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Speaker 1: All right, welcome to another episode of the Market Disruptor Show.

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Speaker 1: And today I am bringing you a very very very

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Speaker 1: important topic. Now, over the last several videos, I've talked

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Speaker 1: about ways to use financial products to grow your investments

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Speaker 1: faster than you've ever grown them before. I've talked about

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Speaker 1: how to spend money multiple times. I've talked about ways

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Speaker 1: to lower your taxes, ways to escalate, to speed up

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Speaker 1: your dollars. I've called the velocity of money, and using

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Speaker 1: different financial products to pay little to no taxes um

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Speaker 1: and to acquire assets without your own money. Now, these

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Speaker 1: strategies do require using some financial services that I've referenced,

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Speaker 1: and there is risk that's involved. But what risk is

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Speaker 1: it that you're going to take? How much exposure? How

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Speaker 1: much risk? And how can you mitigate that? Everything in

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Speaker 1: life has risk, and it's about how we manage mitigate

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Speaker 1: that risk. And so today I am going to dig

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Speaker 1: in deep. I am going to find out the questions

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Speaker 1: that you need to know. What type of risk is there,

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Speaker 1: how can we mitigate that risk? What should we be

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Speaker 1: looking for, what questions should we be answering, how should

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Speaker 1: we manage that risk? And so I'm excited to jump

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Speaker 1: into this. It's questions that are burning in my head,

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Speaker 1: and I know you want to know, so let's go

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Speaker 1: ahead and just jump right into the interview. I kind

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Speaker 1: of want to talk about bitcoin just itself. So, um,

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Speaker 1: it's interesting in your background coming from the you know,

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Speaker 1: fintech space and so um, you know, fintech financial technology,

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Speaker 1: um is a growing space. But it's almost like in

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Speaker 1: my opinion, and I didn't come from that background, but

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Speaker 1: cryptocurrency just kind of like took took fintech's steam and

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Speaker 1: just kind of ran a different direction where I think

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Speaker 1: fintech is more really kind of centrally controlled and it's

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Speaker 1: maybe I would look at it as an improvement offer,

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Speaker 1: whereas like cryptocurrency is a complete opportunity switch. How do

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Speaker 1: you look at those two fintech versus like cryptocurrency or bitcoin? Yeah,

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Speaker 1: I mean look very similarly. So one of the things

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Speaker 1: I realized working in fintech when you actually get into

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Speaker 1: the the nuts and bolts of how it works, almost

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Speaker 1: all of it is powered by the traditional banking infrastructure

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Speaker 1: on the back end. So yes, you might be using

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Speaker 1: a new you know, mobile app to access certain products

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Speaker 1: and services, but that fintech company behind the scenes is

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Speaker 1: partnered with a bank, UM, and they're subject to the

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Speaker 1: same constraints that the traditional banking system is subject to,

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Speaker 1: whether that's processing time related or fee related or jurisdiction

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Speaker 1: related UM. And so I thought there was, you know,

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Speaker 1: really never that much that was truly new under the sun.

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Speaker 1: In fintech, it's just a bunch of companies with better

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Speaker 1: front ends UH and better kind of marketing and customer

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Speaker 1: acquisition and user interfaces UM, building businesses on top of

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Speaker 1: the traditional stack. And that's true whether it's banking or

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Speaker 1: or insurance or payments or lending. And what fascinated me

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Speaker 1: about bitcoin when I first learned about it, as I

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Speaker 1: was like, holy shit, this is something that is completely new,

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Speaker 1: completely innovative, both bitcoin the asset and bitcoin the you know,

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Speaker 1: blockchain based payment network where folks can move value around

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Speaker 1: the world seven without ever touching a traditional bank or

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Speaker 1: a traditional financial services company. And I was, um, you know,

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Speaker 1: drawn to that as a as a concept, and that's

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Speaker 1: what you know, led me to initially started investing in it. Yeah, yeah,

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Speaker 1: it is. It is so so amazing. So yeah, you

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Speaker 1: definitely see it that way. Now. You talked about your

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Speaker 1: back background being in fintech and lending in fintech. So

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Speaker 1: is that like peer to peer kind of lending markets

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Speaker 1: things like that? Yeah, exactly. So most of my time

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Speaker 1: in fintech, what's spent at a company called the Orchard Platform.

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Speaker 1: We were the largest provider of data and technology solutions. Now,

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Speaker 1: one last thing. You know, these interviews go pretty long,

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Speaker 1: and I know the ads start to get pretty old.

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Speaker 1: Google puts lots of ads in these videos. YouTube does,

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Speaker 1: and I know I've seen the comments from a lot

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Speaker 1: of you that it's just too many ads in the videos.

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Speaker 1: So what I'm doing is I am bringing this interview

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Speaker 1: to you ad free. There's no ads in this video

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Speaker 1: at all. Rather than collecting the ad revenue that YouTube

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Speaker 1: pays me, I am going to give it to you

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Speaker 1: ad free, and instead Block five is going to be

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Speaker 1: paying for this video. So check out block five. It

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Speaker 1: is a way that you can continue to hold your bitcoin.

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Speaker 1: Hold your bitcoin, don't sell your bitcoin. Yeah, it's at

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Speaker 1: all time highs right now eighteen thousand, but it's going

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Speaker 1: to fifty thou a hundred thousand. You don't want to sell,

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Speaker 1: But if you need the money, you can leverage your bitcoin.

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Speaker 1: You can borrow against it um you can put it

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Speaker 1: to work. You could earn up to eight point six

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Speaker 1: annual interest rate by just just by holding bitcoin alone.

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Speaker 1: Now UM big Block five has agreed to pay me

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Speaker 1: if you sign up, but again I don't even want

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Speaker 1: to accept that money. I'm giving it back to you.

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Speaker 1: So that means if you sign up with an account

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Speaker 1: for a block five UM and you sign up and

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Speaker 1: use their service, you can earn up to two hundred

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Speaker 1: and fifty dollars in bitcoin just for signing up and

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Speaker 1: using their service. Now I'm giving that to you instead

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Speaker 1: of me taking it. So not only am I giving

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Speaker 1: you the money back to you, I'm also giving you

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Speaker 1: this interview completely ad free. So make sure to go

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Speaker 1: check out Block five There's a link down in the description.

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Speaker 1: Hopefully enjoy Block five check it out or an interest

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Speaker 1: on your bitcoin and enjoy this video commercial free. Two

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Speaker 1: institutional folks that were participating in that UH in that world.

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Speaker 1: So if you were a bank or a large credit fund,

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Speaker 1: or a family office or an r I A and

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Speaker 1: you wanted exposure to UM loans or pools of loans

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Speaker 1: coming from lending club prosper or the real estate funding

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Speaker 1: platforms or UH you know, Funding Circle and small Business

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Speaker 1: or so far. We kind of aggregated all the data

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Speaker 1: for you. We gave the we gave you the technology

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Speaker 1: that you needed to compare and contrast these platforms and

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Speaker 1: accumulate assets on them and then manage to our portfolio afterwards.

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Speaker 1: So I got a ton of exposure to all of

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Speaker 1: these different lending business models and I learned a lot

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Speaker 1: about what works and what doesn't work. And I would

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Speaker 1: say the two main themes that I learned that we've

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Speaker 1: applied a little bit at Block five is um Number one.

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Speaker 1: You don't want to just have a single product. If

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Speaker 1: you're a consumer facing business, you don't just want to

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Speaker 1: do one thing, uh for those clients. Because if you're

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Speaker 1: in a new, you know, innovative area of finance and

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Speaker 1: you only do one thing and then banks eventually come

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Speaker 1: in or some other traditional financial services firm comes into

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Speaker 1: the lower cost of capital than you, then it's really

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Speaker 1: hard to compete with them. Uh. Contrast that too, If

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Speaker 1: you can build a suite of products and constantly grow

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Speaker 1: the things that you're doing as a result the value

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Speaker 1: that you're adding for your clients, you can be in

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Speaker 1: a much better position in a scenario where you know,

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Speaker 1: Goldman Sachs decides to create a new division of its

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Speaker 1: bank and try to compete directly with you yum. So

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Speaker 1: that was one and then and then the second thing

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Speaker 1: that we learned was it's really helpful to have a

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Speaker 1: kind of niche or or very specific consumer or business

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Speaker 1: segment that you're going after. It enables you to target

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Speaker 1: your marketing. It enables you to um, you know, really

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Speaker 1: hone in on who your customer is and what you

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Speaker 1: can do to add value for them. And for us,

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Speaker 1: that's crypto investors, right, and so uh you know, we've um,

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Speaker 1: we've kind of planted a flag there as as one

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Speaker 1: of the first wealth management platforms for cryptocurrency investors. And

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Speaker 1: we think that's a great term because it encompasses a

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Speaker 1: lot of different you know, products and services and functionalities

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Speaker 1: and so um, you know, we might have been one

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Speaker 1: of the first places a use that term. And as

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Speaker 1: a result, there's not a lot of competition for the

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Speaker 1: Google keywords, so you know, you can you can benefit

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Speaker 1: a little bit in terms of your in terms of

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Speaker 1: your marketing by being focused on uh a niche at

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Speaker 1: least as a starting point. Yeah, Now, if we could

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Speaker 1: I'd like to just I want to dig into bitcoin

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Speaker 1: and I want to dig into the business a little

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Speaker 1: bit more. But before UM, just to kind of set

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Speaker 1: that up, I mean coming from peer to peer lending.

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Speaker 1: A lot of people maybe haven't heard of peer to

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Speaker 1: peer lending, and so I think most people think about

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Speaker 1: just going to the bank to get alone UM, but

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Speaker 1: there's this whole alternative lending world going on peer to

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Speaker 1: peer lending and that I like I said, a lot

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Speaker 1: of people probably don't know about UM and so they

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Speaker 1: don't understand how your business can work because they've never

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Speaker 1: even heard about the existing business right in the fintech space.

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Speaker 1: So UM, I mean real quickly, maybe lending club is

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Speaker 1: like the big name that I've probably heard of, right,

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Speaker 1: And so it's a way for either people with capital

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Speaker 1: to loan out or people that are looking to borrow

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Speaker 1: alternative source so I can make a higher return on

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Speaker 1: my money than I would have bank and someone might

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Speaker 1: be able to get a loan that they wouldn't order

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Speaker 1: or to be able to do, and it kind of

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Speaker 1: just matches people up. I mean is that about right? Yeah, Look,

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Speaker 1: that's a great example. One thing that I would UM

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Speaker 1: highlight about peer to peer lending that is similar to

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Speaker 1: cryptocurrency is that both things really emerged out of the

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Speaker 1: global financial crisis. So, coming out of the global financial crisis, UM,

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Speaker 1: all different kinds of banks pulled back on a lot

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Speaker 1: of the lending that they were doing. As a result,

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Speaker 1: there was a big hole in the marketplace for small

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Speaker 1: businesses that wanted to borrow or consumers that wanted to borrow.

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Speaker 1: And UH. The idea of peer to peer lending, which

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Speaker 1: over time started being referred to more broadly as online lending,

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Speaker 1: was that you don't have to be a bank to

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Speaker 1: help facilitate these loans, and you actually can get capital. Uh.

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Speaker 1: You know, you can get the borrowing side and the

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Speaker 1: lending side of the equation in kind of a marketplace construct. So,

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Speaker 1: you know, if I needed to or wanted to borrow

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Speaker 1: five thousand dollars and it was inefficient or expensive or

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Speaker 1: not available to me at a bank, I could go

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Speaker 1: to lending club dot com. You mark as an investor,

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Speaker 1: UH could look at, you know, information about Zach, this

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Speaker 1: borrower who's applying for a five thousand dollar loan at

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Speaker 1: a certain interest rate, and you could decide to make

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Speaker 1: that loan. UH, and then earn the yield. Uh, you know,

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Speaker 1: associated with the interest rate that the ball was paying. Yeah,

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Speaker 1: well you mentioned that. Um, it was really brought on by,

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Speaker 1: you know, the decrease in bank lending, so people needed

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Speaker 1: alternative sources of funding. But it's also because as investors,

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Speaker 1: we need more yield. So it's it's both, right. So

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Speaker 1: there's people that have money that just can't find yield anywhere,

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Speaker 1: and there's people that need money and they can't find it,

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Speaker 1: and so it's kind of that matchmaking service and there's

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Speaker 1: really needs on both sides of that. UM. So I

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Speaker 1: think that's interesting. But back to bitcoin now, I just

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Speaker 1: want to jump back into that for a minute now. UM,

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Speaker 1: we're talking at a time right now where bitcoin has

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Speaker 1: been making some big moves. Before we started recording, you

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Speaker 1: mentioned it. I see the bitcoin moves today. Um, so

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Speaker 1: we are, we are seeing this big move. I got

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Speaker 1: into bitcoin about the same time as you, um, and

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Speaker 1: it's been quite this interesting ride. Um. And you know

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Speaker 1: we're starting to see this bull run, if you will,

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Speaker 1: again happening. Um. What do you see being different today

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Speaker 1: in this new bull run as opposed to like the

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Speaker 1: kind of bull run that we had. Yeah, I think

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Speaker 1: there's um three very important and massive differences. So the

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Speaker 1: first is the macro economic backdrop that we find ourselves

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Speaker 1: in COVID. Uh is you know, UM, a global pandemic

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Speaker 1: ruining everything as I said, right thing like you said

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Speaker 1: before we started recording, UM, but it's really accelerating the

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Speaker 1: digitization of everything, and Bitcoin as a you know, truly digital,

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Speaker 1: truly global asset, UM I think benefits from that digitization. Additionally,

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Speaker 1: in the macroeconomic backdrop, you have UH central bank physcal

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Speaker 1: stimulus a k A. Money printing happening at a scale

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Speaker 1: that we've literally never seen before in the history of

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Speaker 1: central banking UM, which for folks that studied you know,

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Speaker 1: monetary policy and history, UH could make inflation in the

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Speaker 1: future much more likely and as a results, store value assets,

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Speaker 1: which I would say bitcoin is absolutely one, tend to

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Speaker 1: be good places to go. So that's our macroeconomic backdrop. Secondly,

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Speaker 1: and partially because of that macroeconomic backdrop, we have a

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Speaker 1: drumbeat of incredibly smart investors Paul Tutor, Jones, Stanley Druck

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Speaker 1: and Miller um Uh you know, Michael Sailor using a

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Speaker 1: public company's assets to make a big take, a big

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Speaker 1: Bitcoin position. Um, just occurring at what feels like, you know,

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Speaker 1: almost a monthly or we really pace sometimes now and

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Speaker 1: coming out and publicly saying here's why we did it. Uh,

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Speaker 1: here's why we think it's a smart position to have.

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Speaker 1: And that makes it so much easier for whether it's

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Speaker 1: institutional or other retail folks. Um, it makes us so

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Speaker 1: much more easier for them to you know, get conviction

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Speaker 1: around the same idea. So you've got that drum beat

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Speaker 1: of adoption from really smart investors. And then the last

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Speaker 1: thing is you have a much more robust ecosystem today

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Speaker 1: of not only cryptocurrency native companies like coin base or

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Speaker 1: block five and lots of others, but you also have

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Speaker 1: traditional fintech and traditional financial services companies PayPal, Square, robin Hood, Revolute.

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Speaker 1: I mean, the list of ideality right, the list goes

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Speaker 1: on and on. Um that weren't there. You know, none

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Speaker 1: of these things were true in seventeen like they are today.

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Speaker 1: So um, you've got all of that and we survived.

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Speaker 1: We just experienced this major event, right, And a lot

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Speaker 1: of times when you have new asset classes, the knock

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Speaker 1: on them until there's a you know, a major recession

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Speaker 1: or other financial you know, shock is, oh, well, they

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Speaker 1: haven't survived a recession, so how are they going to do?

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Speaker 1: How are they going to do when things get when

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Speaker 1: when things get a little you know rough, Well, we

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Speaker 1: could see it now, we can see exactly what happens

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Speaker 1: to bitcoin in a time where things got a little rough.

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Speaker 1: It's done phenomenally. And so I think the you know,

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Speaker 1: the times of people declaring that it's a bubble or

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Speaker 1: it's gonna die, or it's a fad, I think we

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Speaker 1: can kind of put that squarely in the rear view

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Speaker 1: mirror now. Um. And so for all those reasons, I think, uh,

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Speaker 1: you know, I a lot of folks that block fire

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Speaker 1: and a lot of other folks are more bullish than

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Speaker 1: we've ever been. And the good news is, if you

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Speaker 1: look at Google search data, we haven't really started even

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Speaker 1: getting anywhere near the levels of you know, retail searches.

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Speaker 1: H and kind of you could call it like frenzied

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Speaker 1: bullishness that may have accompanied the market back then. So

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Speaker 1: it feels very healthy, it feels very sustainable, um, and

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Speaker 1: it feels very early I think in in this uh,

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Speaker 1: in this boom. Yeah, yeah, I would definitely agree with

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Speaker 1: all that. I think the differences were like at the

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Speaker 1: beginning of a cycle, whereas in seventeen we're at the

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Speaker 1: end of a cycle. And so you're right, we're not

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Speaker 1: seeing that. And if I summarize some of what you

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Speaker 1: were saying, I think that like in was really and

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Speaker 1: you have to understand how technology cycles work. Are you,

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Speaker 1: of course, coming from fintech, understand that, And that's why

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Speaker 1: you've said, like, now we have UM a lot of

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Speaker 1: the support services that weren't there before, so the ecosystem

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Speaker 1: is growing. But really, seventeen we saw the rise of

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Speaker 1: the retail investors and it was just individual people speculators.

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Speaker 1: And now what I'm seeing, as you mentioned with Michael

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Speaker 1: Saylor moving his company's entire balance sheet over into bitcoin,

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Speaker 1: Palter Jones, et cetera, is now we're seeing this institutional

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Speaker 1: fomo right where now it's the it's the corporations and

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Speaker 1: the institutions, the Paul Tutor Jones is fomo and even

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Speaker 1: fidelities UM. And so this fomo is gonna be much

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Speaker 1: bigger than seventeen fomo. And then there's one more fomo

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Speaker 1: to come, which maybe is the next having we don't know,

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Speaker 1: but which will be the sovereign fomo at some point.

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Speaker 1: And we've already seen Iran, right, Iran said, they're too Uh,

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Speaker 1: they're starting to do that already. So, Um, that that

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Speaker 1: institutional or I'm sorry that sovereign Fomo is going to

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Speaker 1: be big when it comes. That's a. That's a that's

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Speaker 1: a wonderful glance into the crystal ball. Um, I think.

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Speaker 1: I mean, look, it wants these things in my view, once,

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Speaker 1: once you pass a certain point of adoption and momentum,

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Speaker 1: and I think we're there today, you can't put the

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Speaker 1: genie back in the bottle. And um, yeah, I mean

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Speaker 1: it's just gonna keep it's just gonna keep going. Yeah,

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Speaker 1: it's very early now, we have no crystal ball, and

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Speaker 1: you know, any things possible. People always want to throw

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Speaker 1: out all kinds of hypotheticals at me on my comments. Um,

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Speaker 1: and yeah, yeah, you're right. I mean, aliens can come

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Speaker 1: tomorrow and kill the whole world too. I mean, we

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Speaker 1: don't we don't know. The future is uncertain, right, And

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Speaker 1: I'm like, if you want to throw at hypotheticals, we

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Speaker 1: can throw out those out all day. But like you said,

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Speaker 1: every time it doesn't die, the chance of surviving goes

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Speaker 1: up and we were kind of past that point. Now

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Speaker 1: we have a new what a new senator in office

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Speaker 1: that's that's backing bitcoin, right, so that the politicians are

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Speaker 1: behind it now. Um, the the financial firms, which are

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Speaker 1: the biggest lobbying groups out there, they're in it now.

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Speaker 1: So the chance of it of it going away is slim.

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Speaker 1: And there's lots of analysts that are out there kind

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Speaker 1: of projecting these crazy prices. Um, you know, we're seeing

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Speaker 1: some people saying I think actually City Bank came out

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Speaker 1: and said three thousand by the end of one was

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Speaker 1: that right? Did you see that? Yeah? I mean that,

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Speaker 1: you know, there's there's a bit of h there's a

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Speaker 1: bit of an asterisk on it because the individual who

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Speaker 1: said this has been known as the individual within City

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Speaker 1: to make you know, really really bullish forecasts on gold

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Speaker 1: and stuff like that in the past. So, um, I

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Speaker 1: wouldn't say it's discredited. I mean I saw it. It's

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Speaker 1: a It was a three page report that got sent

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Speaker 1: out to CITYPP clients from one of their you know,

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Speaker 1: commodity analysts, and um, you know what, let's say he's wrong. Yeah,

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Speaker 1: let's say it only gets to a hundred thousands, like Yeah,

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Speaker 1: that's still an incredible, uh, you know, an incredible thing

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Speaker 1: to think about on a time horizon as short as

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Speaker 1: you know, the next I mean the end of only

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Speaker 1: twelve months away. Yeah, we're thirteen months away. I mean

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Speaker 1: that's that's not a long time from now. So we

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Speaker 1: have people saying that it could go to a hundred thousand,

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Speaker 1: two hundred thousand, three hundred thousand. I mean the numbers

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Speaker 1: are out there and I and I can easily make

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Speaker 1: the case. I made a video on how it can

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Speaker 1: easily get two hundred thousand, and I mean gold is

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Speaker 1: not mainstream, nobody uses gold to buy Starbucks or whatever,

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Speaker 1: but yet it's ten trillion. I said that offshore banks

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Speaker 1: aren't nobody. Most people don't use off shore banks, but

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Speaker 1: there's thirty to forty trillion there. So you start just

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Speaker 1: grabbing little pieces of these and all of a sudden

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Speaker 1: it's there, And so we don't need to put our

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Speaker 1: own speculations out there. But yeah, fifty thousand, hundred thousands,

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Speaker 1: undred thousand, it's not unrealistic. I mean it's a stretch,

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Speaker 1: but it's not unrealistic. And so I think that's why, UM,

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Speaker 1: kind of the services that you're providing seemed to be

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Speaker 1: such a useful thing because in bitcoin we use the

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Speaker 1: term total right like hold on for dear life, we

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Speaker 1: just basically hold. Um. I was talking with one of

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Speaker 1: one of the big crypto attorneys, bitcoin attorneys, and he

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Speaker 1: was telling me that, um, you know, if all these

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Speaker 1: people would just not be trading, if they would just

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Speaker 1: buy the bitcoin and hold it, they would have done

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Speaker 1: so much better. And I look at myself coming in

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Speaker 1: back when you did. I but I was buying these

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Speaker 1: things so cheap, and in the bull run, I was

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Speaker 1: just thrown around like chicklets. And I'm like, man, if

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Speaker 1: I could only get back what I had, right, why

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Speaker 1: didn't I just hold it? Of course now I do.

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Speaker 1: I had to learn. But but I only I could

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Speaker 1: have done that, And so UM, the ability to basically

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Speaker 1: be able to hold to hopefully one day have my

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Speaker 1: what is it today, sixteen thousand dollar bitcoin be worth

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Speaker 1: fifty in the future, or a hundred thousand maybe in

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Speaker 1: ten years even whatever. Um, but be able to access

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Speaker 1: capital out of that. I mean, that's basically what you

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Speaker 1: guys are doing. Yeah, I mean, look are are we have?

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Speaker 1: We have three products that are available today. Um. The

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Speaker 1: use case that you just subscribed described let's say bitcoins

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Speaker 1: a hundred thousand, you still don't want to sell it

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Speaker 1: because guess what we're gonna be talking about, um, the

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Speaker 1: next wave of sovereigns at that point, or or something else.

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Speaker 1: But you want to make a down payment or in

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Speaker 1: all cash offer on the house. Right and let's say

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Speaker 1: banks are you know, a few years from now still

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Speaker 1: the same as they are today, where they won't you know,

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Speaker 1: they don't treat that bitcoin as being valuable in the

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Speaker 1: eyes of the loan underwriter or someone who's you know,

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Speaker 1: thinking about giving you a mortgage. UM. With block Fire,

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Speaker 1: you can borrow cash secured by the value of your

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Speaker 1: bitcoin that rates as low as four point five. Additionally,

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Speaker 1: we have a product where you can earn a yield

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Speaker 1: on your bitcoin in bitcoin UH so that rates there

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Speaker 1: start at six percent, So you can earn a six

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00:21:15,040 --> 00:21:18,080
Speaker 1: percent annual yield on this asset that also has incredible

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Speaker 1: appreciation potential UM and UH and you can buy and

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Speaker 1: sell bitcoin on our platform as well, which is UM

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Speaker 1: really relevant for you know, new folks coming in That

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Speaker 1: happens all the time today. As our marketing at blocked

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Speaker 1: By goes more mainstream we have folks coming in and saying, well,

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Speaker 1: I don't know any bitcoin yet. It's like, okay, you

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Speaker 1: can connect your bank account, be a plaid, move some

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Speaker 1: money in via c H and uh and buy a

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Speaker 1: little bit of bitcoin. Um and then early next year,

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Speaker 1: the product that I'm most excited about, partially because it's

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Speaker 1: you know, our our newest product is we're gonna have

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Speaker 1: a Bitcoin rewards credit card. So instead of earning airline

404
00:21:51,760 --> 00:21:55,520
Speaker 1: miles or regular cash back based on your everyday spending,

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00:21:56,320 --> 00:21:59,280
Speaker 1: you uh, you, your rewards will be denominated in bitcoin,

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Speaker 1: so we one point five percent cash back and bitcoin

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Speaker 1: and um, I'll be able to throw my you know,

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Speaker 1: Delta m X in the trash because I'm not using

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Speaker 1: my Delta miles right now, anybody. I didn't use them before,

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Speaker 1: now I'm really not using um and and earn uh

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Speaker 1: and earn big poin so um for everybody listening. UM,

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Speaker 1: I want to dig in with you one, how is

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Speaker 1: it that you're able to pay these types of amounts

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Speaker 1: that you do? I want to dig in also into

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Speaker 1: what are the what are what are really the risk

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Speaker 1: that we need to be looking for? What should we

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Speaker 1: be watching to mitigate those risks? So I want to

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Speaker 1: ask you all those questions. So anybody listening and make

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Speaker 1: sure you stick around because we're gonna we're gonna dig

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Speaker 1: in deep and these are things that you really need

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Speaker 1: to know. But before we do, I want to just

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Speaker 1: dig into some of those products just a little bit, because, um,

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Speaker 1: two weeks ago, two or three weeks ago, I was

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Speaker 1: out hanging out with Robert Kiyosaki, Rich Dad, poor Dad,

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Speaker 1: and um, you know, he's been one of my biggest mentors.

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Speaker 1: His book was super influential in my life. And he

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Speaker 1: pounds that. He pounds the table on two things, and

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Speaker 1: one is like cash flow right, cash flow, cash flow ashlow,

429
00:23:00,359 --> 00:23:02,080
Speaker 1: And so I pound the table on cash flow. And

430
00:23:02,119 --> 00:23:04,520
Speaker 1: we talked about these people that have capital, they're trying

431
00:23:04,520 --> 00:23:06,520
Speaker 1: to get yield, and so that's one way we can

432
00:23:06,560 --> 00:23:09,640
Speaker 1: do it. So I have this asset on this asset

433
00:23:10,480 --> 00:23:13,720
Speaker 1: that's going up in value, hopefully hopefully going up in value, um,

434
00:23:13,760 --> 00:23:16,280
Speaker 1: but I can actually earned income against it at the

435
00:23:16,320 --> 00:23:18,080
Speaker 1: same time, almost like my real estate. So I might

436
00:23:18,119 --> 00:23:21,240
Speaker 1: own a home rental property and maybe it's appreciating. I

437
00:23:21,240 --> 00:23:23,720
Speaker 1: don't typically buy them for appreciation, but hopefully we get appreciation.

438
00:23:23,800 --> 00:23:26,480
Speaker 1: But also I'm getting casual out of at the same time.

439
00:23:26,480 --> 00:23:29,200
Speaker 1: So that's one of the options and how that works, right,

440
00:23:30,400 --> 00:23:32,119
Speaker 1: that's exactly right. And we you know, we pay a

441
00:23:32,200 --> 00:23:36,240
Speaker 1: yield on bitcoin end uh cash, which is held in

442
00:23:36,280 --> 00:23:39,080
Speaker 1: the form of stable coins on our platform, but it's

443
00:23:39,160 --> 00:23:41,520
Speaker 1: you know, interchangeable with dollars in a bank account. So

444
00:23:42,080 --> 00:23:45,400
Speaker 1: on cash you're an eight point six. On bitcoin, you're

445
00:23:45,400 --> 00:23:47,400
Speaker 1: in six percent on your first two and a half

446
00:23:47,760 --> 00:23:51,040
Speaker 1: and three on your balance above two and a half.

447
00:23:51,080 --> 00:23:53,639
Speaker 1: And it's simple. I mean, you see your accrued interest

448
00:23:53,680 --> 00:23:57,240
Speaker 1: every day. Once a month, the accrued interest becomes, you know,

449
00:23:57,320 --> 00:23:59,280
Speaker 1: part of your balance. You can withdraw it any time

450
00:23:59,320 --> 00:24:03,960
Speaker 1: you want, and uh yeah, yeah, that's it. It's really

451
00:24:04,320 --> 00:24:07,360
Speaker 1: forward product. The other thing I like again going back

452
00:24:07,400 --> 00:24:10,800
Speaker 1: to my um my conversation with Robert Kyasaki, he was

453
00:24:10,800 --> 00:24:14,280
Speaker 1: talking about how um when he buys new real estate projects,

454
00:24:14,480 --> 00:24:17,560
Speaker 1: he well, one, he never pays tax, he said, because

455
00:24:17,560 --> 00:24:21,080
Speaker 1: he never makes an income he buys all his properties

456
00:24:21,119 --> 00:24:23,840
Speaker 1: with He never uses his own money to buy properties,

457
00:24:23,880 --> 00:24:26,360
Speaker 1: he uses debt, so he pulls money out of one

458
00:24:26,400 --> 00:24:30,240
Speaker 1: property to buy another property. And so UM, using a

459
00:24:30,720 --> 00:24:33,680
Speaker 1: situation like this, I could park my bitcoin take out

460
00:24:33,800 --> 00:24:37,840
Speaker 1: debt against that bitcoin, use that new debt to buy

461
00:24:37,880 --> 00:24:41,080
Speaker 1: that real estate, and that's not a taxable event. I mean,

462
00:24:41,160 --> 00:24:43,400
Speaker 1: talk to your own cp A about that. But it's

463
00:24:43,440 --> 00:24:47,200
Speaker 1: not income. I'm borrowing against it and leveraging that unlocking

464
00:24:47,240 --> 00:24:50,439
Speaker 1: equity to then leverage it into another asset. I mean

465
00:24:50,680 --> 00:24:54,399
Speaker 1: and looked same same caveat. Talked to your accountant, and

466
00:24:54,440 --> 00:24:58,240
Speaker 1: this is not tax advice. But in addition to that

467
00:24:58,320 --> 00:25:02,359
Speaker 1: loan not being income, the interest that's charged to you

468
00:25:02,440 --> 00:25:05,320
Speaker 1: on that loan to the extent that you're using it for,

469
00:25:05,680 --> 00:25:09,719
Speaker 1: you know, investment purposes, real estate or otherwise. Just like

470
00:25:09,760 --> 00:25:14,800
Speaker 1: there's the mortgage interest deduction, UM is deductible against any

471
00:25:14,840 --> 00:25:18,240
Speaker 1: gains or income that you have in the same tax here. Right,

472
00:25:18,440 --> 00:25:21,680
Speaker 1: So there's a double whammy in terms of the tax benefit.

473
00:25:21,760 --> 00:25:24,000
Speaker 1: Not only are you not selling an asset that you

474
00:25:24,000 --> 00:25:28,479
Speaker 1: already have and triggering some capital potential capital gains tax

475
00:25:28,560 --> 00:25:31,880
Speaker 1: on it, um, you're generating liquidity, you're letting yourself buy

476
00:25:31,920 --> 00:25:36,360
Speaker 1: another asset, and the interest that you're charged on Now,

477
00:25:36,359 --> 00:25:39,800
Speaker 1: one last thing. You know, these interviews go pretty long,

478
00:25:39,840 --> 00:25:42,080
Speaker 1: and I know the ads start to get pretty old.

479
00:25:42,080 --> 00:25:44,720
Speaker 1: Google puts a lot of ads in these videos. YouTube does,

480
00:25:44,960 --> 00:25:46,640
Speaker 1: and I know I've seen the comments from a lot

481
00:25:46,640 --> 00:25:49,320
Speaker 1: of you that it's just too many ads in the videos.

482
00:25:49,400 --> 00:25:52,240
Speaker 1: So what I'm doing is I am bringing this interview

483
00:25:52,320 --> 00:25:55,240
Speaker 1: to you ad free. There's no ads in this video

484
00:25:55,280 --> 00:25:58,320
Speaker 1: at all. Rather than collecting the ad revenue that YouTube

485
00:25:58,320 --> 00:25:59,879
Speaker 1: pays me, I am going to give it to you

486
00:26:00,000 --> 00:26:03,000
Speaker 1: ad free, and instead Block five is going to be

487
00:26:03,080 --> 00:26:06,000
Speaker 1: paying for this video. So check out Block five. It

488
00:26:06,119 --> 00:26:09,000
Speaker 1: is a way that you can continue to hold your bitcoin.

489
00:26:09,080 --> 00:26:11,560
Speaker 1: Hold your bitcoin, don't sell your bitcoin. Yeah, it's at

490
00:26:11,560 --> 00:26:13,720
Speaker 1: all time highs right now eighteen thousand, but it's going

491
00:26:13,760 --> 00:26:16,440
Speaker 1: to fifty thou a hundred thousand. You don't want to sell.

492
00:26:16,560 --> 00:26:19,840
Speaker 1: But if you need the money, you can leverage your bitcoin.

493
00:26:19,880 --> 00:26:21,919
Speaker 1: You can borrow against it, um, you can put it

494
00:26:21,960 --> 00:26:24,240
Speaker 1: to work. You could earn up to eight point six

495
00:26:24,320 --> 00:26:28,160
Speaker 1: annual interest rate by just just by holding bitcoin alone. Now,

496
00:26:28,400 --> 00:26:31,360
Speaker 1: UM big block five has agreed to pay me if

497
00:26:31,400 --> 00:26:33,200
Speaker 1: you sign up, but again I don't even want to

498
00:26:33,200 --> 00:26:35,719
Speaker 1: accept that money. I'm giving it back to you. So

499
00:26:35,760 --> 00:26:37,320
Speaker 1: that means if you sign up with an account for

500
00:26:37,320 --> 00:26:39,760
Speaker 1: a block five UM and you sign up and use

501
00:26:39,800 --> 00:26:42,159
Speaker 1: their service, you can earn up to two hundred and

502
00:26:42,240 --> 00:26:45,000
Speaker 1: fifty dollars in bitcoin just for signing up and using

503
00:26:45,040 --> 00:26:46,760
Speaker 1: their service. Now I'm giving that to you instead of

504
00:26:46,760 --> 00:26:48,600
Speaker 1: me taking it. So not only am I giving you

505
00:26:48,600 --> 00:26:50,440
Speaker 1: the money back to you, I'm also giving you this

506
00:26:50,480 --> 00:26:53,360
Speaker 1: interview completely ad free. So make sure to go check

507
00:26:53,359 --> 00:26:55,800
Speaker 1: out Block five. There's a link down in the description.

508
00:26:56,040 --> 00:26:58,440
Speaker 1: Hopefully you enjoy Block five. Check it out, um earn

509
00:26:58,480 --> 00:27:02,000
Speaker 1: interest on your bitcoin and enjoy this video commercial free.

510
00:27:02,640 --> 00:27:04,639
Speaker 1: That liquidity that you're generating in the form of a

511
00:27:04,680 --> 00:27:08,000
Speaker 1: loan can also be deducted from other gains that you

512
00:27:08,080 --> 00:27:10,560
Speaker 1: might be making. So I mean, look, the reason this

513
00:27:10,600 --> 00:27:14,399
Speaker 1: all exist is because the US. Uh, the US is

514
00:27:14,440 --> 00:27:18,000
Speaker 1: you know, the land of debt and credit um, and

515
00:27:18,119 --> 00:27:23,639
Speaker 1: so borrowing is uh tax advantaged. And I'm se And

516
00:27:23,680 --> 00:27:27,840
Speaker 1: the question is just you know, uh, do you decide

517
00:27:27,880 --> 00:27:30,359
Speaker 1: to use that to your advantage? Yeah, and and and

518
00:27:30,400 --> 00:27:32,280
Speaker 1: you definitely shouldn't. I talk about that a lot. I mean,

519
00:27:32,520 --> 00:27:35,879
Speaker 1: taxes are single biggest expense. So if we can reduce

520
00:27:35,920 --> 00:27:39,080
Speaker 1: our biggest expense, it's like more income and so, um.

521
00:27:39,160 --> 00:27:41,520
Speaker 1: The it's not loopholes as in you're trying to get

522
00:27:41,560 --> 00:27:44,520
Speaker 1: around it, it's that they put tax policy, as you said,

523
00:27:44,560 --> 00:27:46,919
Speaker 1: it's all through debt creations. They want you to do

524
00:27:47,119 --> 00:27:50,320
Speaker 1: use debt and borrow debt and create debt and so um,

525
00:27:50,359 --> 00:27:51,920
Speaker 1: that's the way that we can do that. Again, talk

526
00:27:51,960 --> 00:27:54,040
Speaker 1: to your own cp A about that. But um, yeah,

527
00:27:54,119 --> 00:27:56,159
Speaker 1: instead of let's say you bought bit win eight thousand

528
00:27:56,200 --> 00:27:57,760
Speaker 1: and you sold it for now, I want to buy

529
00:27:57,800 --> 00:27:59,720
Speaker 1: this house or this new car, so I sell it

530
00:27:59,760 --> 00:28:01,400
Speaker 1: at sick teen thousand. Well, now I have to pay

531
00:28:01,480 --> 00:28:04,480
Speaker 1: tax on that eight thousand dollars profit, or I could

532
00:28:04,560 --> 00:28:06,960
Speaker 1: just borrow against it, use that debt to buy the

533
00:28:07,000 --> 00:28:10,080
Speaker 1: car or the house. It's not a taxable event. And

534
00:28:10,160 --> 00:28:12,120
Speaker 1: I can even write off the interest against that, which

535
00:28:12,119 --> 00:28:15,720
Speaker 1: again brings my tax will income down. So um, there's

536
00:28:15,720 --> 00:28:16,960
Speaker 1: a lot of ways you can do this. I made

537
00:28:16,960 --> 00:28:19,520
Speaker 1: a recent video about that and I kind of I

538
00:28:19,920 --> 00:28:22,040
Speaker 1: gave out some illustrations. But again, talk to your your

539
00:28:22,080 --> 00:28:23,720
Speaker 1: cp A. But that's it's a really good way to

540
00:28:23,760 --> 00:28:27,120
Speaker 1: do that. Now, Um, this is not much different than

541
00:28:27,119 --> 00:28:29,400
Speaker 1: how banks have worked since the beginning of time. I mean,

542
00:28:29,640 --> 00:28:32,200
Speaker 1: you deposit your money at the bank, they're supposed to

543
00:28:32,240 --> 00:28:34,560
Speaker 1: pay you an interest, and then they're loaning your money

544
00:28:34,560 --> 00:28:36,480
Speaker 1: out for you. And that's how they're able to pay

545
00:28:36,520 --> 00:28:38,200
Speaker 1: you the interest, right, I mean, that's that's how it's

546
00:28:38,200 --> 00:28:40,120
Speaker 1: supposed to work. Today we're not earning any interest. But

547
00:28:40,160 --> 00:28:42,480
Speaker 1: it's basically the banking model, but just like on a

548
00:28:42,560 --> 00:28:49,440
Speaker 1: private level. Yes, UM with uh, with with some nuance,

549
00:28:49,640 --> 00:28:54,080
Speaker 1: I would say, primarily in two areas. So UM. In

550
00:28:54,320 --> 00:28:58,360
Speaker 1: the first area is that Block five is not a bank. UM.

551
00:28:58,400 --> 00:29:02,560
Speaker 1: As a result, Uh, you know, there is risk associated

552
00:29:02,720 --> 00:29:05,240
Speaker 1: with funds held in an account with Block five, which

553
00:29:05,280 --> 00:29:09,040
Speaker 1: is different than you know, cash held in a bank account. Uh.

554
00:29:09,080 --> 00:29:13,440
Speaker 1: You know the benefits from FDIC insurance and other uh,

555
00:29:13,480 --> 00:29:18,320
Speaker 1: you know, federal protections that apply to bank accounts, so

556
00:29:18,360 --> 00:29:20,640
Speaker 1: the risk is different. Um. The second thing is that

557
00:29:22,000 --> 00:29:25,400
Speaker 1: the you know, the analogy that we were talking about

558
00:29:25,400 --> 00:29:27,560
Speaker 1: before the show started of private banks when you know

559
00:29:27,600 --> 00:29:30,520
Speaker 1: banks were allowed to fail. Uh. And this will also

560
00:29:30,560 --> 00:29:32,200
Speaker 1: tie into something that I know we're gonna talk about

561
00:29:32,280 --> 00:29:34,600
Speaker 1: later in the podcast. With the credit situation. You have

562
00:29:34,640 --> 00:29:36,080
Speaker 1: to think a little bit about what what type of

563
00:29:36,160 --> 00:29:40,440
Speaker 1: lending are we doing to generate this return? So you know,

564
00:29:40,520 --> 00:29:46,360
Speaker 1: it's one thing to be making unsecured loans to consumers

565
00:29:46,400 --> 00:29:50,200
Speaker 1: like in um our fintech lending club example, it's a

566
00:29:50,240 --> 00:29:53,360
Speaker 1: completely different thing to be lending folks money secured by

567
00:29:53,360 --> 00:29:57,120
Speaker 1: a hard asset like a house or their bitcoin. UM.

568
00:29:57,120 --> 00:30:00,440
Speaker 1: In Block five's case, the majority of what we're doing

569
00:30:00,480 --> 00:30:03,320
Speaker 1: to generate a yield is one of two things. Were

570
00:30:03,360 --> 00:30:08,640
Speaker 1: either lending secured by liquid assets UM, so folks are

571
00:30:08,960 --> 00:30:11,920
Speaker 1: borrowing dollars secured by their bitcoin, or on the institutional

572
00:30:11,920 --> 00:30:16,720
Speaker 1: side of our platform, borrowing bitcoin secured by dollars. Or

573
00:30:17,360 --> 00:30:24,080
Speaker 1: we're providing liquidity into markets UH for publicly traded products.

574
00:30:24,560 --> 00:30:27,040
Speaker 1: So the biggest one today where we're doing this is

575
00:30:27,360 --> 00:30:32,280
Speaker 1: the gray Scale Bitcoin Trust UM ticker g BTC. There's

576
00:30:32,280 --> 00:30:36,400
Speaker 1: a lending market there and so we're very active with

577
00:30:36,520 --> 00:30:39,600
Speaker 1: that product. We're actually one of the larger holders of

578
00:30:39,680 --> 00:30:43,719
Speaker 1: gray scale shares UM at block fi UM and as

579
00:30:43,760 --> 00:30:46,160
Speaker 1: a result, the things that we're doing are very very

580
00:30:46,160 --> 00:30:48,560
Speaker 1: low risk. So we made our first loan in January.

581
00:30:49,520 --> 00:30:52,480
Speaker 1: We've been around for over three years now. We've never

582
00:30:52,520 --> 00:30:56,960
Speaker 1: had a single loss across any of the UM activities

583
00:30:56,960 --> 00:31:01,920
Speaker 1: that we've done. UH, and we're fly regulated and domiciled

584
00:31:01,960 --> 00:31:05,600
Speaker 1: in in the U S So UM there's folks watching

585
00:31:05,600 --> 00:31:08,720
Speaker 1: this stuff and UH, but we're not a bank. We're

586
00:31:08,720 --> 00:31:11,520
Speaker 1: not a bank, right, It makes sense. Yeah, and so

587
00:31:11,560 --> 00:31:14,880
Speaker 1: that's a great it's a great transition. We'll jump into that. Um. So,

588
00:31:15,360 --> 00:31:18,440
Speaker 1: especially with the hardcore bitcoiners. I mean the ethos is

589
00:31:18,480 --> 00:31:21,480
Speaker 1: not your keys, not your coins, and so you're absolutely right.

590
00:31:21,560 --> 00:31:24,160
Speaker 1: I mean you give up those coins, those give up

591
00:31:24,160 --> 00:31:27,760
Speaker 1: those keys, and you add risk counterparty risk. I just

592
00:31:27,840 --> 00:31:29,920
Speaker 1: want everyone to know that there's always risk. There's risk

593
00:31:30,000 --> 00:31:32,160
Speaker 1: either way. Um, And so you have to kind of

594
00:31:32,240 --> 00:31:33,920
Speaker 1: understand what those risks ares. I want to dig into

595
00:31:33,960 --> 00:31:37,760
Speaker 1: that a little bit, um. But um, you know, at

596
00:31:37,800 --> 00:31:39,800
Speaker 1: times you if you want to earn extra money, you

597
00:31:39,840 --> 00:31:41,920
Speaker 1: have to give that up. And and even the money

598
00:31:41,960 --> 00:31:45,040
Speaker 1: in the bank isn't necessarily yours. The bank own owes

599
00:31:45,080 --> 00:31:46,800
Speaker 1: you that money, but it is fd I c ensured

600
00:31:46,840 --> 00:31:49,160
Speaker 1: where where yours isn't. So I understand there's a little

601
00:31:49,160 --> 00:31:52,320
Speaker 1: bit more risk there. Um. But I guess um too

602
00:31:52,440 --> 00:31:54,800
Speaker 1: full to really understand that risk. I think you were

603
00:31:54,840 --> 00:31:58,920
Speaker 1: explaining it's really who or how you're lending that money out.

604
00:31:59,480 --> 00:32:02,800
Speaker 1: And so I'm giving it to you, and I trust you.

605
00:32:02,800 --> 00:32:05,200
Speaker 1: You're a US based company, so I don't think you'll

606
00:32:05,240 --> 00:32:09,040
Speaker 1: do anything to defraud me because you'll end up in jail. Um.

607
00:32:09,040 --> 00:32:11,920
Speaker 1: But business could fail right. Businesses do fail UM, and

608
00:32:11,920 --> 00:32:14,120
Speaker 1: so really it comes down to the types of loans

609
00:32:14,120 --> 00:32:15,840
Speaker 1: that you're making. And I think a lot of people

610
00:32:15,920 --> 00:32:19,600
Speaker 1: don't understand how the financial markets work, and so they

611
00:32:19,600 --> 00:32:21,880
Speaker 1: don't understand those types of loans that you're making. So

612
00:32:22,160 --> 00:32:24,880
Speaker 1: you're typically loaning these two other financial institutions who are

613
00:32:24,880 --> 00:32:28,720
Speaker 1: then using that for like like options or like some

614
00:32:28,800 --> 00:32:30,880
Speaker 1: sort of like shorting or things like that where they

615
00:32:30,880 --> 00:32:37,200
Speaker 1: have to cover that correct. So our primary UH kind

616
00:32:37,240 --> 00:32:40,520
Speaker 1: of clients segment on the institutional lending side of our

617
00:32:40,560 --> 00:32:49,240
Speaker 1: business is market making and proprietary trading firms UM. The

618
00:32:49,320 --> 00:32:51,760
Speaker 1: vast majority of the firms that we work with are

619
00:32:51,800 --> 00:32:55,880
Speaker 1: never taking market directional bets, and we diligence not only

620
00:32:55,920 --> 00:33:00,280
Speaker 1: their financial performance and their track records and there you know,

621
00:33:00,400 --> 00:33:03,120
Speaker 1: assets under management and how they're structure, but also what

622
00:33:03,280 --> 00:33:06,080
Speaker 1: kind of trades are they making. And we primarily work

623
00:33:06,120 --> 00:33:10,080
Speaker 1: with folks who are conducting market neutral trading activities. What

624
00:33:10,120 --> 00:33:12,560
Speaker 1: does that mean? It means that you know, one way

625
00:33:12,560 --> 00:33:15,160
Speaker 1: you can make money is you buy bitcoin, you hold

626
00:33:15,200 --> 00:33:17,560
Speaker 1: onto it, if the price goes up, you make money.

627
00:33:18,080 --> 00:33:20,240
Speaker 1: Another way you can make money in the bitcoin market

628
00:33:20,360 --> 00:33:24,240
Speaker 1: is UM you buy bitcoin at coin base for you know,

629
00:33:24,480 --> 00:33:27,720
Speaker 1: sixteen thousand, eight hundred dollars and you sell it at

630
00:33:28,240 --> 00:33:33,160
Speaker 1: cracking for sixteen thousand, eight hundred dollars and fifty cents

631
00:33:33,680 --> 00:33:37,080
Speaker 1: and you just do that, you know, millions of times

632
00:33:37,080 --> 00:33:39,320
Speaker 1: a day, and that's kind of how you make your living.

633
00:33:41,600 --> 00:33:45,520
Speaker 1: Or another example would be UM. The futures market for

634
00:33:45,560 --> 00:33:49,800
Speaker 1: bitcoin is trading at a different level than the spot market.

635
00:33:50,360 --> 00:33:53,680
Speaker 1: So you can sell a bitcoin future for nineteen thousand

636
00:33:53,680 --> 00:33:57,480
Speaker 1: dollars and buy bitcoin in the spot market for UH

637
00:33:57,560 --> 00:34:01,800
Speaker 1: sixteen thousand, eight hundred and then eight for the future

638
00:34:01,840 --> 00:34:05,760
Speaker 1: to expire, converge with spot UM and collect that you know,

639
00:34:06,160 --> 00:34:10,880
Speaker 1: difference UH in terms of the two prices. Most of

640
00:34:10,920 --> 00:34:13,680
Speaker 1: the financing that we're providing the folks goes to those

641
00:34:13,680 --> 00:34:17,160
Speaker 1: types of activities UM and then depending on the borrower,

642
00:34:17,640 --> 00:34:21,600
Speaker 1: we will have leans over certain accounts that they have

643
00:34:21,719 --> 00:34:26,680
Speaker 1: in exchanges. They will post collateral to block five and

644
00:34:28,360 --> 00:34:32,280
Speaker 1: we're you know, a general creditor to their overall business,

645
00:34:32,480 --> 00:34:35,160
Speaker 1: which is usually less than five percent in crypto. They're

646
00:34:35,239 --> 00:34:37,560
Speaker 1: very active in traditional financial markets and have long track

647
00:34:37,600 --> 00:34:42,800
Speaker 1: records there. This type of lending is in the spectrum

648
00:34:42,800 --> 00:34:45,480
Speaker 1: of all different types of lending. One of the least

649
00:34:46,080 --> 00:34:49,719
Speaker 1: risky types that there is in two thousand and eight

650
00:34:49,760 --> 00:34:52,879
Speaker 1: and two thousand nine, when um, you know, we're having

651
00:34:52,920 --> 00:34:56,200
Speaker 1: massive issues in the in the mortgage market and other

652
00:34:56,239 --> 00:35:01,080
Speaker 1: markets as a result, this division within bank generally it's

653
00:35:01,120 --> 00:35:04,520
Speaker 1: referred to as prime brokerage equity financing, which is most

654
00:35:04,520 --> 00:35:08,759
Speaker 1: analogous to what we're doing. Never lost a penny think

655
00:35:08,760 --> 00:35:12,359
Speaker 1: about it. So these market making firms, when uh, you know,

656
00:35:12,440 --> 00:35:16,120
Speaker 1: markets get a little stressed, a little volatile, that's when

657
00:35:16,120 --> 00:35:20,640
Speaker 1: they're making more money uh than ever because they just

658
00:35:20,680 --> 00:35:22,359
Speaker 1: make money by you know, buying it for one price

659
00:35:22,400 --> 00:35:24,279
Speaker 1: and selling it for another when when things are moving

660
00:35:24,320 --> 00:35:27,640
Speaker 1: around a lot. So um, you know, we had a

661
00:35:27,640 --> 00:35:31,319
Speaker 1: great uh, we had a great period of time for

662
00:35:31,320 --> 00:35:34,040
Speaker 1: the business. We didn't like the bitcoin price going down,

663
00:35:34,040 --> 00:35:36,200
Speaker 1: but March of this year was a good period of

664
00:35:36,239 --> 00:35:41,759
Speaker 1: time for us in our institutional clients, um. And we

665
00:35:41,840 --> 00:35:45,040
Speaker 1: raised rates that we were paying to our retail clients

666
00:35:45,080 --> 00:35:48,439
Speaker 1: because there was more activity from this institutional client base,

667
00:35:48,480 --> 00:35:50,759
Speaker 1: so we're able to charge them more because we need

668
00:35:50,800 --> 00:35:53,640
Speaker 1: to borrow more. And then we passed that through to

669
00:35:53,680 --> 00:35:56,200
Speaker 1: our clients who are holding their assets here. Yeah, that

670
00:35:56,239 --> 00:35:58,640
Speaker 1: was a good stress test as you said it was

671
00:35:58,680 --> 00:36:00,440
Speaker 1: a good stress test for bitcoin in but it was

672
00:36:00,440 --> 00:36:02,640
Speaker 1: also a good stress test for your business as well,

673
00:36:02,719 --> 00:36:06,560
Speaker 1: So that's good. Now. Um, I was pretty shocked to

674
00:36:06,680 --> 00:36:10,200
Speaker 1: hear of a big, a big failure in the space,

675
00:36:10,239 --> 00:36:12,400
Speaker 1: and that was with kred, a company called cred. They

676
00:36:12,440 --> 00:36:14,960
Speaker 1: filed for bankruptcy, which again is a US based company,

677
00:36:15,040 --> 00:36:20,560
Speaker 1: US based regulated. Um, but they went bankrupt. Now, um,

678
00:36:20,640 --> 00:36:22,600
Speaker 1: it seems like, as I've kind of dug into that,

679
00:36:22,680 --> 00:36:26,040
Speaker 1: their business model was probably quite a bit different than yours, um,

680
00:36:26,080 --> 00:36:29,120
Speaker 1: where they were doing like investing into other products and

681
00:36:29,520 --> 00:36:31,879
Speaker 1: a lot of other risk exposure. Do you know, I mean,

682
00:36:31,920 --> 00:36:34,120
Speaker 1: do you care to compare what they were doing versus

683
00:36:34,200 --> 00:36:36,960
Speaker 1: how you're not doing that or what does that look like? Yeah,

684
00:36:36,960 --> 00:36:39,520
Speaker 1: so we actually, um, you know, put up a blog

685
00:36:39,560 --> 00:36:44,560
Speaker 1: post recently. In general, we don't like to uh you know,

686
00:36:44,640 --> 00:36:47,279
Speaker 1: speak ill of other folks in the crypto ecosystem, which

687
00:36:48,600 --> 00:36:51,720
Speaker 1: uh still very much a you know, kind of one team,

688
00:36:51,719 --> 00:36:55,200
Speaker 1: one dream industry that's in the beginning inning. So as

689
00:36:55,200 --> 00:36:58,520
Speaker 1: so long as people aren't committing fraud or something like that,

690
00:36:59,320 --> 00:37:01,200
Speaker 1: we should only say a nice thing. But but in

691
00:37:01,239 --> 00:37:03,960
Speaker 1: this case, I think I'm happy to you know, say

692
00:37:04,000 --> 00:37:06,520
Speaker 1: a little bit about some of the warnings that should

693
00:37:06,560 --> 00:37:08,200
Speaker 1: have come up. And if you're curious about how block

694
00:37:08,239 --> 00:37:10,719
Speaker 1: fight is different, it's the second post on our blog

695
00:37:10,840 --> 00:37:13,399
Speaker 1: right now block fi dot com slash blog. We talk

696
00:37:13,480 --> 00:37:17,360
Speaker 1: about some of the things that if you're an individual

697
00:37:17,400 --> 00:37:19,960
Speaker 1: trying to diligence some of the different options for earning

698
00:37:19,960 --> 00:37:22,640
Speaker 1: interest on your bitcoin. For example, I would encourage you

699
00:37:22,680 --> 00:37:25,120
Speaker 1: to look at this post and apply a kind of

700
00:37:25,320 --> 00:37:28,560
Speaker 1: level analysis across these categories to anyone that you're thinking

701
00:37:28,560 --> 00:37:31,759
Speaker 1: about working with. Great so so, then for people that

702
00:37:31,800 --> 00:37:34,279
Speaker 1: are looking to use these types of services, you're going

703
00:37:34,320 --> 00:37:35,960
Speaker 1: to give us a kind of an idea of what

704
00:37:36,000 --> 00:37:37,880
Speaker 1: people should be looking for, what they should be watching

705
00:37:37,880 --> 00:37:42,840
Speaker 1: out for exactly um so UM, where is the company based?

706
00:37:43,360 --> 00:37:48,160
Speaker 1: Who know? How are they regulated? Do the um you know,

707
00:37:48,239 --> 00:37:51,600
Speaker 1: does the company have a public LinkedIn page with lots

708
00:37:51,600 --> 00:37:55,200
Speaker 1: of employees who work there full time and have uh,

709
00:37:55,239 --> 00:37:59,719
Speaker 1: you know, previous professional experience that matches the kind of

710
00:37:59,760 --> 00:38:02,920
Speaker 1: thing that the company is trying to do? Sure the

711
00:38:02,920 --> 00:38:08,279
Speaker 1: team the team right, your institutional investors. You know, at

712
00:38:08,280 --> 00:38:15,760
Speaker 1: block five we we have university endowments, venture capital investors, Fidelity, Susquehanna,

713
00:38:16,360 --> 00:38:21,160
Speaker 1: um coin based we could lost capital. These are folks who, um,

714
00:38:21,200 --> 00:38:25,000
Speaker 1: you know, don't just throw their money around without doing

715
00:38:25,360 --> 00:38:29,040
Speaker 1: a ton of diligence. Um. In the example of CRED,

716
00:38:29,200 --> 00:38:31,759
Speaker 1: they had raised you know, funds largely be an I

717
00:38:31,800 --> 00:38:33,560
Speaker 1: C O and they actually found a way to do

718
00:38:33,640 --> 00:38:38,560
Speaker 1: two I C O s um. Uh, So you need

719
00:38:38,600 --> 00:38:40,759
Speaker 1: to look at all of these things. Uh. The CRED

720
00:38:40,840 --> 00:38:44,520
Speaker 1: situation is really unfortunate. I feel I feel horrible for

721
00:38:44,560 --> 00:38:48,360
Speaker 1: anyone who was involved in it. I think that, um,

722
00:38:49,239 --> 00:38:51,120
Speaker 1: you know, there were a couple of warning signs. So

723
00:38:52,239 --> 00:38:56,759
Speaker 1: one was that they you know, publicly stated a few

724
00:38:56,800 --> 00:39:01,759
Speaker 1: times that they were generating returns lending outside of the

725
00:39:01,800 --> 00:39:08,360
Speaker 1: crypto ecosystem entirely and into uh Chinese Uh kind of

726
00:39:08,400 --> 00:39:14,640
Speaker 1: like lending markets now, Um, anytime you're doing global lending,

727
00:39:14,920 --> 00:39:17,839
Speaker 1: you know, there's this kind of risk tier system which

728
00:39:17,880 --> 00:39:21,160
Speaker 1: is based on the ability to enforce laws and and

729
00:39:21,160 --> 00:39:26,840
Speaker 1: and whether you know places operate advantageously towards lenders. And

730
00:39:27,000 --> 00:39:31,759
Speaker 1: China doesn't score well does doesn't score well on on

731
00:39:31,800 --> 00:39:35,120
Speaker 1: that risk framework. Okay. Another thing that that CRED was

732
00:39:35,160 --> 00:39:39,040
Speaker 1: doing that made no sense whatsoever for folks who are

733
00:39:39,080 --> 00:39:43,200
Speaker 1: lending bitcoin. They would take the dollar value of the

734
00:39:43,239 --> 00:39:47,960
Speaker 1: bitcoin on the day that you funded an account, UM,

735
00:39:48,120 --> 00:39:50,440
Speaker 1: lock in that dollar value, pay you a yield on

736
00:39:50,480 --> 00:39:53,320
Speaker 1: that dollar value, and then at the end of whatever

737
00:39:53,480 --> 00:39:56,080
Speaker 1: term you had committed to lend to them, convert the

738
00:39:56,120 --> 00:40:01,160
Speaker 1: dollar value back into bitcoin. So yeah, Upsite, you don't

739
00:40:01,160 --> 00:40:03,439
Speaker 1: you're not holding onto the upside of bitcoin. That they

740
00:40:03,480 --> 00:40:07,759
Speaker 1: took the whole purpose of owning bitcoin out of it,

741
00:40:08,520 --> 00:40:10,640
Speaker 1: um and we're just using bitcoin as a way to

742
00:40:10,680 --> 00:40:15,680
Speaker 1: get cash to you know, basically lend uh in China.

743
00:40:16,440 --> 00:40:19,239
Speaker 1: And then specifically within the risk management category that there

744
00:40:19,280 --> 00:40:22,320
Speaker 1: was no one that I ever saw on that team

745
00:40:22,440 --> 00:40:27,120
Speaker 1: who is familiar with the types of lending in risk

746
00:40:27,239 --> 00:40:29,760
Speaker 1: management that you need to be sophisticated in to operate

747
00:40:29,800 --> 00:40:32,680
Speaker 1: in the markets that folks like block Fire and Genesis

748
00:40:32,719 --> 00:40:36,720
Speaker 1: Capital are operating in specifically uh you know, prime broker

749
00:40:36,760 --> 00:40:42,080
Speaker 1: EJ equity type uh financing transactions. UM. So look, it's

750
00:40:42,080 --> 00:40:44,279
Speaker 1: really unfortunate. I've I've heard a lot of folks. I've

751
00:40:44,280 --> 00:40:47,279
Speaker 1: seen some like banter on Twitter where people are saying,

752
00:40:47,280 --> 00:40:51,279
Speaker 1: you know, I, um, I have my assets earning a

753
00:40:51,360 --> 00:40:54,520
Speaker 1: yield and a couple of places in order to diversify

754
00:40:54,600 --> 00:40:59,880
Speaker 1: my risk. And I would say to folks, that's fine

755
00:41:00,719 --> 00:41:05,560
Speaker 1: if you're holding every platform to the same high standard

756
00:41:06,080 --> 00:41:07,799
Speaker 1: of needing to have a team that makes a ton

757
00:41:07,840 --> 00:41:13,000
Speaker 1: of sense, needing to have institutional investors, needing to be

758
00:41:13,360 --> 00:41:18,759
Speaker 1: you know, domiciled and and and ideally heavily regulated. The

759
00:41:18,840 --> 00:41:22,760
Speaker 1: more regulated the better. In the US, not not somewhere else.

760
00:41:22,840 --> 00:41:25,040
Speaker 1: Not Oh, we have a few people in the US market,

761
00:41:25,360 --> 00:41:30,960
Speaker 1: but we actually originally incorporated in China or some other place. Um.

762
00:41:31,640 --> 00:41:34,479
Speaker 1: On the risk spectrum of things, as a company, doing

763
00:41:34,480 --> 00:41:37,879
Speaker 1: an I c OH is much more risky than raising

764
00:41:37,960 --> 00:41:40,719
Speaker 1: capital the traditional way because it's still a new type

765
00:41:40,719 --> 00:41:44,719
Speaker 1: of fundraising. It's not clear um. So so I would

766
00:41:44,800 --> 00:41:47,200
Speaker 1: kind of count that as a ding um. And it's

767
00:41:47,200 --> 00:41:49,759
Speaker 1: only beneficial to diversify your risk if you're doing it

768
00:41:49,760 --> 00:41:51,920
Speaker 1: on a level playing field in terms of that initial

769
00:41:51,960 --> 00:41:56,520
Speaker 1: counterparty risk that you're taking. So I would just I

770
00:41:56,520 --> 00:41:59,040
Speaker 1: would encourage folks to not think of it as simply

771
00:41:59,040 --> 00:42:01,480
Speaker 1: as oh, there's two that I can only yield on

772
00:42:01,560 --> 00:42:05,200
Speaker 1: my bitcoin on, I'm gonna split my bitcoin between the

773
00:42:05,200 --> 00:42:07,839
Speaker 1: two of them to diversify my risk. The only thing

774
00:42:07,880 --> 00:42:11,800
Speaker 1: that matters in that initial risk assessment is the quality

775
00:42:11,840 --> 00:42:15,560
Speaker 1: of the of the individual firm that you're lending bitcoin too,

776
00:42:15,680 --> 00:42:17,960
Speaker 1: and if you don't have a high bar there, then

777
00:42:18,440 --> 00:42:21,000
Speaker 1: you're taking on risk. Yeah. No, that makes sense, and

778
00:42:21,080 --> 00:42:23,480
Speaker 1: as an investor, we always need to be managing that risk,

779
00:42:23,520 --> 00:42:25,160
Speaker 1: and we do that based off of the asset we're

780
00:42:25,160 --> 00:42:28,359
Speaker 1: going into. So, for example, I would never put if

781
00:42:28,400 --> 00:42:32,120
Speaker 1: I was invested into bitcoin or crypto, bitcoin is gonna

782
00:42:32,120 --> 00:42:34,040
Speaker 1: be way safer than some brand new all coin that

783
00:42:34,120 --> 00:42:38,080
Speaker 1: just bumped up whatever, a WiFi defy coin whatever. Right,

784
00:42:38,120 --> 00:42:40,440
Speaker 1: So like on a risk adjusted basis, I wouldn't put

785
00:42:40,440 --> 00:42:42,560
Speaker 1: the same amount of money into both. Or like gold,

786
00:42:42,680 --> 00:42:44,680
Speaker 1: I wouldn't put the same amount of money into physical

787
00:42:44,680 --> 00:42:47,120
Speaker 1: goals is I would to a explorer like a gold

788
00:42:47,120 --> 00:42:49,919
Speaker 1: exploring company for example. Right, So because one is more risk,

789
00:42:49,920 --> 00:42:52,200
Speaker 1: you have to put less money in UM, but of

790
00:42:52,200 --> 00:42:54,520
Speaker 1: course they make more money so it helps offset that,

791
00:42:54,560 --> 00:42:56,759
Speaker 1: whereas in your world maybe not so much. But UM,

792
00:42:56,840 --> 00:42:58,600
Speaker 1: I want to jump past that, and what I'd like

793
00:42:58,680 --> 00:43:02,319
Speaker 1: to find out is, uh, how it would work in

794
00:43:02,360 --> 00:43:08,400
Speaker 1: a worst case scenario. So um U, I understand that

795
00:43:08,440 --> 00:43:12,320
Speaker 1: you're regulated in the US UM and heavily regulated domas

796
00:43:12,320 --> 00:43:14,200
Speaker 1: held and regulated in the U S. So UM, that

797
00:43:14,280 --> 00:43:16,600
Speaker 1: gives me confidence in that there's probably not going to

798
00:43:16,680 --> 00:43:18,320
Speaker 1: be fraud going on because like I said, oh, you

799
00:43:18,320 --> 00:43:20,120
Speaker 1: guys would up in prison. I don't think you want that.

800
00:43:20,880 --> 00:43:23,000
Speaker 1: But that doesn't mean that the business model won't have

801
00:43:23,120 --> 00:43:25,759
Speaker 1: its problems. So the market could crash the companies are

802
00:43:25,760 --> 00:43:27,719
Speaker 1: a loaning to the loans, I mean, you know, things

803
00:43:27,760 --> 00:43:30,520
Speaker 1: could happen. So let's say that you do have a

804
00:43:30,680 --> 00:43:34,359
Speaker 1: number of companies default and you lose money. So how

805
00:43:34,400 --> 00:43:37,440
Speaker 1: does that play out? What would there be a chance

806
00:43:37,440 --> 00:43:39,520
Speaker 1: where maybe I don't get all my money back, I

807
00:43:39,560 --> 00:43:41,920
Speaker 1: get half of it, or is it something where like

808
00:43:42,000 --> 00:43:44,200
Speaker 1: I don't get any of it or some of it

809
00:43:44,280 --> 00:43:46,400
Speaker 1: like actually like held in my name, So in a

810
00:43:46,400 --> 00:43:50,440
Speaker 1: bankruptcy situation, I would still get access to my assets.

811
00:43:50,640 --> 00:43:56,719
Speaker 1: How does that work? Well, Um, the reality is it

812
00:43:56,800 --> 00:44:01,680
Speaker 1: depends on this scenario. Um. But structurally, there are a

813
00:44:01,719 --> 00:44:07,840
Speaker 1: few things that we have in place too h create

814
00:44:08,160 --> 00:44:11,560
Speaker 1: a lot of protection against those types of events. The

815
00:44:11,560 --> 00:44:16,920
Speaker 1: first thing is we're a very well capitalized AH business.

816
00:44:16,960 --> 00:44:20,200
Speaker 1: So we have over a hundred million dollars of equity

817
00:44:20,200 --> 00:44:23,480
Speaker 1: of block fire right now that uh sits in a

818
00:44:23,600 --> 00:44:28,560
Speaker 1: first lost position structurally, So first lost position meaning you

819
00:44:28,600 --> 00:44:30,680
Speaker 1: guys would take the loss before you would pass it

820
00:44:30,719 --> 00:44:37,279
Speaker 1: down to any of the depositors. Correct m. Secondarily, so

821
00:44:37,320 --> 00:44:39,120
Speaker 1: that's we could almost look at that as like a

822
00:44:39,160 --> 00:44:42,160
Speaker 1: hundred million dollar insurance policy that would be used before

823
00:44:42,160 --> 00:44:46,840
Speaker 1: we'd go into our funds. Kind of Yeah, with the

824
00:44:46,880 --> 00:44:49,800
Speaker 1: caveat that it's not an insurance, not insurance, but you guys,

825
00:44:49,920 --> 00:44:52,280
Speaker 1: you guys have that as a war chest that before

826
00:44:52,320 --> 00:44:54,839
Speaker 1: it dips into our money. Yes, and that war chest

827
00:44:54,960 --> 00:44:59,440
Speaker 1: is gonna is gonna keep growing. Um. So the second

828
00:44:59,440 --> 00:45:04,799
Speaker 1: thing is, uh, we create a lot of diversification and

829
00:45:05,880 --> 00:45:09,719
Speaker 1: over time risk reduction in the activities that we're doing

830
00:45:09,760 --> 00:45:14,839
Speaker 1: to generate these returns. So, um, what our risk team

831
00:45:14,920 --> 00:45:19,279
Speaker 1: is doing on a you know, daily basis or a

832
00:45:19,320 --> 00:45:21,880
Speaker 1: real time basis, depending on what part of risk management

833
00:45:21,880 --> 00:45:25,839
Speaker 1: we're talking about, is looking at that equity, looking at

834
00:45:26,480 --> 00:45:29,680
Speaker 1: counterparties that are on board, and looking at the collateralization

835
00:45:29,840 --> 00:45:35,600
Speaker 1: ratios and taking steps to reduce risk. Always be reducing risk.

836
00:45:36,080 --> 00:45:39,160
Speaker 1: So um. You know, one thing that's really simple that

837
00:45:39,239 --> 00:45:42,200
Speaker 1: I can tell you is that we don't have any

838
00:45:42,239 --> 00:45:47,279
Speaker 1: single borrowers that are above a certain percentage of our

839
00:45:48,080 --> 00:45:54,360
Speaker 1: available equity capital. So there's no one person, there's no

840
00:45:54,440 --> 00:45:58,680
Speaker 1: one borrower that could fail, that would put our business

841
00:45:58,760 --> 00:46:04,480
Speaker 1: in a position where UH client funds are at risk. UM.

842
00:46:04,520 --> 00:46:07,680
Speaker 1: You would actually need to see multiple UH and even

843
00:46:07,719 --> 00:46:14,040
Speaker 1: then you have collateral UH from those borrowers to mitigate

844
00:46:14,120 --> 00:46:21,759
Speaker 1: that risk. And we've been pretty well battle tested, you know,

845
00:46:21,800 --> 00:46:24,680
Speaker 1: as a company who we made our first loan when

846
00:46:24,760 --> 00:46:29,279
Speaker 1: bitcoin was around fifteen thousand on the way down from

847
00:46:29,280 --> 00:46:35,640
Speaker 1: twenty in early in early two years. Not only did we,

848
00:46:36,040 --> 00:46:41,040
Speaker 1: you know, UH survive March of this year, UM, we

849
00:46:41,080 --> 00:46:44,319
Speaker 1: survived it in a way that was better for our

850
00:46:44,360 --> 00:46:47,719
Speaker 1: clients than I believe any other platform that does this

851
00:46:47,840 --> 00:46:50,640
Speaker 1: type of activity. Boasted both in terms of our clients

852
00:46:50,680 --> 00:46:52,880
Speaker 1: who had borrowed dollars and in terms of our clients

853
00:46:52,880 --> 00:46:55,920
Speaker 1: who were holding assets here because we increased rates that

854
00:46:55,960 --> 00:46:58,480
Speaker 1: we were paying them and we were the only lender

855
00:46:58,600 --> 00:47:02,919
Speaker 1: in the market that was actively lending UH during March

856
00:47:03,000 --> 00:47:05,799
Speaker 1: twelve and immediately following because our risk system is so

857
00:47:05,880 --> 00:47:08,200
Speaker 1: dialed in, and the way these systems work, it's a

858
00:47:08,239 --> 00:47:10,560
Speaker 1: little bit like you can make a comparison to UM

859
00:47:11,000 --> 00:47:15,360
Speaker 1: two machine learning, where the more data you get UH,

860
00:47:15,480 --> 00:47:20,720
Speaker 1: the more diversified the data sources are, the more UH

861
00:47:21,000 --> 00:47:23,719
Speaker 1: touch points you have that you can run models and

862
00:47:23,760 --> 00:47:29,040
Speaker 1: scenario analysis on the stronger your system gets. And uh,

863
00:47:29,080 --> 00:47:31,560
Speaker 1: that's where I think we're ahead of anyone else in

864
00:47:31,640 --> 00:47:33,880
Speaker 1: terms of our risk management because we've been in the market,

865
00:47:34,200 --> 00:47:36,840
Speaker 1: We've been in the market longer, doing it a bigger scale,

866
00:47:36,920 --> 00:47:40,319
Speaker 1: through more market events, with a successful track record the

867
00:47:40,440 --> 00:47:45,640
Speaker 1: entire way, UM, and every day we get better. Yeah, now,

868
00:47:45,840 --> 00:47:48,319
Speaker 1: UM that that that'll make sense and it's good to hear. Now.

869
00:47:48,560 --> 00:47:51,160
Speaker 1: One other question I have is um you mentioned that

870
00:47:51,200 --> 00:47:53,640
Speaker 1: you have that you know war chest, that hundred million dollars.

871
00:47:53,640 --> 00:47:57,480
Speaker 1: It's kind of in first lost position you called it UM. Typically,

872
00:47:57,520 --> 00:48:00,959
Speaker 1: like in in a corporate environment, for example, the bonds

873
00:48:01,000 --> 00:48:02,960
Speaker 1: are gonna get paid before the stockholders get paid. So

874
00:48:03,000 --> 00:48:05,840
Speaker 1: a bondholder debt would get paid before the stockholder we

875
00:48:05,880 --> 00:48:07,840
Speaker 1: get paid. But even within that debt there's like different

876
00:48:07,920 --> 00:48:11,600
Speaker 1: levels of seniority. I'm just curious where do the depositors

877
00:48:11,600 --> 00:48:14,400
Speaker 1: fit into that hierarchy of getting paid out in some

878
00:48:14,480 --> 00:48:19,560
Speaker 1: sort of a default to liquidity type of event. There

879
00:48:19,600 --> 00:48:26,080
Speaker 1: are the only other corporate borrowings that block FI has

880
00:48:26,920 --> 00:48:34,279
Speaker 1: um are collateralized, so uh, those already have you know,

881
00:48:34,480 --> 00:48:42,680
Speaker 1: collateral posted to them, and then it's our clients depositors,

882
00:48:43,120 --> 00:48:46,759
Speaker 1: the company depositors to the company, UM, because all the

883
00:48:46,800 --> 00:48:51,160
Speaker 1: rest has been investment capital, so that falls below the

884
00:48:51,520 --> 00:48:54,600
Speaker 1: So we don't have like like there's not there aren't

885
00:48:55,080 --> 00:49:00,680
Speaker 1: you know, multiple multiple tranches of debt. UM. There's only two?

886
00:49:01,480 --> 00:49:05,839
Speaker 1: Got it? Okay? Now? UM, you mentioned how UM with

887
00:49:05,920 --> 00:49:08,399
Speaker 1: cred there was like some warning signs that people might

888
00:49:08,440 --> 00:49:12,439
Speaker 1: have seen. UM. As far as what you guys are doing,

889
00:49:12,520 --> 00:49:14,719
Speaker 1: do you put out some sort of like reporting that

890
00:49:14,760 --> 00:49:17,840
Speaker 1: shows some sort of transparency UM, whether that be I

891
00:49:17,840 --> 00:49:20,560
Speaker 1: don't know, income reports or debt report, I don't know,

892
00:49:20,920 --> 00:49:24,439
Speaker 1: what do you guys have? What do you do with that? UM? Yeah,

893
00:49:24,480 --> 00:49:29,520
Speaker 1: So we share monthly updates with everyone who's a client

894
00:49:29,560 --> 00:49:34,120
Speaker 1: on our platform UM, which we haven't put anything out

895
00:49:34,200 --> 00:49:39,800
Speaker 1: that has, you know, kind of comprehensive financials or stats

896
00:49:39,880 --> 00:49:43,279
Speaker 1: yet it's something we're working on. UM. There's a bit

897
00:49:43,280 --> 00:49:47,640
Speaker 1: of a back and forth with our investors who are

898
00:49:47,680 --> 00:49:50,319
Speaker 1: cut from the venture capital cloth, and they're very much

899
00:49:50,320 --> 00:49:54,840
Speaker 1: of the mindset that UM, you know, don't don't share

900
00:49:54,880 --> 00:49:57,480
Speaker 1: anything that you don't need to because it's competitive intel

901
00:49:57,560 --> 00:50:00,520
Speaker 1: for pros who want to know how you're doing and

902
00:50:00,520 --> 00:50:04,560
Speaker 1: how well you're doing it, um, But we share monthly updates.

903
00:50:04,800 --> 00:50:09,160
Speaker 1: We make ourselves very available to any questions that our

904
00:50:09,200 --> 00:50:13,880
Speaker 1: clients have. I think if uh, you know, we might

905
00:50:13,920 --> 00:50:15,719
Speaker 1: be the only company in crypto that has a phone

906
00:50:15,800 --> 00:50:18,279
Speaker 1: number where you can call and talk to the team anytime,

907
00:50:19,200 --> 00:50:23,160
Speaker 1: any question that you have. I'm very accessible. Uh, folks

908
00:50:23,160 --> 00:50:27,160
Speaker 1: on our team are very accessible, whether it's risk management questions,

909
00:50:27,280 --> 00:50:30,680
Speaker 1: or security questions or financial questions. So I would encourage

910
00:50:30,680 --> 00:50:34,759
Speaker 1: folks to ask. But on the transparency reporting and like

911
00:50:34,800 --> 00:50:37,120
Speaker 1: sharing numbers on a regular basis, it's a it's an

912
00:50:37,160 --> 00:50:39,360
Speaker 1: area where we've still we've still got some work to do.

913
00:50:39,719 --> 00:50:42,359
Speaker 1: Got it well, I can say that, um, you know,

914
00:50:42,440 --> 00:50:45,320
Speaker 1: given given the platform that I have, I can typically

915
00:50:45,320 --> 00:50:47,120
Speaker 1: get a hold of most people I need to. And

916
00:50:47,160 --> 00:50:50,359
Speaker 1: there was another platform, not a direct competitive yours, but

917
00:50:50,360 --> 00:50:52,759
Speaker 1: but in the same space some of their services and

918
00:50:52,920 --> 00:50:56,279
Speaker 1: they're offshore, and um, I tried multiple times to get

919
00:50:56,320 --> 00:50:58,239
Speaker 1: in touch with them. I wanted to get somebody on

920
00:50:58,280 --> 00:50:59,719
Speaker 1: from the show. I wanted to see what kind of

921
00:50:59,760 --> 00:51:02,239
Speaker 1: numb burds were poor anything, and like they wouldn't give

922
00:51:02,239 --> 00:51:04,919
Speaker 1: me anything, and that just not did not seem good,

923
00:51:05,040 --> 00:51:06,879
Speaker 1: you know what I mean? Like I felt like they

924
00:51:06,960 --> 00:51:09,160
Speaker 1: just were putting up this wall and so that's that

925
00:51:09,400 --> 00:51:11,680
Speaker 1: was definitely a warning sign for me. One they're outside

926
00:51:11,680 --> 00:51:14,880
Speaker 1: of US regulation too. They just didn't want to like talk,

927
00:51:14,960 --> 00:51:17,160
Speaker 1: and that seemed kind of weird. So the fact that

928
00:51:17,200 --> 00:51:19,040
Speaker 1: you guys have that phone number, I'm sure it seems

929
00:51:19,040 --> 00:51:22,200
Speaker 1: like it would help. But Yeah, we've gone over a

930
00:51:22,239 --> 00:51:24,600
Speaker 1: lot of good stuff. I think he really helped a

931
00:51:24,640 --> 00:51:26,440
Speaker 1: lot for me answer a lot of questions I have.

932
00:51:26,640 --> 00:51:28,760
Speaker 1: I know we're kind of a little bit over time.

933
00:51:28,840 --> 00:51:30,719
Speaker 1: Is there anything else that we haven't covered that you

934
00:51:30,719 --> 00:51:33,080
Speaker 1: want to kind of throw out there? I don't think so, Mark,

935
00:51:33,120 --> 00:51:35,239
Speaker 1: this is a great conversation, man. I appreciate you having

936
00:51:35,280 --> 00:51:38,520
Speaker 1: me back on and I'm happy to come back again

937
00:51:39,120 --> 00:51:42,040
Speaker 1: some other time. And if anybody wants to reach out

938
00:51:42,080 --> 00:51:44,080
Speaker 1: to me, um, like I said, really easy to find

939
00:51:44,120 --> 00:51:48,640
Speaker 1: Block five zac on Twitter, our our phone number, and

940
00:51:48,760 --> 00:51:51,680
Speaker 1: uh our general email line are all available on our

941
00:51:51,719 --> 00:51:54,440
Speaker 1: website Block five dot com and we'd love to hear

942
00:51:54,480 --> 00:51:56,080
Speaker 1: for you. So we'd love to hear from you, So

943
00:51:56,120 --> 00:51:58,560
Speaker 1: don't hesitate to reach out. Yeah, So I'll go ahead

944
00:51:58,560 --> 00:52:00,200
Speaker 1: and make sure to link all that stuff in in

945
00:52:00,239 --> 00:52:02,360
Speaker 1: the show notes so that everybody can can find that.

946
00:52:02,480 --> 00:52:05,360
Speaker 1: You know, you can follow ZAC online and uh and

947
00:52:05,400 --> 00:52:06,799
Speaker 1: get a hold of them if if you want to

948
00:52:07,200 --> 00:52:09,560
Speaker 1: um and yeah otherwise, go ahead and leave your comments

949
00:52:09,560 --> 00:52:12,000
Speaker 1: down below. Will answer those questions and we'll do another

950
00:52:12,000 --> 00:52:14,200
Speaker 1: follow up sometime in the future. So thanks so much, Chach.