Getting that regulation

650
00:33:36,080 --> 00:33:39,880
Speaker 1: right is key to doing that. Kristen, it's good to see.

651
00:33:40,040 --> 00:33:44,160
Speaker 1: I hope you're well. The mission statement of the Blockchain

652
00:33:44,200 --> 00:33:48,680
Speaker 1: Association is to advance the future of crypto in the

653
00:33:48,760 --> 00:33:53,600
Speaker 1: United States. Has what's happened with FTX, what we've learned

654
00:33:53,640 --> 00:33:59,920
Speaker 1: about Sam bank Man Freed impacted or jeopardize that mission? Well, listen,

655
00:34:00,040 --> 00:34:03,520
Speaker 1: think it's certainly a setback. I mean we've had today,

656
00:34:04,200 --> 00:34:07,840
Speaker 1: we heard about the incredible shortcomings at at f t

657
00:34:08,080 --> 00:34:12,000
Speaker 1: X International UH and its related companies. UM, We've seen

658
00:34:12,080 --> 00:34:15,080
Speaker 1: the charges in the indictments that have come down today.

659
00:34:15,200 --> 00:34:17,200
Speaker 1: I mean, this is really serious stuff. But this is

660
00:34:17,239 --> 00:34:21,680
Speaker 1: incredibly abnormal behavior compared to how most people in the

661
00:34:21,719 --> 00:34:25,719
Speaker 1: crypto community operate. Most people are here because they want

662
00:34:25,760 --> 00:34:30,160
Speaker 1: to empower people because they value transparency. Uh. This is

663
00:34:30,200 --> 00:34:34,920
Speaker 1: a technology, Uh you know that that can empower good

664
00:34:35,000 --> 00:34:36,640
Speaker 1: for the world. And I think it's going to be

665
00:34:36,719 --> 00:34:40,000
Speaker 1: incumbent upon us in the crypto industry to pick up

666
00:34:40,040 --> 00:34:42,880
Speaker 1: the pieces that Sam has left with the mess that

667
00:34:42,960 --> 00:34:45,080
Speaker 1: he has made um and I think it will take

668
00:34:45,120 --> 00:34:47,840
Speaker 1: some time, but I'm optimistic that we will be able

669
00:34:47,880 --> 00:34:51,759
Speaker 1: to move beyond this and return to having positive discussions

670
00:34:51,800 --> 00:34:54,800
Speaker 1: around policy. But more importantly, the builders in this space

671
00:34:54,840 --> 00:34:58,840
Speaker 1: are continuing to create and they're they're bringing forward ideas

672
00:34:58,880 --> 00:35:01,520
Speaker 1: and I think ultimately it will become incredibly obvious to

673
00:35:01,560 --> 00:35:04,920
Speaker 1: everyday people that crypto is a force for good and

674
00:35:04,960 --> 00:35:08,440
Speaker 1: it's here to stay. As you mentioned, Kristen sam Bankmin

675
00:35:08,520 --> 00:35:14,360
Speaker 1: freed charged with eight criminal counts, including conspiracy and wire fraud.

676
00:35:14,680 --> 00:35:17,600
Speaker 1: What was interesting to me is during the testimony of

677
00:35:17,680 --> 00:35:20,680
Speaker 1: the current FCS CEO, you know, he kind of laid

678
00:35:20,719 --> 00:35:24,680
Speaker 1: bare some of the shortcomings of the humans behind f

679
00:35:24,800 --> 00:35:28,880
Speaker 1: t X and Alameda, lack of financial controls, lack of experience.

680
00:35:29,760 --> 00:35:32,000
Speaker 1: My question to you is, what did we learn about

681
00:35:32,080 --> 00:35:35,680
Speaker 1: some of the structural issues in this industry? What are

682
00:35:35,680 --> 00:35:39,560
Speaker 1: the concrete things that need to be fixed with the

683
00:35:39,560 --> 00:35:43,839
Speaker 1: crypto industry and also the underlying technologies that support it. Yeah. Well,

684
00:35:43,840 --> 00:35:47,040
Speaker 1: I think my takeaway from listening to the hearing today

685
00:35:47,200 --> 00:35:50,120
Speaker 1: was that this is not a structural problem within the

686
00:35:50,120 --> 00:35:53,880
Speaker 1: broader crypto industry. This was a structural problem with f

687
00:35:54,040 --> 00:35:58,040
Speaker 1: t X. They didn't have internal controls, they weren't following

688
00:35:58,200 --> 00:36:01,160
Speaker 1: local laws, they weren't meeting their own in terms of service,

689
00:36:01,200 --> 00:36:03,799
Speaker 1: they didn't have any record keeping. UM. I mean, this

690
00:36:03,880 --> 00:36:06,000
Speaker 1: company was a mess. It was it was in some

691
00:36:06,040 --> 00:36:09,200
Speaker 1: ways barely a company. And I think that if you

692
00:36:09,239 --> 00:36:11,719
Speaker 1: look at the way companies in the US that are

693
00:36:11,719 --> 00:36:15,359
Speaker 1: regulated by state money transmitter licenses, who are registered with

694
00:36:15,840 --> 00:36:19,560
Speaker 1: the Financial Crimes Enforcement Network as money services businesses, uh,

695
00:36:19,719 --> 00:36:23,360
Speaker 1: these companies are doing the right things and have taken

696
00:36:23,360 --> 00:36:29,359
Speaker 1: the steps as required under law in order to protect consumers. Um.

697
00:36:29,400 --> 00:36:33,080
Speaker 1: We've also seen companies take further steps and do things

698
00:36:33,160 --> 00:36:36,080
Speaker 1: like proof of reserves, where they're able to show that

699
00:36:36,480 --> 00:36:40,920
Speaker 1: all all customer assets are being held and segregated and

700
00:36:40,960 --> 00:36:43,880
Speaker 1: accounted for. And so I think that this is something

701
00:36:44,560 --> 00:36:47,080
Speaker 1: that policymakers are going to be grappling with as we

702
00:36:47,120 --> 00:36:50,920
Speaker 1: head into three. I do think that they're going to

703
00:36:51,160 --> 00:36:53,800
Speaker 1: have additional hearings with the start of the new Congress

704
00:36:53,840 --> 00:36:56,080
Speaker 1: starting in January, and we're going to see a lot

705
00:36:56,160 --> 00:36:59,120
Speaker 1: of legislative proposals in both the House and the Senate

706
00:36:59,719 --> 00:37:02,480
Speaker 1: that take in attempt to tackle different pieces of this.

707
00:37:02,719 --> 00:37:04,359
Speaker 1: So I think there's a lot of work to do,

708
00:37:04,760 --> 00:37:07,000
Speaker 1: a lot of discussion that's going on, but this is

709
00:37:07,040 --> 00:37:09,120
Speaker 1: an important space and one that we need to make

710
00:37:09,160 --> 00:37:12,920
Speaker 1: sure a lot of maakers get reaped. Blockchain Association Executive

711
00:37:12,960 --> 00:37:15,640
Speaker 1: Director Christin Smith, thank you very much, thanks for having

712
00:37:15,680 --> 00:37:19,200
Speaker 1: coming up. Why the leaderboard of Bloomberg's Billionaire index shifted.

713
00:37:19,600 --> 00:37:34,360
Speaker 1: This is Bloomberg going viral today. There's a new lineup

714
00:37:34,360 --> 00:37:36,960
Speaker 1: of the world's richest people on the Bloomberg Billionaires Index.

715
00:37:37,000 --> 00:37:39,439
Speaker 1: Elon Mask, once worth as much as three and forty

716
00:37:39,480 --> 00:37:43,000
Speaker 1: billion dollars, was dethroned as the world's richest person today.

717
00:37:43,000 --> 00:37:45,800
Speaker 1: Bernard oh No, the founder of LVMH, took the title

718
00:37:45,800 --> 00:37:48,439
Speaker 1: instead for now a mask of force. He has lost

719
00:37:48,440 --> 00:37:50,320
Speaker 1: more than a hundred billion dollars just this year and

720
00:37:50,360 --> 00:37:53,680
Speaker 1: it's now worth well only a hundred and sixty seven billion.

721
00:37:54,239 --> 00:37:57,200
Speaker 1: His drop as the world's richest came as Tesla's market

722
00:37:57,239 --> 00:37:59,719
Speaker 1: value fell below five hundred billion for the first time

723
00:38:00,160 --> 00:38:03,280
Speaker 1: November twenty And of course this is amid concerns about

724
00:38:03,280 --> 00:38:06,960
Speaker 1: the slowing demand for electronic vehicles and Elon Musk's focus

725
00:38:07,320 --> 00:38:10,319
Speaker 1: running Twitter and ed we kind of come full loop here.

726
00:38:10,360 --> 00:38:14,600
Speaker 1: We've talked about the increasing overall valuation of SpaceX no

727
00:38:14,719 --> 00:38:16,919
Speaker 1: distraction there, but the issue with Tesla, and of course

728
00:38:16,960 --> 00:38:19,680
Speaker 1: that is behind in non Musk's wealth. Yeah, this is

729
00:38:19,719 --> 00:38:21,719
Speaker 1: the first time Musk has dropped from the number one

730
00:38:21,760 --> 00:38:24,880
Speaker 1: spot or since he's been number two since September of

731
00:38:24,960 --> 00:38:28,120
Speaker 1: last year, and there's this micro focus on his wealth.

732
00:38:28,160 --> 00:38:31,080
Speaker 1: But we use that Tesla proxy as a proxy for

733
00:38:31,160 --> 00:38:33,480
Speaker 1: kind of the confidence in him. But it is interesting

734
00:38:33,880 --> 00:38:37,080
Speaker 1: that the valuation of SpaceX can continues to go up

735
00:38:37,080 --> 00:38:39,160
Speaker 1: because his fate and their fates are kind of a

736
00:38:39,200 --> 00:38:41,279
Speaker 1: weakly tied at least that's what it says in the

737
00:38:41,320 --> 00:38:46,040
Speaker 1: regulatory filings exactly. And I mean, it's still it's interesting

738
00:38:46,040 --> 00:38:48,600
Speaker 1: that we've got basically a focus on luxury and a

739
00:38:48,680 --> 00:38:51,360
Speaker 1: focus on technology are the still the names that dominate

740
00:38:51,400 --> 00:38:54,840
Speaker 1: in terms of wealth and wealth building. They are still

741
00:38:54,960 --> 00:38:58,000
Speaker 1: dominated by white males, largely at the top of the

742
00:38:58,040 --> 00:38:59,960
Speaker 1: billionaires in next and we hope that that will change

743
00:39:00,480 --> 00:39:02,719
Speaker 1: some way over in the focus on inclusion. But it

744
00:39:02,840 --> 00:39:04,880
Speaker 1: is notable just how far the wealth has fallen just

745
00:39:04,920 --> 00:39:06,960
Speaker 1: still told what was, it's basically half from where it

746
00:39:07,040 --> 00:39:09,239
Speaker 1: used to be. For Elon Usk, Yeah, there's one thing

747
00:39:09,280 --> 00:39:11,600
Speaker 1: you and I Carrow's stocks go up, and stocks go down,

748
00:39:11,640 --> 00:39:13,640
Speaker 1: and they go back up again. And I wouldn't be

749
00:39:13,640 --> 00:39:15,560
Speaker 1: surprised to see you on us wealth climb a little

750
00:39:15,560 --> 00:39:18,239
Speaker 1: bit more exactly. For now, he's number two that does

751
00:39:18,280 --> 00:39:20,400
Speaker 1: it with this addition of Bloembang technology. Do not forget

752
00:39:20,440 --> 00:39:21,600
Speaker 1: to check out our podcast