Speaker 1: From the heart of where innovation, money and power collive
Speaker 1: in Silicon Valley and beyond. This is Bloomberg Technology with
Speaker 1: Emily Jay. I'm Emily Changing San Francisco and this is
Speaker 1: Bloomberg Technology. Coming up in the next hour, Reckless Why
Speaker 1: Russian President Vladimir Putin is being accused of nuclear terrorism.
Speaker 1: We will bring you the latest from the White House,
Speaker 1: plus how the war is affecting tech employees on both
Speaker 1: sides of this fight from Ukraine and Russia. We'll talk
Speaker 1: to two tech employees on the ground and the role
Speaker 1: of crypto and the Russian invasion and how crypto exchanges
Speaker 1: are navigating the crisis and sanctions. Will get the view
Speaker 1: from Crack and CEO Jesse Powell. As we continue to
Speaker 1: cover the situation in Ukraine, we are talking to tech
Speaker 1: leaders and employees where it's hitting closest to home. Today
Speaker 1: we bring you the stories of Matthias Clink, CTO and
Speaker 1: co founder of past Base, who is working around the
Speaker 1: clock to help employee stuck in Ukraine, as well as
Speaker 1: Russian employees who have fled the country. Also joining us
Speaker 1: in Samir, a product designer at Salondo who's also a
Speaker 1: Russian citizen. And relocated to Germany back in August, but
Speaker 1: still has family and friends in Russia. Mattias and Essa,
Speaker 1: thank you both so much for joining us and as
Speaker 1: I want to start with you, you decided to leave
Speaker 1: Russia months ago because you felt this tension escalating. Your
Speaker 1: parents are still there, your friends are still there. How
Speaker 1: are you doing and how are they doing? Um? Well,
Speaker 1: thank you for asking. It's it has been complicated, of course,
Speaker 1: so I hope for the best. That's what I can say.
Speaker 1: President Putin, we're hearing could soon declare marks a law.
Speaker 1: He is already cracking down on the media. This means that,
Speaker 1: you know, the borders could be closed. Um, it could
Speaker 1: be more difficult to protest illegal Uh to protest. I
Speaker 1: know one of your friends I believe, was arrested for protesting.
Speaker 1: What do you think, What do you think about all this? Well?
Speaker 1: What can I think? Well, it's it's it's awful. It's
Speaker 1: just awful. So I cannot fully believe this situation is happening. So, um,
Speaker 1: we all in the country I think just missed this point.
Speaker 1: When this the things get so bad and so wrong. Mattis,
Speaker 1: you have both Ukrainian and Russian employees You've got Ukrainian
Speaker 1: employees I believe who are still in the country and
Speaker 1: Russian employees who have left. How are you navigating all
Speaker 1: of this and the challenges that both of these employees
Speaker 1: are facing. Yeah, it's, um, of course, like a very
Speaker 1: tough situation. UM. I think what we do in the
Speaker 1: first place is really try to support our team members
Speaker 1: with like support and safety. Basically, some of these team members, UM,
Speaker 1: since they're like currency got like incredibly devalued. Basically all
Speaker 1: their life savings is like are basically gone. So we're
Speaker 1: like working with them of course in ensuring that they
Speaker 1: still can get their like salary even though some of
Speaker 1: their like financial institutions now are on the sanctional list.
Speaker 1: So this is like one one part of course what
Speaker 1: we do for our Russian team members and in helping
Speaker 1: them and providing them safety. And at the same time,
Speaker 1: of course we're working both with the Ukrainians and Russians
Speaker 1: and helping them to relocate if they want that. Um,
Speaker 1: some of them can't, so, especially like the ones who
Speaker 1: are in Ukraine, UM, they're basically sent back at the
Speaker 1: border and almost called to arms and told that they
Speaker 1: have to fight. And it's of course like a very
Speaker 1: test situation for them as well. So that's in that
Speaker 1: sense what we're trying to do is um how helped
Speaker 1: them at least um to stay and find a location
Speaker 1: where they can work from you like see that they
Speaker 1: can have access to internet, um and and just like
Speaker 1: trying to somehow manage the situation with them together. You're
Speaker 1: a young startup, I mean, are you saying that these
Speaker 1: employees they're still working, they're still shipping code, doing their
Speaker 1: jobs in the middle of a war. Yeah, this is
Speaker 1: pretty much insane. It's about like thirty of our of
Speaker 1: our engineering team as either Russian or Ukrainian, and you
Speaker 1: can imagine probably that the productivity is far more than
Speaker 1: like even more impacted by that. And it doesn't even
Speaker 1: stop there, you know, like we have team members also
Speaker 1: in Buphrenia and some countries close by or human Germany,
Speaker 1: um and pretty much everyone here in Europe is like
Speaker 1: heavily heavily impacted by this situation. And on the one
Speaker 1: side tries to support our team members who are like
Speaker 1: literally in the midst of this, but also we as
Speaker 1: like a leadership team of course provide um um the
Speaker 1: space that they can show Basically um, their support for them.
Speaker 1: And and also um, we canceled meetings that they can
Speaker 1: go on protests for example here in Berlin. So this
Speaker 1: is at least the minimum what we as a company
Speaker 1: can do is creating the space for them to to
Speaker 1: so social engagement here. And as your friends who are
Speaker 1: still in Russia, your parents who are still in Russia,
Speaker 1: are they trying to leave? Do they want to leave?
Speaker 1: Do some of them support this war? I know many
Speaker 1: many people do not. Yeah, that's true, many people do
Speaker 1: not support the war. And none of their friends and
Speaker 1: my family, none of the people if my clothes circle
Speaker 1: is support. But I hear the stories also from some
Speaker 1: of my friends that they do not speak with their
Speaker 1: parents anymore because the parents see it tends to see
Speaker 1: the situation differently. So um, and yeah, the majority of
Speaker 1: people is trying to escaped Russia right now, I would
Speaker 1: say that almost how of my closest circle managed to
Speaker 1: escape in Armenia and Georgia and closest countries. Of course,
Speaker 1: it's not that easy with my parents because they had
Speaker 1: already they retired. Um, so I don't really know how
Speaker 1: to support them in this situation. So um, But yeah,
Speaker 1: these sanctions are getting tougher every day sanctions coming in
Speaker 1: from them around the world. How is this impacting everyday Russians?
Speaker 1: Obviously the target is wealthier Russians, but how is this
Speaker 1: impacting the people that you know who maybe had nothing
Speaker 1: to do with this? Yeah, that's that's true. It impacts
Speaker 1: people in every way. So basically, my parents lost almost
Speaker 1: all of the savings just basically overnight or in the
Speaker 1: in the course of livel last week. The same I
Speaker 1: can say with some of my friends also, a lot
Speaker 1: of them was receiving their salaries in Russian troubles. So
Speaker 1: also with all this situation, with the companies starting to
Speaker 1: prove stopping to provide their services in the country, Uh,
Speaker 1: we can already see a lot of change, and I
Speaker 1: think it's going to be only more of them unfortunately, Mattias,
Speaker 1: is there any way that you can describe ideologically how
Speaker 1: this is impacting your company, given how much of your
Speaker 1: team is Ukrainian or Russian and how emotionally difficult this is. Yeah,
Speaker 1: and so absolutely. Um. I mean what we also offered
Speaker 1: is of course mental health support to all our team
Speaker 1: members were affected by that, and um it's it's just
Speaker 1: like a really tough time, and um, I think we
Speaker 1: just need to help key members really to go through
Speaker 1: this this tough time and help them and not only
Speaker 1: them but also like their relatives, um to come to
Speaker 1: Germany if it's possible, and relocate them if they want that.
Speaker 1: But it's it's just like such a such a such
Speaker 1: a sad thing, what's happening right now, And it's it's
Speaker 1: at the same time, you also feel like a feeling
Speaker 1: of like powerlessness, um because you only have like very
Speaker 1: limited impact on that here from from from from Germany. Basically,
Speaker 1: how concerned should we be about the tech industry given
Speaker 1: the deep bench of tech talent in this country, in
Speaker 1: both of these countries, and the fact that they these
Speaker 1: people are working for companies global companies around the world.
Speaker 1: Are are you worried for? Uh? You know the supply,
Speaker 1: You know that the great talent that all of these
Speaker 1: developers and engineers and product designers UM possess and have
Speaker 1: to give back to the world. M So, so what
Speaker 1: I think what is going to happen likely in the
Speaker 1: next coming of weeks is of course that more team
Speaker 1: members will try to either leave Russia and Ukraine to
Speaker 1: more western European countries and I think this is also
Speaker 1: what in as I just touched upon that some of
Speaker 1: her friends already tried to to leave. So I think
Speaker 1: in the short term this is of course there's like
Speaker 1: a high impact, especially for teams like us who have
Speaker 1: um a lot of team members in one of those countries. Um.
Speaker 1: Long term, I think, and this is already what we
Speaker 1: saw from the European Union, which I strongly welcomed, is
Speaker 1: that we are like very very like friendly towards giving
Speaker 1: visas towards those people impacted by the situation. And um,
Speaker 1: I think this is absolutely the right move to to
Speaker 1: like protect civilians and allowed them basically to escape from
Speaker 1: this tragedy and and bad situation in those countries. And
Speaker 1: as you have leafter country, your parents are still there,
Speaker 1: your friends are still there. How do you see your
Speaker 1: near future? How do you imagine this ending? That's a
Speaker 1: tough question. Um. Of course I will try to help
Speaker 1: my friends to escape. I helped them to get the
Speaker 1: job in Germany. Um, with the parents, it's much difficult
Speaker 1: because as I sat there in the or quite an
Speaker 1: old age right now, my only hope right that when
Speaker 1: this situation would started to decrease, I mean the heat
Speaker 1: of it. Um that maybe some countries would will still
Speaker 1: open their borders. We'll still have the old borders opened
Speaker 1: with Russia, and I can at least, um like, invite
Speaker 1: my my parents there and we can meet during a
Speaker 1: short vacation. That's all I can hope or right now
Speaker 1: probably no more. Do you think you'll ever go back
Speaker 1: to Russia? Um, that's also a tough hian. I don't
Speaker 1: think so. Like so, I wouldn't say like never, but
Speaker 1: unless this regime is um is in power, I would
Speaker 1: rather not too. I would go there only if I
Speaker 1: definitely have to do it, like I have some family
Speaker 1: business to do. But personally I'm afraid of my safety
Speaker 1: if I would go there, I would I cannot be
Speaker 1: sure that I can get back to Germany and as
Speaker 1: a mere product designer at Salando, Russian citizen Matias clank
Speaker 1: Cyto and co founder of past Pace, thank you both
Speaker 1: for joining us for sharing our story. We hope that
Speaker 1: you both stay safe. Much more coming up Bumbloomer Technology.
Speaker 1: Stay with us. This is Bloomberg. Welcome back to Bloomber Technology.
Speaker 1: I'm emily changing in San Francisco. How our investors hedging
Speaker 1: ge political risk in Ukraine are crety. Gupta has been
Speaker 1: digging into that crety. What you've seeing, Yeah, I mean
Speaker 1: it's a pretty straightforward trade here, Emily. You are seeing
Speaker 1: the surging oil price surgeon commandity prices, so naturally you
Speaker 1: do get that exposure in the stock market, but you
Speaker 1: will also get it through defense names. It breaks pretty
Speaker 1: set a lot of sense as you start to see
Speaker 1: a lot of these European nations really ramp up their
Speaker 1: defense seeing some of those lessons from Ukraine, Naturally they
Speaker 1: go to the number one maker or export i should say,
Speaker 1: of defense kind of companies now, of course, as the
Speaker 1: United States. So check out this e T F the
Speaker 1: three major e T s. You can see the flows
Speaker 1: have just skyrocketed, going back all the way two years,
Speaker 1: moves that you haven't even seen during the trade war
Speaker 1: between the Nine States and China. But this isn't the
Speaker 1: only kind of defense they're looking at. Emily. We are
Speaker 1: on day nine of the Russia and Ukraine war, and
Speaker 1: you can see very clearly people are betting on cyber
Speaker 1: security as a really key piece of that defense strategy.
Speaker 1: And of course we do know that Russia does have
Speaker 1: an upper hand. They are very strategic in using cybersecurity measures.
Speaker 1: That has been one of their criticism in the past.
Speaker 1: So if you actually look at the stocks coming we're
Speaker 1: saying the past two weeks, for example, you can really
Speaker 1: see that these uh names, names like Paula Alto, crowd Strike,
Speaker 1: that really kind of specialized in cybersecurity, they're the ones
Speaker 1: that are getting the bid. Basically an assumption that a
Speaker 1: lot of corporate America is going to start looking to
Speaker 1: cybersecurity names to ramp up their own defense systems. Emily, Okay, pretty,
Speaker 1: thank you for that round up. Meantime, the tech world
Speaker 1: has wasted little time announcing plans to cut business ties
Speaker 1: with Russia over this unprovoked invasion of Ukraine. Just this
Speaker 1: week we saw Apple, Oracle, Disney, met At, Spotify, Microsoft,
Speaker 1: just to name a few. But not everyone is following suit.
Speaker 1: Earlier this week, the CEO of we Work had this
Speaker 1: to say on Bloomberg. We have just four locations in Moscow.
Speaker 1: We're doing incredibly well. We are as a right now
Speaker 1: over nine de percent occupied. It's a small part of
Speaker 1: our business. Uh. You know, the revenue is about top
Speaker 1: line revenues about ten million dollars on our base of
Speaker 1: several billion dollars, so it's a very small part of
Speaker 1: our business, so you know, not much of a financial
Speaker 1: low business. In back to our business. Since that comment,
Speaker 1: we Work announced it's partnering with the UN to help
Speaker 1: the more than one million refugees who fled Ukraine, adding
Speaker 1: it's also offering flex space across Eastern Europe to displaced
Speaker 1: Ukrainian businesses. However, we work still operating in Russia. I
Speaker 1: want to talk more about all of this with Alfred Trong,
Speaker 1: general partner at Race Capital. Alfred, I want to start
Speaker 1: a big picture we are witnessing. You are no stranger
Speaker 1: to witnessing global conflict and the impact on global and
Speaker 1: local economies. Just how chilling do you think the impact
Speaker 1: of this invasion of Ukraine will be on the global
Speaker 1: economy and on the tech industry. Emily, thank you for
Speaker 1: having me back for good to steal um. Well, this
Speaker 1: this is a very personal metaphor me because I when
Speaker 1: I will see you a b a system. Uh. In
Speaker 1: September eleven, we lost the employees one of the Towel,
Speaker 1: one of flight and free so um, I like a
Speaker 1: part of me have ever died when those kind of
Speaker 1: things happened, And I have to be the one to
Speaker 1: call it a family. It was very very tough time
Speaker 1: and you know what these are chilling experience and memory.
Speaker 1: So for me, UM, I think this impact is going
Speaker 1: to be a very long term and very big. UM.
Speaker 1: I've been wanting our own companies and also that will
Speaker 1: have offices and employees in the Ukraine for quite sometimes
Speaker 1: since early January, to take measure and set a backup
Speaker 1: plans for having backup offices in neighboring countries. I think, goodness,
Speaker 1: at this point, I have we have everyone accounted for
Speaker 1: and they have now since safely have been in moved
Speaker 1: to safe places and they continue have been able to
Speaker 1: resume working. But it's an extremely scary time. Money has
Speaker 1: been pouring into startups over the last couple of years.
Speaker 1: Do you think that's going to slow down? UM? I
Speaker 1: think UM likely not because of justice invasion. UM, without
Speaker 1: any doubts. UM. We are going to be seeing, um,
Speaker 1: some of the softening and the ipeo market. You know,
Speaker 1: some people believe the ipeo market is temporary close so
Speaker 1: when you have liquidity kind of all sudden drying up.
Speaker 1: We will be seeing some late stage deals softening up
Speaker 1: on valuations or maybe even having some early signs of
Speaker 1: you know, difficulty and fundraising, but it's going to take
Speaker 1: a long time before it trigger down to the early
Speaker 1: stage deals. In particular, I think most of the venture
Speaker 1: investor have raised a lot of money for at this time,
Speaker 1: so we have a lot of dry power to continue
Speaker 1: to invest in companies. Um the view of investment those
Speaker 1: company obviously over time will change, you know, because think
Speaker 1: about this like our own company and that web that
Speaker 1: buys them like take to take everything about the sanction
Speaker 1: very seriously. So if they are selling two Russias, they
Speaker 1: will have to be very careful and we have to
Speaker 1: assume some of those customers will have to say goodbye
Speaker 1: to so that will have impact. The European market has
Speaker 1: been extremely hard for early stage slide of for the
Speaker 1: last fel of months. There's no doubt that will be
Speaker 1: impacted in this coming year, you know, the rest of
Speaker 1: twenties two, So those impact we're going to be feeling
Speaker 1: pretty well. So full startups, I all advise them to
Speaker 1: be careful with their cash and to have you know,
Speaker 1: ample run ray and be careful if they want to
Speaker 1: be going out to fundraise, to do it early and
Speaker 1: do it diligently. Now. We just went through the list
Speaker 1: of businesses cutting ties to Russia. I spoke with Brian Chesky,
Speaker 1: the CEO of Airbnb, just a couple of days ago,
Speaker 1: and asked whether or not Airbnb would cut off service
Speaker 1: to Russia. Take a listen to what he had to say,
Speaker 1: just a couple of days ago. Are you willing to
Speaker 1: consider uh, you know, tougher self shanctioning in Russia, even
Speaker 1: though you know, you know it sounds like hosts are
Speaker 1: limited right now based on what they can do, But
Speaker 1: would Airbnb consider going so far as to cut off
Speaker 1: the service. I think all things are on the table
Speaker 1: right now, so we're really focused right now. I've been
Speaker 1: working around the clock with the team to try to
Speaker 1: figure out how can we have a hundred thousand refugees
Speaker 1: from Ukraine. But we have another team working with local
Speaker 1: governments and really trying to answer these questions. And if
Speaker 1: we have an update, we'll certainly let you know. Brian
Speaker 1: Tansky tweeting last night that Airbaby is indeed now cutting
Speaker 1: off service to Russia and Belarus, is this something that
Speaker 1: you think all companies should be doing? Well, that's that's
Speaker 1: definitely the advice I've been giving to your own startup CEO.
Speaker 1: So we actually most of our company have come to
Speaker 1: me over the loss Um weekend. In particular, we're seeing
Speaker 1: open source companies seeing huge amount of package download from
Speaker 1: Russia and some of the see what was calling me
Speaker 1: and said what should I do? So I've been advising
Speaker 1: them as at this point in time, you must block
Speaker 1: because we honestly don't know how to sanction you know,
Speaker 1: where does it lie and what our responsibility of. But
Speaker 1: you know, we also have to play our part right,
Speaker 1: so what is right has to be right. I mean,
Speaker 1: this is a time where we all have to step up,
Speaker 1: you know, to have more engages to know what's the
Speaker 1: right thing to do. And one of the thing I
Speaker 1: would like to add though, the Russian people are innocence right,
Speaker 1: so most of them they have nothing to do with
Speaker 1: this wall. So we we we've got to be very
Speaker 1: careful we don't ended up discriminating. Many of our friends
Speaker 1: that are good friends are doing the right thing that Russians,
Speaker 1: so we've got to have that distinction, very very careful. Right,
Speaker 1: there's a line between you know, a fine line between
Speaker 1: who is this affecting and clearly these sanctions are impacting
Speaker 1: a lot of everyday Russian citizens. To that point, how
Speaker 1: much money is in the venture capital ecosystem, how much
Speaker 1: Russian money is in the venture capital ecosystem, and should
Speaker 1: founders be questioning whether to take that money, should they
Speaker 1: return that money? Yeah? So for us obviously for us,
Speaker 1: we have never taken any of the Russian money um
Speaker 1: for our fun for the people to invest in our fun.
Speaker 1: I'm sure that through this time they are people that
Speaker 1: directly and directly have invested into venture capital, directly in
Speaker 1: the direct us in the companies over this time. But
Speaker 1: I think those are the things where we need our
Speaker 1: government to guide us to know what's going to be
Speaker 1: that lining and money that they have taken to actually
Speaker 1: ingrained in the spending of the company, What do we
Speaker 1: do with them? Those obviously are not for me to judge.
Speaker 1: Those are actually we need um guidance from the State
Speaker 1: Department and you know exactly what to do. I mean,
Speaker 1: we we've seen this movie before. We have you know,
Speaker 1: the serverest, you know when we have shut down, you know,
Speaker 1: funding from China and then I think overall very smoothly
Speaker 1: industry and also you know the tech companies were able
Speaker 1: to direct very quickly and we'll be able to tuck
Speaker 1: right in line and be able to comply to all
Speaker 1: the all the needs. At this point in time, I
Speaker 1: think we're still too early. It's very chaotic. I think
Speaker 1: the most important thing to do is to worry about
Speaker 1: the people. If we have employees, when we have companies,
Speaker 1: we have founders who have to make sure that them
Speaker 1: and their families are safe. That's job one. What about
Speaker 1: venture capitalists? Venture capitalists are very powerful, They've got a
Speaker 1: lot of money. They're typically more quiet. Should they be
Speaker 1: taking action cutting ties? Uh, you know, pulling people out
Speaker 1: of funs, you know, cutting off partnerships. Um, Actually, I
Speaker 1: think some of them must not as far as you think.
Speaker 1: I know that I have good friends. You know, they've
Speaker 1: went very large funds, They've been very active, They've created email.
Speaker 1: It is, there's a lot of actions have been taken
Speaker 1: to help the Ukrainian people, you know, during the situation. Now,
Speaker 1: I'm sure that I think in the days and the
Speaker 1: weeks to come, we're gonna see actions from venture funds
Speaker 1: of taking actions. You know, also in terms of sunctioning
Speaker 1: what the Russian money coming in. We all have to
Speaker 1: do our part. It can be just you know, at
Speaker 1: a very very macro level. You know, I think at
Speaker 1: a fine green level, we all have to do our part.
Speaker 1: I'm sure this is coming. Alfred Trunk, Race Capital General partner,
Speaker 1: thank you for sharing your prospective here with us. Coming up,
Speaker 1: we're gonna be doing my crack and CEO Jesse Pale
Speaker 1: a deep dive on the role of crypto in the
Speaker 1: Russian invasion and the Ukrainian resistance and how is crypto
Speaker 1: exchange is navigating the crisis and calls to cut Russia off.
Speaker 1: This is Bloomberg. The crypto industry has gotten a lot
Speaker 1: of attention after Russia's invasion of Ukraine, some government officials
Speaker 1: wondering whether Russia or the country's tycoons might be able
Speaker 1: to skirt sanctions using crypto, and Ukraine actively seeking donations
Speaker 1: via digital assets. But finance, coin based cracking and more
Speaker 1: have come out against blanket bands on Russian users. I
Speaker 1: want to bring in cracking CEO Jesse Powell for more
Speaker 1: on this. Look. Jess, you've been very clear that cracking
Speaker 1: won't freeze the accounts of general Russian users. Given the
Speaker 1: events of the last twenty four hours, Putin's escalation of
Speaker 1: this war. Does your position on that still stand? They
Speaker 1: still stand? You know, It's it's really hard to know
Speaker 1: as a private business, you know, which doesn't have a
Speaker 1: major global geopolitical analyst function inside of trying to evaluate
Speaker 1: these these situations play by play. Um. You know, we
Speaker 1: look at our role as being able to follow executive
Speaker 1: orders from the White House, being able to follow O
Speaker 1: fak and and sanctions coming from the government. We're very
Speaker 1: happy to comply with those. We've got a long history
Speaker 1: of working with governments and law enforcement. Um, but to
Speaker 1: ourselves just decide to impose account freezes on individual Russians
Speaker 1: who probably don't support this invasion. I think it's a
Speaker 1: bit a step too far. And you know, it's freezing
Speaker 1: someone's finances is more than just sort of stopping selling
Speaker 1: them shoes or uh, photo filters. You know, it's it's
Speaker 1: a pretty extreme measure, and uh, we won't do it until,
Speaker 1: um we're forced to do it by the government. We
Speaker 1: know the Department of Justice is going after luxury assets
Speaker 1: of Russian tycoons, including crypto assets. Have you been contacted
Speaker 1: by enforcement officials? Are you cooperating and what do you
Speaker 1: think the role is of exchanges in that respect. Yeah,
Speaker 1: I mean Cracking dealt with law enforcement requests last year. UM,
Speaker 1: so we're in regular contact with with law enforcement and
Speaker 1: regulators and governments around the world pretty much at all times.
Speaker 1: You know, we get more than ten requests per business day,
Speaker 1: so we're actively in communication. We've got a seven compliance
Speaker 1: team of over six hundred people who is monitoring the
Speaker 1: situation and ready to respond to sanctions or any kind
Speaker 1: of executive order coming from the government. UM. As a
Speaker 1: US based company, we're obviously following the rules of the
Speaker 1: United States, and so when we hear from the government
Speaker 1: that there's something to do, we will comply and and
Speaker 1: we'll do that. Do you see the legal risk though
Speaker 1: as escalating? And are you consulting with officials actively to
Speaker 1: assess that and figure out what Cracking should be doing.
Speaker 1: It's it's an ordinary course of business for us. Is
Speaker 1: not really anything special to do here. We're monitoring the situation. UM.
Speaker 1: You know, we're sort of passive here and that the
Speaker 1: government can contact us at any time. We have regular
Speaker 1: contact with the government, UM and many governments around the world,
Speaker 1: and so UM there's not sort of an active dialogue
Speaker 1: going on about what we're going to do outside of
Speaker 1: any kind of formal regulatory requirement. Now ch Analysis is
Speaker 1: reporting data that shows Russians residents and sanctions hit Russia,
Speaker 1: they're not in a hurry to trade on crypto exchanges.
Speaker 1: Is that what you're seeing? What color can you give
Speaker 1: us on volume and liquidity? Well, you know, cracking doesn't
Speaker 1: have a ruble market, and so if Russians did historically
Speaker 1: want to get money into Cracking, they would have to
Speaker 1: be going through the Euro or the dollar, you know,
Speaker 1: generally through the Swift wire system to get money in.
Speaker 1: And now that banks are shut off from Swift in Russia,
Speaker 1: it's going to be very hard for people in Russia
Speaker 1: to get money out of the country and into the
Speaker 1: global crypto ex changes. So I think they're gonna have
Speaker 1: a tough time there. Um, we haven't seen much activity
Speaker 1: coming out of Russia. You know, people might have already
Speaker 1: had their money in cracking. They're still free to trade it,
Speaker 1: they're free to withdraw their cryptocurrency out of cracking, but um,
Speaker 1: there hasn't been a lot of activity, and I think
Speaker 1: that's largely due to to the sanctions that are in
Speaker 1: place now on the banking system. People just can't get
Speaker 1: their money in and out of the country now. And
Speaker 1: what about crypto going in and out of Ukraine. Obviously
Speaker 1: we know that uh Ukraine has raised millions of dollars
Speaker 1: worth of digital assets. What kind of volume in liquidity
Speaker 1: are you seeing there? Yeah, huge ticket activity around the Ukraine. Obviously,
Speaker 1: tens of millions of dollars have been donated directly with cryptocurrency,
Speaker 1: and I think that's an amazing story to follow that
Speaker 1: the government has directly raised money from all over the
Speaker 1: world to to finance the defense and people are able
Speaker 1: to through through crypto crowdfunding, able to to support people
Speaker 1: directly without any sort of intermediary um. And you know,
Speaker 1: we saw something similar in Canada as well, when when
Speaker 1: the government of Canada sanctioned its own citizens and turned
Speaker 1: off protesters from the banking system. Cryptocurrency was there too
Speaker 1: to continue to support people and be that financial rail
Speaker 1: of last resort, you know, where the government had provoked
Speaker 1: those permissions. Ukraine is calling for more crypto donations, not
Speaker 1: just in the form of bitcoin, but does and tether.
Speaker 1: We've seen some mixed results here. Do you see the
Speaker 1: scope of digital assets as a force for good or
Speaker 1: is it more complicated than that. Definitely a force for good.
Speaker 1: I think currency choice generally is a force for good.
Speaker 1: I think the um the sort of d weaponization of
Speaker 1: the financial system is a good thing. And you know,
Speaker 1: we look at sanctions against Russia as generally a good thing,
Speaker 1: a good way to to non violently, non physically respond
Speaker 1: to uh, you know policy that we don't like. Um, well,
Speaker 1: those those same weapons that we impost on Russia. The
Speaker 1: sanctions can also be imposed against your own citizens, and
Speaker 1: we've seen this happen in many countries around the world,
Speaker 1: obviously Canada most recently, but um. You know, often regimes
Speaker 1: turn inward against their own people. And when that happens, Um,
Speaker 1: once funds are frozen, it's very hard to leave that situation.
Speaker 1: And so cryptocurrency is something that sort of exists as
Speaker 1: sort of cash under the mattress. UM. You know that
Speaker 1: you can take with you if you want to get
Speaker 1: out of a bad situation. If your bank account has
Speaker 1: been frozen without due process. You know, when your funds
Speaker 1: are frozen without due process, that means it's on you
Speaker 1: to go back and fight to get that back, and
Speaker 1: without any money to do that, you know, you're worried
Speaker 1: about feeding your family. You don't have money to pay
Speaker 1: a lawyer to try to go get your money back
Speaker 1: that's been frozen in your bank account. So I think
Speaker 1: a lot of people are looking at crypto now as
Speaker 1: as a sort of backup plan, you know, as an
Speaker 1: insurance policy against their government turning against them. What's your
Speaker 1: take on the macro risks right now, though, What are
Speaker 1: you most concerned about, especially as it pertains to cryptocurrency.
Speaker 1: I know you and I have had a lot of
Speaker 1: conversations about price and bitcoin going to the moon, in
Speaker 1: your words, and we've certainly seen bitcoin rallying but then
Speaker 1: also pull back. Are you concerned about the risks to
Speaker 1: crypto given what we're seeing in global equities? No, you know,
Speaker 1: I think I think you just look at the long
Speaker 1: term tenure chart of bitcoin, and you know, it's outperforming
Speaker 1: everything else in the world, So I'm not worried about it.
Speaker 1: And these kinds of geopolitical problems you know we're seeing
Speaker 1: with Canada and Russia are great examples of where bitcoin
Speaker 1: really shines, you know, outside of being a speculative asse
Speaker 1: at it's really solving real problems for people on the ground.
Speaker 1: And I think the more people are going to see that,
Speaker 1: and it's going to become an even bigger thing as
Speaker 1: people look to bitcoin as a safe haven. Crack and
Speaker 1: CEO Jesse Powell, Jesse, always good to have you here.
Speaker 1: Thanks for sharing your perspective with us, appreciate it. In
Speaker 1: early March, Apple plans to unveil an iPhone SC with
Speaker 1: five G, but the big announcement should really be a
Speaker 1: significant price cut to the current SC. The model currently
Speaker 1: costs four, but if Apple really wanted to, it can
Speaker 1: lower the current model to two and turn it into
Speaker 1: a full featured, low price phone for areas like South America,
Speaker 1: parts of Asia and Africa that are currently Android strongholds.
Speaker 1: Two phone would make the current SC an extremely hot
Speaker 1: seller to those who don't need the functionality of five
Speaker 1: G or a thousand dollar plus iPhone thirteen. By expanding
Speaker 1: its user base with a two indre dollar device, Apple
Speaker 1: could create more long term services revenue and add way
Speaker 1: more people to its ecosystem fairly quickly. Dropping the price
Speaker 1: of the an SC two bucks would also give Apple
Speaker 1: an easy answer to its iPod touch conundrum that would
Speaker 1: allow the company to quite frankly discontinue the three year
Speaker 1: old iPod at the same price. Such a device could
Speaker 1: also greatly assist Apple in India. That's a market that
Speaker 1: Apple once talked up as it's next China, but one
Speaker 1: that's really been a bit of a roller coaster for
Speaker 1: the company in recent years. Recent data points the sub
Speaker 1: five percent market share for Apple in India, but the
Speaker 1: average phone price in the country is now about two
Speaker 1: meaning that Apple could potentially have a winner on its
Speaker 1: hands there with a nice price cut. Still, it's unclear
Speaker 1: if Apple actually ever do this, but there may be
Speaker 1: no better time than this March, when Apple plans to
Speaker 1: release a new high end five G I phone sc
Speaker 1: I'm Mark Erman. This is power On. Don't forget. You
Speaker 1: can subscribe to Mark's weekly power On newsletter at Bloomberg
Speaker 1: dot com and we'll be following that Apple event next week.
Speaker 1: Apple updating its return to office policy meantime, the company
Speaker 1: setting April eleven as the deadline for operate employees to
Speaker 1: return to in person work at least one day a week,
Speaker 1: marking a key test of whether the tech giant can
Speaker 1: re establish office life in a post pandemic era. This
Speaker 1: coming a few days after Google sets its own return
Speaker 1: to office for April four, and Meta is actively looking
Speaker 1: at halting all advertising in Russia. A Corey, a vice
Speaker 1: president for Global Business Nicola Mendelssohn. She spoke to my
Speaker 1: colleague Caroline Hyde earlier. Take a listen to what she
Speaker 1: had to say about Meta's actions when it comes to
Speaker 1: advertising in Russia. To listen. We are taking extensive steps
Speaker 1: across all of our apps to ensure the safety of
Speaker 1: our community and also to support the people who are
Speaker 1: using our services, both in the Ukraine and all over
Speaker 1: the world as well. We've established a special operations center.
Speaker 1: It's working around the clock. It's responding to activity that
Speaker 1: we're seeing on our platforms in real time, and we're
Speaker 1: really closely, you know, monitoring the situation. We'll be monitoring that,
Speaker 1: of course. I'm Emily Chang. This is Bloomberg