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Speaker 1: Brett Harrison joining us here, the founder of Architect Financial

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Speaker 1: Technologies for president of FTX US.

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Speaker 2: Nice to see you, Brett.

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Speaker 1: You're in Toronto because there's this big collision technology conference.

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Speaker 1: This fidelity news is Matt mentioned following the news from

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Speaker 1: black Rock, are everybody's looking to get into the ETF freshness?

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Speaker 3: To surprise you, not at all. The SEC has this

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Speaker 3: way of applying for an ETF. ETFs are a way

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Speaker 3: for people to get exposure to a variety of different products,

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Speaker 3: whether those are international equities, commodities, currencies, through this regulated

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Speaker 3: vehicle in a way that's much cheaper and easier than

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Speaker 3: holding underlying So it's natural for people to want to

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Speaker 3: bring exposure to retail institutional masses through the ETF process. Now,

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Speaker 3: of course this is a good opportunity following black Rock

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Speaker 3: applying for their ETF to try to throw the hat

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Speaker 3: in the ring as well and figure out they can

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Speaker 3: get over the hurdle at the SEC has place for them.

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Speaker 3: Since the first wave of rejections have happened in the

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Speaker 3: past couple of years, and.

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Speaker 1: How much does you know the situation with FTX itself

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Speaker 1: play a role in the fact that it has felt

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Speaker 1: like a bit of a roller coaster, right, a crypto crackdown,

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Speaker 1: and now within the last few weeks all of these

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Speaker 1: ETF applications, which sort of builds this story once again

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Speaker 1: of momentum.

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Speaker 3: So I mean ETFs were getting rejected you first stop

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Speaker 3: bik ATF prior to the STS collapse. Of course, post

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Speaker 3: collapse have caused a tremendous amount of damage of credibility

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Speaker 3: for the crypto industry in Washington and just you know,

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Speaker 3: across the financial service sector in general. I think now

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Speaker 3: people are starting to emerge again, not just because you

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Speaker 3: know the price of bitcoin is going up, because people

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Speaker 3: are seeing, if we're going to create regulated vehicles, regulated exchanges,

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Speaker 3: properly surveilled places for people to be able to trade

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Speaker 3: this asset, we should start doing this again. And so

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Speaker 3: that's why you see all these traditional players like Fidelity,

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Speaker 3: black Rock throw their hat in the ring for this.

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Speaker 2: I want to get to your young firm, architect Financials Bread,

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Speaker 2: which is fascinating because well for many reasons, but also

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Speaker 2: because of your use of AI. But before we get there,

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Speaker 2: to wrap up the idea of a spot bitcoin ETF,

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Speaker 2: I spoke with a former SEC lawyer a couple of

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Speaker 2: weeks ago who said, in his mind, one of the

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Speaker 2: biggest problems is volatility and settlement. Do you think that

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Speaker 2: that's an easy one to solve, especially for you know,

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Speaker 2: gigantic firms like the ten trillion dollar black Rock.

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Speaker 3: I do think they can solve that problem. And remember,

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Speaker 3: think about all of the other ETFs etns that are

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Speaker 3: out there right now. I mean, you have the double

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Speaker 3: long leveraged vix ETN, you have uh ETFs on, for example,

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Speaker 3: corporate bonds that are extremely illiquid. You have ETFs on

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Speaker 3: foreign stocks, and so having you know the bitcoin market,

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Speaker 3: which is you know, a trillion dollar you know, total

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Speaker 3: market for all of crypto, I think that these companies

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Speaker 3: can figure out how to do proper settlement, that they

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Speaker 3: can do surveillance of the exchanges in a way that

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Speaker 3: will satisfy regulators in a way that will ultimately protect

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Speaker 3: the investors who will get this much better way of

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Speaker 3: getting exposures for the underlying products.

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Speaker 2: All right, with that behind us, because I thought it

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Speaker 2: was a very cool story to drop this hour, and

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Speaker 2: you have a background on ETFs and cryptos, so it

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Speaker 2: was a perfect timing. Let's get to Architect, which is

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Speaker 2: the firm that you recently founded, and even before this

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Speaker 2: wave of AI fascination, you already had planned on using

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Speaker 2: AI to help institutions trade crypto explain to us how

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Speaker 2: it works.

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Speaker 3: So the intersection of AI and financial services is a

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Speaker 3: very exciting area when you think about what something like

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Speaker 3: GPT is very good at. It's great at taking natural

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Speaker 3: language instructions and parsing those and creating sort of an

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Speaker 3: interactive dialogue with the user to help them solve a task.

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Speaker 3: So it could be you know, yes, finding restaurant recommendations,

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Speaker 3: or it could be coding up with projects well in

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Speaker 3: the financial services sector, especially for what we're building with Architect,

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Speaker 3: which is trading software. We are trying to help people

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Speaker 3: be able to create automated trading systems, to create trading

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Speaker 3: strategies in a way that's a lot easier than needing

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Speaker 3: to know how to, for example, code completely from scratch

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Speaker 3: or have years of experience within some secret of proprietary

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Speaker 3: trading firm. Says. What we're working on at Architect is

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Speaker 3: being able to use AI and all of the connections

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Speaker 3: that we're building to various exchanges, not just for digital assets,

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Speaker 3: but for regular deservatives as well to let people make

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Speaker 3: these strategies easily using AI.

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Speaker 1: You know, it's interesting we were reference to you were

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Speaker 1: just at this large tech conference here in Toronto, Collision

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Speaker 1: where it's AI all the time. Everybody's been working in

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Speaker 1: their own silos in a year where this has become

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Speaker 1: such a story of excitement. To see all that energy

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Speaker 1: at one place, did it almost make you feel validated

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Speaker 1: in what you've been doing.

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Speaker 2: Yes.

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Speaker 3: And on the other hand, I think one thing that's

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Speaker 3: important for us is that we're taking the long view

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Speaker 3: on what we're building. We're not just going to follow

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Speaker 3: the hype cycle. And you know, we're not pivoting to

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Speaker 3: become an AI company here. We are a financial services company.

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Speaker 3: We're a financial technology company. We believe in the long

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Speaker 3: term prospects or digital assets. Of course, we believe in

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Speaker 3: all emerging technologies helping investors in the long run, whether

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Speaker 3: that's blockchain or AI. And we want to use our

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Speaker 3: skills in the areas of programming and in finance and

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Speaker 3: market structure to be able to help investors.

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Speaker 2: Is it bread a software as a service play? I mean,

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Speaker 2: you're not doing any kind of actual crypto trading. You

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Speaker 2: don't have a platform that custodies any assets, right, You're

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Speaker 2: just looking to help institutions that want to be able

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Speaker 2: to play in this market.

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Speaker 3: Right now, we are a pure software company, and so

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Speaker 3: our product we deliver a software bundle to the customer.

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Speaker 3: They install it on their own servers, on their own hardware,

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Speaker 3: to allow them to have much easier connectivity to exchanges,

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Speaker 3: to be able to manage their portfolios, to be able

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Speaker 3: to see their balances, to be able to create algos

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Speaker 3: for trading. And in the future we plan on possibly

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Speaker 3: getting into the broker services by applying for licenses in

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Speaker 3: the US and possibly other jurisdictions. But for now we

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Speaker 3: are a pure software market.

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Speaker 1: Okay, speaking of trading activity, you were just fueling some

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Speaker 1: of our question on that bitcoin ETF news from Fidelity.

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Speaker 1: The Bloomberg team was noting that the cryptocurrency is yet

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Speaker 1: to surpass its recent June high even with this news

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Speaker 1: out there. What would you say, what's been your observation

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Speaker 1: of bitcoin trading of late.

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Speaker 3: I think a lot of the recent price action has

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Speaker 3: to do with general optimism that institutional players are finally

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Speaker 3: now entering the space. They're looking at their recent turmoil

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Speaker 3: in the markets as an opportunity to come in as

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Speaker 3: established players and build these regulated environments for trading, and

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Speaker 3: I think we're going to see that continue. I also

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Speaker 3: think there's a trendus amount of optimism from other jurisdictions

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Speaker 3: like Hong Kong, Singapore, Japan, where they're rolling out rules

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Speaker 3: to make it easier and safer to be able to

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Speaker 3: trade this asset class. And I think over the long run,

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Speaker 3: you know, we will see the price track.

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Speaker 2: Is there any other overhang that you're watching to fall away? Brett?

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Speaker 2: I mean, this bitcoin etf really highlights I think the

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Speaker 2: institutional interest right and optimism. As John pointed out, you

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Speaker 2: know m live has been writing that it's already kind

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Speaker 2: of baked in there, which is why the price is

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Speaker 2: holding steady at thirty thousand. Is there anything else that

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Speaker 2: the crypto community is looking for to get another leg

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Speaker 2: up on the bitcoin price.

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Speaker 3: I think the community is looking to see volumes return,

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Speaker 3: especially in the US. I mean again posts the SEC crackdown,

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Speaker 3: for example, their complaint against coinbase. Generally speaking, the volumes

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Speaker 3: have really dropped in the US. A lot of large

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Speaker 3: proprietary trading firms market makers have pulled out of the

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Speaker 3: crypto markets and so with that depression of liquidity, I

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Speaker 3: think that's really holding back price. I think these different

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Speaker 3: new exchanges that are coming online. For example, edX is

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Speaker 3: just one of them, but for example, you know, Ceboat

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Speaker 3: Digital recently got margin approval for their futures exchange. There

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Speaker 3: are other exchanges that are trying to become you know,

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Speaker 3: regulated commodities bot commodities platforms for things like bitcoin and eather.

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Speaker 3: If those can really pick up and bring institutional liquidity back,

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Speaker 3: I think that will help a lot.

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Speaker 2: All right, Gret, great talking to you, Thanks very much

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Speaker 2: for joining us. Brett Harrison there from Architect Financials, coming

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Speaker 2: to us from Toronto where he's attending the Collision conference