Speaker 1: All right, let's get back to the cryptocurrency story really
Speaker 1: grabbing global headlines. It's Binances. It backed out of its
Speaker 1: takeover of FTX dot com Big Big Blue. For investors
Speaker 1: that were hoping that Binance would support ft x's customers
Speaker 1: to give them liquidity. Let's get over to Douglas both Week,
Speaker 1: chief business office at I n X Limited. Douglas so
Speaker 1: give us a sense of what happened here and whether
Speaker 1: we should be concerned about this being the canary in
Speaker 1: the coal mine. Well, I think that we all knew
Speaker 1: this was can happen um a couple of days ago
Speaker 1: when cz over A Binance tweeted that he was looking
Speaker 1: into f t X, didn't like what he saw and
Speaker 1: he was going to start selling aggressively their token. I
Speaker 1: think it was five million dollars of it, so it
Speaker 1: certainly telegraphed as he did that. Obviously there was a run.
Speaker 1: That run on the bank essentially meant that f t
Speaker 1: X I think it was six billion dollars of outflows
Speaker 1: and it seems that they couldn't cover it. Um. Then
Speaker 1: they signed a non binding l o I, and I
Speaker 1: think we all agree that a non by lloy means
Speaker 1: very very little today cz command said, you know what,
Speaker 1: we're not going to buy it after all, and you
Speaker 1: saw continued contagion in the market. So obviously bitcoins taking
Speaker 1: a bit of a hit, a lot of all coins
Speaker 1: are taking a hit. It's it's a bit of a mess.
Speaker 1: I think the media right now is concentrating on the
Speaker 1: people that invested in the equity rounds at f t
Speaker 1: X and how much they're going to get hurt. But
Speaker 1: you have to remember there's a lot of investors that
Speaker 1: have their money now locked in at f t X,
Speaker 1: and who knows when that money is gonna be allowed
Speaker 1: to come out again. I mean, there's a bit of
Speaker 1: stink on this isn't there from the way that c
Speaker 1: z JAW handled this and the way that it unveiled
Speaker 1: or rolled out. From a regulations standpoint, well, I think, well,
Speaker 1: on a regulatory stand standpoint, neither of these companies seemed
Speaker 1: regulated inside the United States. None of them are public companies,
Speaker 1: neither of them are audited in the United States and
Speaker 1: so and neither of them way I believe can have
Speaker 1: US investors invest in them, um and so that that's
Speaker 1: one point. But you know, I think that one of
Speaker 1: the big stinks that's coming out is that it seems
Speaker 1: that f t X was using their own token and
Speaker 1: perhaps buying that with customer funds that were deposited on
Speaker 1: the exchange, pumping up the price of it, and then
Speaker 1: using that pumped up price to then go out there
Speaker 1: and purchase other companies. UM. And that sort of thing
Speaker 1: I think people look at and think that's that doesn't work.
Speaker 1: That's very off, very odd. But do you know, asking
Speaker 1: you whether this was the current canary in the comn
Speaker 1: I was referring to f t X, do you think
Speaker 1: the many others like this out there and what does
Speaker 1: it tell you about the crypto space? But I certainly
Speaker 1: think that there's a lot of palaces that are built
Speaker 1: on sand, and I think that we need to remember
Speaker 1: that and a lot of guys that kind of rushed
Speaker 1: out to the Facebook model and break it then fix it. Um.
Speaker 1: They did that with a m l K y C.
Speaker 1: They've done it obviously with the way that they've not
Speaker 1: really had auditors in making sure that they do things
Speaker 1: that they say they're doing. UM. I think that a
Speaker 1: lot of folks are now looking at other these exchange
Speaker 1: tokens and how are they you Easton. How are they
Speaker 1: manipulated by other companies that have exchanged tokens. My company
Speaker 1: has an exchange token, but it's a registered security. It's
Speaker 1: the only fully registered security public security that exists for
Speaker 1: an exchange, and so we're audited. Um, We've got rules
Speaker 1: that we have to follow as a company, and none
Speaker 1: of these other companies seem to have these rules. It's
Speaker 1: very hard to know, you know, the the finances. Uh
Speaker 1: and um, you know, we don't know obviously, you know,
Speaker 1: you don't know when someone's cheating. But it's very worse.
Speaker 1: And because sam Banquan Freed and FTX had been almost
Speaker 1: a savior of sorts for a number of other exchanges
Speaker 1: and another other a number of other companies, you know,
Speaker 1: sort of backstopping them. If you'd asked me a week ago,
Speaker 1: you know whether or not this company was very likely
Speaker 1: to to fall into this kind of trap, I just said, oh,
Speaker 1: it's probably one of the least likely. Well. I think
Speaker 1: that this is an interesting thing here, and that there's
Speaker 1: been a lot of distressed assets, both on the minor
Speaker 1: site and exchanges in the market, and I think that
Speaker 1: Binance and f t X have both been bidding for
Speaker 1: them and there's been a bit of a back and
Speaker 1: forth between the two and CZ certainly that's the head
Speaker 1: of Binance certainly went out there and said, look, I
Speaker 1: don't like how we're being dragged through the mud in
Speaker 1: terms of the regulators, and I think that that sort
Speaker 1: of personal TIFFs sort of set off everything else, and
Speaker 1: that he decided he was going to kind of pull
Speaker 1: up the curtain on on what was going on at
Speaker 1: f t X and obviously has created this. But you know,
Speaker 1: it's an absolute mess. Canarian the coal mine is correct.
Speaker 1: But you know, this is the third time we've seen this.
Speaker 1: We saw Celsius go down doing similar type things, we
Speaker 1: saw Voyager go down similar type things, and now we
Speaker 1: see f t X going down, and you know, I
Speaker 1: think people are wondering who's going to be next. Well,
Speaker 1: this is it, isn't it. I Mean the thing is
Speaker 1: crypto clients who have kind of shunned the industry from
Speaker 1: being regulated may well start demanding, as you put it
Speaker 1: in your notes, regulation with regards certain where does that
Speaker 1: leave things? You know, Mike Mike Tyson always said that
Speaker 1: everyone's a champion until they get punched in the face.
Speaker 1: And I think that everyone wants to be bankless until
Speaker 1: the company they're dealing with goes bankrupt, and then they're
Speaker 1: wondering why the regulators aren't stepping in, where's my f
Speaker 1: D I C insurance, where's the regulators, where's the backstop
Speaker 1: from the Fed? And then the reality is I think
Speaker 1: that we're going to see more regulation and more safeties,
Speaker 1: certainly for US investors. It's been tough for for coin
Speaker 1: Base and and robin Hood. Uh, you know, slightly different
Speaker 1: businesses obviously, but those stocks are down in just two
Speaker 1: days of trading. Um, we'll have to leave it there, Douglas,
Speaker 1: Thank you. Douglas Boorthwick, Chief business Officer at I n
Speaker 1: X Limited,