WEBVTT - The Number One Risk With Crypto Lending | Alex Mashinsky 0:00:13.920 --> 0:00:16.680 Hey, guys, welcome to another episode of the Market Disruptors Show. 0:00:17.120 --> 0:00:20.919 I am here with Alex Maschinski from Celsius. He probably 0:00:20.960 --> 0:00:23.439 doesn't need much of an induction introduction, but welcome to 0:00:23.480 --> 0:00:26.279 the show. Alex, Thanks for having me. How are you. 0:00:27.400 --> 0:00:30.360 I'm doing great, Thanks so much for thanks for joining I. Uh, 0:00:30.560 --> 0:00:32.440 like I said, you probably don't need much of an introduction. 0:00:32.520 --> 0:00:36.400 You're pretty well known throughout the industry because you're one 0:00:36.400 --> 0:00:38.480 of the hardest working guys around the industry, I guess. 0:00:39.080 --> 0:00:40.760 But but for those that maybe don't know, just tell 0:00:40.840 --> 0:00:43.279 us a little bit about you know, how you got 0:00:43.280 --> 0:00:45.840 to the space and what you're doing right now. Sure. 0:00:46.280 --> 0:00:51.040 So I founded the Celsius Network with Daniel and two 0:00:51.120 --> 0:00:55.800 years ago, and our mission was too really scale the industry. 0:00:55.840 --> 0:00:58.880 We felt that the industry is kind of stuck, uh 0:00:58.960 --> 0:01:00.760 with a number of viewers or is with like the 0:01:00.760 --> 0:01:02.720 type of people that are in it, and we couldn't 0:01:02.720 --> 0:01:05.840 get to like mass adoption. So we thought that if 0:01:05.880 --> 0:01:08.479 we created a product that acted in the best interest 0:01:08.520 --> 0:01:11.520 of the community and are in the yield, we could 0:01:11.520 --> 0:01:14.240 bring seven and a half billion people to crypto because 0:01:14.280 --> 0:01:16.319 that's what everybody's looking for. So we think that we 0:01:16.360 --> 0:01:22.199 found kind of like that the magic utility that everybody wants, right, 0:01:22.280 --> 0:01:25.120 And uh, I guess we're doing good because everybody is 0:01:25.120 --> 0:01:29.000 now trying to copy us coin Base and finance and 0:01:29.040 --> 0:01:32.600 all these guys are now even charl Schwap stopped charging 0:01:32.720 --> 0:01:36.920 fees for you know, so it's like, so we're dragging 0:01:36.959 --> 0:01:40.560 everybody with us, but still Celsia space six seven times 0:01:40.560 --> 0:01:44.200 more than everybody else and we paid more bitcoin to 0:01:44.480 --> 0:01:47.360 our users and all the other guys put together, so 0:01:47.800 --> 0:01:50.920 we have a lot of very happy customers. Yeah, so 0:01:50.960 --> 0:01:53.080 to to kind of break that down, I mean, you're 0:01:53.080 --> 0:01:55.960 wearing a shirt that says total um. So for the 0:01:56.000 --> 0:01:58.240 people that want to hold all that one just they 0:01:58.280 --> 0:02:00.240 don't want to sell, they want to hold. It gives 0:02:00.280 --> 0:02:02.760 them an option to start earning interest on those tokens 0:02:02.760 --> 0:02:04.520 as opposed to selling them if they want to access 0:02:04.560 --> 0:02:08.840 them for liquidity, which seems like a pretty good method. Now. 0:02:09.240 --> 0:02:11.520 I know when we talked in the past, you really 0:02:11.560 --> 0:02:14.120 wanted to give people an option other than the banks, 0:02:14.160 --> 0:02:16.800 because the banks are basically taking money on deposit and 0:02:16.800 --> 0:02:18.400 loaning it out, but they don't pay anything, right, So 0:02:18.400 --> 0:02:21.200 that's kind of what you're trying to go after Yeah, 0:02:21.240 --> 0:02:25.160 the competition is between the crypto community on the banks. Right, 0:02:25.200 --> 0:02:27.440 all of us give our money for free to the banks. 0:02:27.440 --> 0:02:29.919 The bank's turnaround landed on the credit card to our 0:02:29.919 --> 0:02:34.519 neighbor charge them. They keep all that profit to themselves. Well, 0:02:34.560 --> 0:02:36.760 what if you and me as depositors could get all 0:02:36.760 --> 0:02:39.280 that profits Assaulsius does the same thing the banks do, 0:02:39.919 --> 0:02:41.960 but it takes eighty percent of the profit that gives 0:02:41.960 --> 0:02:44.640 it to the depositors instead of the banks taking eighty 0:02:44.680 --> 0:02:47.200 percent of the profit and giving it to their shareholders. 0:02:47.760 --> 0:02:50.480 So it's a very simple concept for people to understand. 0:02:51.000 --> 0:02:53.000 And you can afford to do that because you don't 0:02:53.080 --> 0:02:56.120 have a skyscraper in uh in the financial district in 0:02:56.160 --> 0:02:59.519 New York, or in the fancy apartment in Manhattan. Yes, 0:02:59.600 --> 0:03:03.560 but I can afford that because it's the right thing 0:03:03.600 --> 0:03:06.360 to do. I think you very rarely in life you 0:03:06.400 --> 0:03:08.760 can do good and do well at the same time. 0:03:08.840 --> 0:03:10.720 I managed to do it several times. If you look 0:03:10.760 --> 0:03:15.240 at my history, Celsius, my eighth company, the company before that, 0:03:15.280 --> 0:03:17.440 I put wireless in the subways in the Ark After 0:03:17.480 --> 0:03:19.720 a hundred year there was no years that there was 0:03:19.760 --> 0:03:23.400 no connectivity or communications in the subways. Right, So that 0:03:23.520 --> 0:03:26.120 was fighting with the city and so on, and now 0:03:26.160 --> 0:03:28.760 eight million people use the service for free. I did 0:03:28.840 --> 0:03:31.360 Voice of IRP before that. Four billion people use that. 0:03:31.520 --> 0:03:33.600 I know most people won't believe it. Just go on 0:03:33.720 --> 0:03:36.960 Wikipedia and put my name in there. So so this 0:03:37.040 --> 0:03:40.120 is again the same thing I've done my entire life, right, 0:03:40.240 --> 0:03:45.160 create opportunity for other people, Uh, give them something they 0:03:45.240 --> 0:03:49.440 thought that they didn't deserve. And here I am part 0:03:49.440 --> 0:03:51.920 of the one percent, but I found a way for 0:03:51.960 --> 0:03:57.200 everybody for the basically take advantage of all these magical 0:03:57.280 --> 0:04:00.640 things that the one percent does only for themselves and 0:04:00.640 --> 0:04:04.120 what we do without getting sidetracked, but maybe just a 0:04:04.120 --> 0:04:06.920 little bit um, you know, so you know, someone like yourself, 0:04:06.960 --> 0:04:08.560 like you're talking about you kind of have this track 0:04:08.640 --> 0:04:11.880 record of creating things to help other people, right, free, 0:04:11.920 --> 0:04:15.560 free connectivity, right for phones or whatever. Uh, finding a 0:04:15.600 --> 0:04:19.040 way to give back profits um and and so, like 0:04:19.080 --> 0:04:20.919 you said, you are part of the one percent. But 0:04:21.320 --> 0:04:23.720 isn't it almost something like like I've always believed that 0:04:23.760 --> 0:04:26.040 if you help other people get what they want, then 0:04:26.040 --> 0:04:29.400 you get what you want. My parents I was born 0:04:29.720 --> 0:04:32.360 in Russia and the US, and my parents taught me 0:04:32.440 --> 0:04:36.279 from the first day that giving is receiving, right, and 0:04:36.279 --> 0:04:38.640 and uh so I'm a giver, right. I was just 0:04:38.680 --> 0:04:41.720 born that way. I was brought up that way. And 0:04:41.760 --> 0:04:44.799 the more give, the more happy I am. I find 0:04:44.839 --> 0:04:47.600 happiness in that. I don't find any happiness in hoarding 0:04:48.200 --> 0:04:50.839 and dying with the most dollars in the bank account. 0:04:50.839 --> 0:04:53.000 I mean, that just doesn't do anything for me. So 0:04:53.200 --> 0:04:55.640 I did I do well only because all these other 0:04:55.680 --> 0:04:58.200 people are doing well. And Celsius now is over four 0:04:58.240 --> 0:05:02.679 hundred million dollars in deposits. We earned again six seven 0:05:02.720 --> 0:05:06.120 eight percent on that. If you keep that enough to 0:05:06.160 --> 0:05:08.120 pay all the bills for the company, it's enough to 0:05:08.160 --> 0:05:13.320 pay my bills. Everybody's happy, Yeah, So let's talk about that. So, UM, 0:05:13.320 --> 0:05:16.480 it's been about two years since you launched UM kind 0:05:16.480 --> 0:05:19.040 of launched kind of like right in the crypto boom 0:05:19.040 --> 0:05:22.600 with seventeen or whatever. UM. But even through the downturn 0:05:22.720 --> 0:05:24.840 the bear market, you've continued to grow at a pretty 0:05:24.920 --> 0:05:27.760 rapid pace. What's the growth been like over the last years? 0:05:27.760 --> 0:05:30.760 Wearing the huddle shirt and it was very unpopular. People 0:05:30.839 --> 0:05:33.720 kept coming to me at conferences and saying, isn't it 0:05:33.839 --> 0:05:36.359 time to get rid of this huddle shirt because a 0:05:36.360 --> 0:05:38.920 bit that went down from I think sixteen thousand down 0:05:39.000 --> 0:05:43.480 to thirty It was a very unpopular shirt. Now people 0:05:43.480 --> 0:05:46.280 are saying, where can I get this shirt? Alex, come on, 0:05:46.920 --> 0:05:51.080 give me the shirt. So look ups and downs. The 0:05:51.120 --> 0:05:54.000 Hoddlers stay Hoddlers, right. The people who were sold out, 0:05:54.640 --> 0:05:56.960 as we know, always sell out at the long time 0:05:57.040 --> 0:06:00.320 because of when our emotions come to play unfortu only, 0:06:01.440 --> 0:06:05.720 that's exactly what the traders are prey on. They prey 0:06:05.760 --> 0:06:09.719 on fear, they prey on despair, they prey on you 0:06:09.880 --> 0:06:13.840 losing your uh faith. And I mean, if you're a 0:06:13.920 --> 0:06:16.680 hoddler and you're earning that six or seven percent on 0:06:16.760 --> 0:06:20.040 top of it, that just gives you more comfort to 0:06:20.279 --> 0:06:23.240 that gives you that extra few months that sometimes you 0:06:23.320 --> 0:06:27.240 need to weather the storm. I'm curious from someone like 0:06:27.279 --> 0:06:30.040 you who's kind of been in the technology niche right 0:06:30.080 --> 0:06:33.680 with void Um, and you've been an early adopter, right, 0:06:33.720 --> 0:06:36.400 so you've been building it before it was popular, so 0:06:36.440 --> 0:06:38.800 you've kind of seen this play out before. And so 0:06:38.880 --> 0:06:40.800 we went through this bear market where a lot of 0:06:40.800 --> 0:06:43.440 people folded up shop or kind of just just just 0:06:43.640 --> 0:06:46.920 held back. But you pushed forward and built more. Right, 0:06:46.960 --> 0:06:49.640 I mean do you think, um? I mean, is that 0:06:49.680 --> 0:06:51.200 because you just believe in the industry and now it's 0:06:51.240 --> 0:06:53.040 kind of starting to pay off or you're still building 0:06:53.080 --> 0:06:56.800 waiting for it to come. Look, the early days of 0:06:56.880 --> 0:06:58.800 Voice of Our p were just as hard. When we 0:06:58.839 --> 0:07:02.240 went out and to convince people that they can stop 0:07:02.320 --> 0:07:05.040 using their phone company and they can switch to this 0:07:05.080 --> 0:07:07.080 little company that no one knew back then it was 0:07:07.120 --> 0:07:10.240 called Urbanet and and people laugh at us, They're like, 0:07:10.280 --> 0:07:12.480 I'm never gonna trust you. Who are you? You know, 0:07:12.520 --> 0:07:16.000 like you're nobody and using this weird technology that nobody 0:07:16.000 --> 0:07:18.680 else has, you know, like I we can't trust you 0:07:18.760 --> 0:07:22.440 for anything. Uh So it wasn't easy, right, But that 0:07:23.280 --> 0:07:26.440 convincing people to switch from one phone company to another 0:07:26.880 --> 0:07:30.840 is definitely not as hard as convincing people to deposit money. 0:07:30.960 --> 0:07:34.600 Stop depositing money with City or JP Morgan and giving 0:07:34.640 --> 0:07:37.080 it to you. So I think the bar is much higher, 0:07:37.080 --> 0:07:39.680 and that's why we have that slower adoption. Right. If 0:07:39.720 --> 0:07:42.280 you look at the speed at which the Internet scale, 0:07:42.800 --> 0:07:45.640 we are scaling at one tenth that speed, and part 0:07:45.640 --> 0:07:47.920 of what I dedicating the rest of my life there 0:07:48.000 --> 0:07:51.000 is really make sure that seven billion people have access 0:07:51.000 --> 0:07:53.240 to this because the banks are not going to change 0:07:53.240 --> 0:07:55.640 their way. The politicians are going to change their way. 0:07:55.880 --> 0:07:59.640 The fat just injected two hundred and eighty billion dollars 0:07:59.640 --> 0:08:02.360 and two weeks, right, they creative poof too. I'm an 0:08:02.360 --> 0:08:04.920 eight billion no one that paid any attention to it. 0:08:05.000 --> 0:08:08.960 So when people are gonna realize that all of that 0:08:09.200 --> 0:08:12.560 is hidden inflation that just eats away your money, right, 0:08:12.960 --> 0:08:15.440 We're gonna realize when it's too late. Yeah, if a 0:08:15.520 --> 0:08:17.960 catapult was eating your house, you would go to the 0:08:18.040 --> 0:08:20.840 exterminator and take care of it right away. Well, guess what, 0:08:21.240 --> 0:08:23.760 this caterpillar is eating a dollar and you're not doing 0:08:23.760 --> 0:08:28.240 anything about it. So I think again, bitcoin is the 0:08:28.280 --> 0:08:32.840 best doomsday insurance out there. It's the cheapest doomsday insurance 0:08:32.840 --> 0:08:35.560 out there. And anyone who does not have one to 0:08:35.800 --> 0:08:39.559 five of their money in it doesn't understand what's happening 0:08:39.559 --> 0:08:42.520 every day. Yeah, I'm curious. So, like I said, you know, 0:08:42.559 --> 0:08:44.240 you started in the in the peak of the of 0:08:44.320 --> 0:08:47.240 the boom, and then you built all to the bear market. 0:08:47.559 --> 0:08:50.680 But I've seen other people in the industry, coin Base 0:08:50.800 --> 0:08:55.160 and others like reporting good numbers, like good signaps um good. 0:08:55.360 --> 0:08:57.280 You know, we see a bunch of new wallets coming online, 0:08:57.280 --> 0:09:00.439 hash power super strong. But your business has continue to 0:09:00.480 --> 0:09:02.480 grow as well, right, so, like, can you tell us 0:09:02.480 --> 0:09:04.400 a little bit like what the growth curve may have 0:09:04.480 --> 0:09:06.640 been like over the last you know, eighteen months. Has 0:09:06.679 --> 0:09:08.319 it been kind of steady up or do you take 0:09:08.320 --> 0:09:10.480 a dip? Is are we on a big up trend 0:09:10.600 --> 0:09:14.160 right now? So people are excited about coin based Binance. 0:09:14.280 --> 0:09:16.800 Those are trading businesses right to go up and down 0:09:17.080 --> 0:09:21.559 in volume based on the hype of the trading. We 0:09:21.760 --> 0:09:25.680 consistently make six seven eight percent on our a U M. 0:09:25.679 --> 0:09:28.680 And we from day one we had the same growth. 0:09:28.720 --> 0:09:30.760 We did not have slowed down. We did. We were 0:09:30.800 --> 0:09:32.560 trying to speed it up. We can't do that either. 0:09:32.920 --> 0:09:36.120 It's between a hundred and fifty and two hundred people 0:09:36.160 --> 0:09:39.040 every day, and we got between two and three million 0:09:39.080 --> 0:09:41.480 dollars in deposits every day. And now sometimes I can 0:09:41.480 --> 0:09:45.640 tell you when Binance announced the lottery interest income and 0:09:45.640 --> 0:09:47.679 everybody went to their site and found out that I 0:09:47.720 --> 0:09:50.520 can't actually learn anything. We got fourteen million dollars that 0:09:50.640 --> 0:09:52.679 day and the next day we got like nine million dollars. 0:09:52.720 --> 0:09:56.280 So we We definitely had a rampop because other people 0:09:56.400 --> 0:09:59.000 were trying to copy us, but they didn't deliver, right. 0:09:59.040 --> 0:10:02.400 So but insistently we do two the three million. Our 0:10:02.440 --> 0:10:06.040 average depositors twenty dollars. The average coin Base deposited about 0:10:06.080 --> 0:10:08.360 a thousand dollars. So we have the cream of the 0:10:08.400 --> 0:10:11.400 crop of the crypto community. We have the Hoddler community, 0:10:11.559 --> 0:10:15.199 the coin Base, the Bindance have the trader community, right 0:10:15.280 --> 0:10:18.680 the speculator community. So these are different communities that have 0:10:18.760 --> 0:10:22.880 different behavior and we serve different purposes. Right. Our job 0:10:23.480 --> 0:10:28.640 is to protect to create yield. We always represent the depositor. 0:10:28.720 --> 0:10:30.760 We don't represent the hatch fund. We don't We're not 0:10:30.800 --> 0:10:34.400 a neutral player. I can assure you that coin Base 0:10:34.480 --> 0:10:36.200 cannot look at you in the face and tell you 0:10:36.240 --> 0:10:39.440 I'm always acting in your best interests or binance or 0:10:39.440 --> 0:10:43.600 anybody else. Right, So, I I heard something about a 0:10:43.640 --> 0:10:47.720 new milestone that was passed where you guys have reached 0:10:48.160 --> 0:10:50.720 a record of of assets under management a u M. Right, 0:10:50.800 --> 0:10:54.000 like something about four million or so. Yeah, we just 0:10:54.080 --> 0:10:57.840 crossed the four hundred million. Again, that's a few into 0:10:57.880 --> 0:11:01.480 some pretty rare air up in the up. I think, uh, 0:11:01.679 --> 0:11:03.400 probably one of the problem at least one of the 0:11:03.400 --> 0:11:05.760 biggest funds in all of crypto, I would imagine at 0:11:05.760 --> 0:11:10.200 this point, I think officially puts US as number two, 0:11:10.360 --> 0:11:12.560 right behind the Great Scale. So there were a few 0:11:12.600 --> 0:11:16.760 other people up there, and it looks like we're sucking 0:11:16.760 --> 0:11:19.800 assets up from everybody. Right. So again, if if you're 0:11:19.840 --> 0:11:23.920 not paying your customers uh for depositing assets with you, 0:11:24.000 --> 0:11:25.840 and we are, why would they keep the oussets with you? 0:11:26.240 --> 0:11:28.719 Why wouldn't they swim over? Right? So, so I think 0:11:28.760 --> 0:11:31.320 we've proven over two years that were consistent, we pay 0:11:31.720 --> 0:11:34.000 we you know. The funniest the best thing is that 0:11:34.040 --> 0:11:36.640 we took the worst day of the week, which is Monday, 0:11:37.040 --> 0:11:38.520 and we made it the best day of the week 0:11:38.559 --> 0:11:41.120 because we pay interest. Monday morning, most of our customers 0:11:41.160 --> 0:11:45.800 wake up and there's interest in their uh inbox, you know, 0:11:45.960 --> 0:11:49.360 just waiting for them and a smile and the fifty 0:11:49.800 --> 0:11:53.800 people faces every every Monday morning. Yeah, that's great. So 0:11:53.880 --> 0:11:57.400 that that's a great milestone. Congratulations on that. So you know, 0:11:57.480 --> 0:12:01.720 the business model of paying out know whatever, four or five, six, seven, 0:12:02.120 --> 0:12:07.920 sometimes nine interests is amazing. Um almost two good to 0:12:07.920 --> 0:12:12.800 be true? Right? Uh. You know, I've talked about earning 0:12:12.840 --> 0:12:15.960 interests on stable coins and and other cryptocurrencies, bitcoin and stuff. 0:12:16.000 --> 0:12:18.040 And so I've I've got a lot of feedback from 0:12:18.120 --> 0:12:20.520 from users. A lot of people just say, oh, Alex 0:12:20.520 --> 0:12:22.320 seems like such a great guy. I just trust him 0:12:22.360 --> 0:12:26.600 because I see him talking all the time. But but realistically, um, 0:12:26.720 --> 0:12:29.720 nothing is risk free in life, right, Doing nothing is 0:12:29.720 --> 0:12:31.640 not risk free? Right, as you already said, the worms 0:12:31.640 --> 0:12:33.320 eating the house. If I leave my money in the bank, 0:12:33.360 --> 0:12:35.840 I know I'm losing money there. Um, So we know 0:12:35.880 --> 0:12:39.280 there's risk, but um, I know some of it is 0:12:39.320 --> 0:12:42.280 counterparty risk. And so you're taking that money loaning it 0:12:42.360 --> 0:12:45.520 out to earn income. Uh. Some of the things I've 0:12:45.559 --> 0:12:48.520 heard would be that, like you loaned the bit fin x, 0:12:48.559 --> 0:12:50.240 and bit fin x is potentially going to be in 0:12:50.280 --> 0:12:52.840 trouble with the n Y, you know, a g over 0:12:53.040 --> 0:12:56.040 tether and whatnot. What can you say about something like that. 0:12:57.360 --> 0:13:02.160 So we we loaned to about Institute France, we loan 0:13:02.240 --> 0:13:05.680 to bit fin x, We loan to many others, and 0:13:05.760 --> 0:13:07.720 for each one of them we have a risk profile. 0:13:07.800 --> 0:13:10.640 So we don't lend anybody unless we on board. Then 0:13:10.679 --> 0:13:12.760 we do full ky CML. We get to see their 0:13:12.760 --> 0:13:15.680 balance sheet, and we get to understand what the risk 0:13:15.800 --> 0:13:18.480 is because we represent the community right if if if 0:13:18.480 --> 0:13:20.800 we make a mistake, we have to pay for it 0:13:20.840 --> 0:13:24.320 from our treasury and make the community good. Right. So 0:13:24.320 --> 0:13:27.480 so we have a counterparty risk. In this case, the 0:13:27.559 --> 0:13:29.760 counterparty would be bit fin x, or it would be 0:13:29.800 --> 0:13:34.240 a trading firm mostly hedge funds or other major Wall 0:13:34.280 --> 0:13:37.600 Street firms that trade in bitcoin, and specifically to bit 0:13:37.679 --> 0:13:42.800 fin x. We have seen assurances from them in the 0:13:42.880 --> 0:13:47.400 form of audited financials, in the form of their uh 0:13:47.640 --> 0:13:50.959 deposit on hand, in the form of their insurance. That 0:13:51.480 --> 0:13:54.200 makes us feel that we can trust them with some 0:13:54.320 --> 0:13:56.880 of our assets. Now we also bore from them, so 0:13:56.920 --> 0:13:59.520 at anytime we try to balance that risk, meaning the 0:13:59.559 --> 0:14:02.120 amount and we give them. We may give them ripple, 0:14:02.240 --> 0:14:04.920 or we may give them a life coin. Most people 0:14:04.920 --> 0:14:08.480 think we give them bitcoin, but bitfin x pay is 0:14:08.600 --> 0:14:11.960 less than one percent a year on bitcoin, so obviously 0:14:12.240 --> 0:14:14.400 we're paying four and a half percent, so you can't 0:14:14.440 --> 0:14:16.080 make four and a half percent if you land at 0:14:16.080 --> 0:14:20.320 one percent. We don't land bitfinex any bitcoin, but the 0:14:20.360 --> 0:14:22.920 coins that they do want where we can earn a 0:14:23.080 --> 0:14:26.120 nice heel. We then borrow other things with them, we 0:14:26.160 --> 0:14:29.160 borrow other assets that offset the risk, meaning if they 0:14:29.200 --> 0:14:31.760 default for any reason, we hold enough assets where we 0:14:31.800 --> 0:14:34.400 have zero risk or zero exposure. And we do that 0:14:34.480 --> 0:14:37.320 with everybody like we, you know, even like we we 0:14:37.440 --> 0:14:40.440 land and bore from Galaxy Digital for example, and at 0:14:40.480 --> 0:14:45.480 any time we have a net zero exposure in most 0:14:45.520 --> 0:14:50.120 cases with them and with other major institutions. Galaxy Digital 0:14:50.160 --> 0:14:52.960 is a public company. You can see their assets, so 0:14:53.040 --> 0:14:55.680 it's very easy for you to know, for you, meaning 0:14:55.760 --> 0:14:59.040 for Celsius, to know what's our risk exposure and manage 0:14:59.040 --> 0:15:04.040 that properly. So um, your bank, any bank did you 0:15:04.120 --> 0:15:07.560 deposit dollar was, does the same thing. If you happen 0:15:07.680 --> 0:15:10.960 to uh the bank. For example, with Deutsche Bank, they'll 0:15:11.000 --> 0:15:14.560 leverage fifty two one, meaning they took for every dollar 0:15:14.720 --> 0:15:18.040 that you gave them a deposit, they lent out fifty 0:15:18.080 --> 0:15:21.560 dollars out there, and so they have tremendous We We 0:15:21.600 --> 0:15:24.520 never have more than one to one leverage, So we 0:15:24.640 --> 0:15:27.480 are under leverage compared to any bank or any major 0:15:27.520 --> 0:15:30.520 financial institution in the United States. So it would be 0:15:30.520 --> 0:15:33.760 hard for me to say we're less risky because we're 0:15:33.800 --> 0:15:35.680 not a D A C insured and we're not all 0:15:35.720 --> 0:15:40.560 these other things, but we're definitely less much less leverage 0:15:40.680 --> 0:15:43.360 than most of these guys you're talking about most of 0:15:43.400 --> 0:15:47.880 the other financial institutions that people think are safe havens. 0:15:47.920 --> 0:15:50.680 So really, then, I mean, whether it's bit fin X 0:15:50.800 --> 0:15:53.400 or any other number of people, I mean, it's always 0:15:53.480 --> 0:15:56.480 counterparty risk. So if I loan money to you, I 0:15:56.520 --> 0:15:57.960 know you and I've talked to you. But when I 0:15:58.040 --> 0:15:59.720 lean money to you and you leaned to somebody else, 0:15:59.720 --> 0:16:02.800 then I lose that relationship. UM. And so whether it's 0:16:02.840 --> 0:16:05.360 fifin X or whoever, there's counterparty risk. And basically what 0:16:05.400 --> 0:16:09.560 you're saying is that UM, you guys manage that, UM, 0:16:09.760 --> 0:16:14.160 spread the risk around by institutions, and then offset the 0:16:14.240 --> 0:16:17.640 risk with borrowing and lending. I guess that's that's the answer, right, 0:16:17.640 --> 0:16:21.320 So we we we manage on behalf of fifty depositors. So, 0:16:22.400 --> 0:16:25.680 like like I said to you before we started recording, right, anyone, 0:16:25.920 --> 0:16:28.760 any person can go open account of bit fin X 0:16:28.800 --> 0:16:32.600 and lend them XRP directly and earned twenty more than 0:16:32.640 --> 0:16:35.600 what we pay you. Out Right, you can bypass us 0:16:35.640 --> 0:16:38.680 go directly to any of these institutions, but you will 0:16:38.760 --> 0:16:41.080 have to create a hundred a D the relationship, you're 0:16:41.080 --> 0:16:43.360 gonna have to do p CML and all of them. 0:16:43.680 --> 0:16:45.960 You're gonna have to manage the accounter party risk and 0:16:46.000 --> 0:16:49.520 everything else. So if you think about us just charging 0:16:50.440 --> 0:16:54.520 for that, I think that is definitely a reasonable uh 0:16:54.720 --> 0:16:57.720 kind of it's a fair deal for both sides, right, 0:16:58.080 --> 0:17:01.120 that's what we're trying to say. What about what about 0:17:01.160 --> 0:17:05.159 regulatory risk? So that would be something also, right, So 0:17:05.240 --> 0:17:08.800 let's say that, um, the regulators, whoever they may be 0:17:09.000 --> 0:17:11.480 right there, they're very unclear on what's going on. So 0:17:11.920 --> 0:17:14.359 they want to come in and freeze your accounts because 0:17:14.400 --> 0:17:17.080 of the cell token, or because you did business with tether, 0:17:17.320 --> 0:17:19.719 or because any number of reasons. So what kind of 0:17:19.880 --> 0:17:23.760 what do you think about that risk? Full disclosure? We 0:17:23.840 --> 0:17:27.919 are filed reg D with SEC where fins and registered. 0:17:28.800 --> 0:17:32.679 If you check all the other people that do this 0:17:32.800 --> 0:17:35.040 kind of stuff in the business or based in the 0:17:35.080 --> 0:17:39.480 Seychelle Islands, or based in in Malta or based in 0:17:39.520 --> 0:17:42.320 the b v I or whatever, you would see that 0:17:42.440 --> 0:17:45.560 none of them have any SEC filings of FINS and filing. 0:17:45.680 --> 0:17:50.680 So we actually work with regulators. We work with enforcement 0:17:50.720 --> 0:17:53.520 agencies when they need to find certain assets and they're 0:17:53.520 --> 0:17:57.600 trying to track different accounts. If somebody comes to us 0:17:57.640 --> 0:18:01.320 and asked us that I'm talking about regulators or enforcement agencies, 0:18:01.880 --> 0:18:04.479 we are there to co operate with them, right, So 0:18:04.520 --> 0:18:07.880 we are a good citizen in the financial system. Uh. 0:18:07.920 --> 0:18:12.159 And unlike most of the projects in the crypto space 0:18:12.240 --> 0:18:15.800 which did like you've seen Neils recently paid twenty four million, 0:18:15.800 --> 0:18:18.639 they'll fine. The reason they paid a fine is because 0:18:18.640 --> 0:18:21.000 they didn't do what Celsius did. They did not file 0:18:21.040 --> 0:18:23.720 a reg D when they did their race. If they did, 0:18:23.840 --> 0:18:25.880 they wouldn't be paying a twenty four million all find 0:18:26.000 --> 0:18:29.320 So we are the example. We have the highest standard 0:18:29.840 --> 0:18:33.960 in our industry today. Celsius is probably the only company, 0:18:34.000 --> 0:18:35.800 the only i c oh in the United States that 0:18:35.880 --> 0:18:39.359 did not receive an sec S a letter or an 0:18:39.400 --> 0:18:45.760 action letter or any kind of action. Look, look we 0:18:45.760 --> 0:18:49.080 we again. We we have a compliance department. We did 0:18:49.160 --> 0:18:52.080 KYC from day one. We didn't do KYC after we 0:18:52.119 --> 0:18:54.919 had ten million customers and we decide, oh my gosh, 0:18:55.119 --> 0:18:57.560 we forgot to do k y C. Let's do And 0:18:57.600 --> 0:18:59.639 that's part of what slows our growth. I mean, we 0:18:59.720 --> 0:19:03.360 have we have a hundred and twenty thousand downloads and 0:19:03.400 --> 0:19:05.760 we only had forty five thou people that pass y. 0:19:06.320 --> 0:19:09.000 So we pay for it in the form of not 0:19:09.119 --> 0:19:11.679 admitting tens of thousands of people. We either don't know 0:19:11.720 --> 0:19:14.119 how to do it or they'll get scared when we 0:19:14.160 --> 0:19:17.120 ask them for the social security or for their driving license. 0:19:17.560 --> 0:19:20.280 So it's not easy for us. It's not like, oh, look, 0:19:20.359 --> 0:19:23.040 can't I see it's so easy? Right, we lose half 0:19:23.080 --> 0:19:27.520 of our customers because of that. But compliance and protecting 0:19:27.520 --> 0:19:30.920 our community right, making sure we don't admit any bad apples, 0:19:31.359 --> 0:19:35.320 because that's again, I represent the community. If I screw 0:19:35.400 --> 0:19:39.680 up for the community, I will lose uh everybody, right, 0:19:39.720 --> 0:19:43.680 So our job and that's why we're only promising midsin 0:19:43.880 --> 0:19:47.320 single digits. We're not trying to get right. So we're 0:19:47.359 --> 0:19:51.520 trying to balance the risk with providing great security blanket 0:19:51.600 --> 0:19:54.919 for the entire critical community that that uses us. So 0:19:54.960 --> 0:19:57.800 if I'm a potential user and I'm looking at this 0:19:57.960 --> 0:19:59.959 and saying, shoot, I'd like to make some percent rich 0:20:00.000 --> 0:20:04.200 earning my crypto or stable coin um and I want 0:20:04.240 --> 0:20:06.520 to do my due diligence or whatever, what, what would 0:20:06.560 --> 0:20:09.159 you say is the number one risk that I should 0:20:09.160 --> 0:20:13.880 be watching out for so look, you you you don't 0:20:13.920 --> 0:20:16.440 have to trust us at all. You can verify all 0:20:16.480 --> 0:20:18.919 of our assets, you can verify the loans with issue. 0:20:18.960 --> 0:20:22.359 You can verify are we giving back or not. There's 0:20:22.480 --> 0:20:26.240 many many different online forms that do that every day. 0:20:26.280 --> 0:20:30.000 If you go to the Celsius network telegram channel that 0:20:30.160 --> 0:20:33.520 is managed by the community. If you go to Celsian's 0:20:33.600 --> 0:20:37.240 that network that colm sorry, that is a website that 0:20:37.320 --> 0:20:40.760 is managed by the community that has basically reports as 0:20:40.760 --> 0:20:44.919 a separate, independent party on what Celsius does. We report 0:20:44.960 --> 0:20:47.040 as well. You can go to our website and see 0:20:47.040 --> 0:20:49.000 all of our wallets and what do we have there. 0:20:49.320 --> 0:20:51.040 But you you will see a lot of stats that 0:20:51.040 --> 0:20:54.280 are not available on our side in those other communities 0:20:54.320 --> 0:20:56.680 where people got this either because they tweeted something or 0:20:56.720 --> 0:20:59.160 they got it because they did deep research on all 0:20:59.160 --> 0:21:01.239 the wallets and they so where the coins went and 0:21:01.240 --> 0:21:04.359 so on, and you know, they asked very hard questions. 0:21:04.440 --> 0:21:08.520 You can see them asking us, Pope, poking us and saying, well, 0:21:08.640 --> 0:21:11.320 this number is not exactly what you said, because it's 0:21:11.320 --> 0:21:14.520 not exactly eight percent, right. Sometimes it's seventy nine point 0:21:14.560 --> 0:21:17.680 six and sometimes it's eighty two point two, right, the 0:21:17.760 --> 0:21:20.560