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Speaker 1: Hello, and welcome to another episode of the All Thoughts podcast.

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Speaker 1: I'm Tracy Allaway and I'm Joe. WI isn't all so, Joe?

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Speaker 1: It's been um. I mean, I think it's been a

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Speaker 1: kind of a tough couple of weeks for crypto. We

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Speaker 1: had the price of bitcoin go down below thirty thousand

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Speaker 1: UM at one point, but it's shot up since then.

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Speaker 1: I think it's closer to But on the other hand,

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Speaker 1: we had some interesting developments around the sort of crypto ecosystem,

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Speaker 1: around the market structure aspect of crypto. Well, it's interesting

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Speaker 1: because all right, we did get this like sort of

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Speaker 1: bare market, and I don't know if it's still in one,

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Speaker 1: because as you mentioned, it's bounced back. But unlike say,

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Speaker 1: you know, the sell off in or at the end

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Speaker 1: of Seen, it doesn't feel like there's any slowdown at

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Speaker 1: all in the pace of investment into this space, Like

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Speaker 1: where is at the end of you know, is like

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Speaker 1: all right, well, maybe this whole thing was a bubble

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Speaker 1: or a fad. This time it feels like no one's

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Speaker 1: thinking that it's like full steam ahead on various business

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Speaker 1: plans and so forth, at least in these early months

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Speaker 1: since the peak back in April or May. Yes, indeed,

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Speaker 1: And as a sign of that investment interest, we just

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Speaker 1: had the crypto exchange f t X, which we've talked

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Speaker 1: about on the show before it completed. I think it

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Speaker 1: was a Series B fundraising of nine hundred million that

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Speaker 1: valued the company at eighteen billions. So to your point,

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Speaker 1: I mean, the crypto ecosystem itself is clearly being valued

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Speaker 1: by investors as a future investment. Eighteen billions pretty big, right,

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Speaker 1: And of course f t X is the exchange we

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Speaker 1: talked to the to the founder, it was not that

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Speaker 1: long ago. I think it was either maybe like March

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Speaker 1: or April, and it feels like his star, his significance

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Speaker 1: within crypto has only probably like gone up like ten

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Speaker 1: x uh since like literally like the last three or

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Speaker 1: four months. Yeah, I think that's fair. So we're gonna

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Speaker 1: be talking to the f t X founder of Sam

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Speaker 1: Bankman Freed again on this episode, but we wanted to

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Speaker 1: do it a little bit differently this time, so we've

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Speaker 1: also brought on Bloomberg columnist Matt Levine, one of the best,

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Speaker 1: probably the best financial writer out there if we're being honest,

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Speaker 1: and he's going to join the conversation and we're just

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Speaker 1: going to talk about what ft X has been doing

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Speaker 1: and where it might go from here. Okay, wait, let's

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Speaker 1: do it all right, Uh, Sam and Matt, thank you

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Speaker 1: so much for coming on the show. Yeah, thanks for

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Speaker 1: having us, Thanks for having me. So, Sam, nine nine

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Speaker 1: million dollars is you know a lot of money. What

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Speaker 1: are you going to be doing with that? Yeah? So

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Speaker 1: it's um, I think we're looking good on the yacht front.

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Speaker 1: Don't need any more are but no I acquisitions to

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Speaker 1: serve the based answer? And you know, I think especially

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Speaker 1: as crypto starts to bleed into the rest of the

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Speaker 1: financial ecosystem, there's more and more points of overlap and

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Speaker 1: potential uh you know, potential collaboration could expand what you

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Speaker 1: mean by that? So what do you say crypto is

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Speaker 1: going to bleed more into the rest of the financial system?

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Speaker 1: How much of that is? Okay, we know that all

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Speaker 1: of the big banks or traditional brokerages they're like thinking

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Speaker 1: about like, well, what is their crypto play? How are

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Speaker 1: they going to get in on this action? How much

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Speaker 1: of it is? Are you talking about that? And every

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Speaker 1: day there's some new uh announcement from like a legacy

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Speaker 1: institution about something they're doing in the space, as opposed

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Speaker 1: to crypto itself encroaching on areas of business, lines of

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Speaker 1: business that we think of as traditional, where perhaps crypto

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Speaker 1: has a potential to userve some of that activity. It's

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Speaker 1: pride merrily so far been the former. And some of

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Speaker 1: this is the you know, sort of traditional highly regulated

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Speaker 1: financial institutions starting to get their toes in. Some of

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Speaker 1: this is also fintech, and so you know, I mean

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Speaker 1: when people say fintech, they're sort of an increasing chance

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Speaker 1: that they're referring to, you know, a crypto company over time.

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Speaker 1: But but even outside that, many of the definitely not

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Speaker 1: crypto companies in fintech, a very large fraction of those

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Speaker 1: are reaching out to you talk about like like and

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Speaker 1: imagine that you're some customer facing fintech business right and

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Speaker 1: you know you don't offer a bitcoin right now? Like, what,

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Speaker 1: what do you think the most frequent requests you get

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Speaker 1: from your customers is? But he's definitely to add bitcoin, Matt,

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Speaker 1: what's your understanding of what FTX actually does? Because you know,

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Speaker 1: Joe and I have spoken to sam Um a few

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Speaker 1: times before. Now I think we have a decent idea

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Speaker 1: but what's your impression of it? I like this question

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Speaker 1: exposing my ignorance question. Uh, my understanding is FTX is

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Speaker 1: like one of the biggest crypto exchanges and that it's

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Speaker 1: a particularly like uh, derivatives and structured product focus crypto exchange.

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Speaker 1: Is that like about right? Yeah, that's that's that's pretty good.

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Speaker 1: And you know, we're one of the newer exchange, certainly

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Speaker 1: the newest of the big ones, you know, started up

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Speaker 1: a couple of years ago, and more than half our

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Speaker 1: volume historic based been derivatives. I think the big reason

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Speaker 1: for that is basically, like they're the harder products to

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Speaker 1: get right. And you know, I think a lot of

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Speaker 1: the exchanges had serious issues when we started up and uh,

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Speaker 1: and those issues just became much more transparent and played

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Speaker 1: a much more devastating role when they tried to manage

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Speaker 1: you know, margin and drivetives than with SPOT products, which

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Speaker 1: are relatively simpler, although we do have a pretty wide

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Speaker 1: range of products on the site. So I mean, I

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Speaker 1: saw Sam someone made a joke on Twitter the other

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Speaker 1: day that like, you know, you weren't even like a

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Speaker 1: real player or active in the industry, like you know,

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Speaker 1: the last bullmarket. I mean I don't think that's totally true,

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Speaker 1: because on the last episode you told us the story

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Speaker 1: of the U the Japan Premium, which is an incredible

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Speaker 1: story and people should listen to it. But so much

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Speaker 1: of your success really has come like in the last

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Speaker 1: year or year and a half, and now f t

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Speaker 1: X is this huge thing. What do you explain, like,

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Speaker 1: what was it? It just sort of broadly and then

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Speaker 1: we'll get into like the details, but you sort of

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Speaker 1: mentioned some of the operational aspects of running a derivatives

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Speaker 1: exchange versus just a pure spot exchange. You know, in

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Speaker 1: the US people really know coin based globally people really

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Speaker 1: know buyinance. But what was it in your view that

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Speaker 1: you know, you have this thing, Okay, we're going to

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Speaker 1: create a product for traders. What was it that f

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Speaker 1: t X had that really allowed it to just explode

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Speaker 1: seemingly out of nowhere, uh, in the last year or so. Yeah,

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Speaker 1: And I think a lot of these things were things

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Speaker 1: you might even just assume with TRUF all exchanges things

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Speaker 1: for two, but that isn't And so one example is

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Speaker 1: when you look at margining, the norm in crypto was

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Speaker 1: you isolate everything, And what that means is if you

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Speaker 1: want to go trade if against USD futures, you have

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Speaker 1: to go like by Spot etherory and move it into

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Speaker 1: your USD futures wallet and use that as margin. Trade

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Speaker 1: your each features. If you then want to trade you know,

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Speaker 1: Bitcoin against US Spot, you have to go move that

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Speaker 1: e thout sell it for US or Bitcoin, move that

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Speaker 1: into your US you know Bitcoin Spot margin wallet and

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Speaker 1: use this collateral there. You had a margin you know,

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Speaker 1: managing literally hundreds of wallets on one venue, each of

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Speaker 1: which basically only supports one product um as this massive

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Speaker 1: minigame to manage to be liquidated on any one of

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Speaker 1: them independent if your collateral on others, you have no

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Speaker 1: flexibility on margining. The liquidation engines were not up to

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Speaker 1: the task, Like they're losing millions of dollars per day

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Speaker 1: of customer assets um to failing to liquid eight in time.

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Speaker 1: You know, there was just like match engines fault fell

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Speaker 1: over whenever markets got volatile, and so it's just like

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Speaker 1: all over the place that was like not a great

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Speaker 1: customer experience, and you know in sort of like really

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Speaker 1: significant ways. So this is like raised the question that

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Speaker 1: I have. So you come from a sort of like

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Speaker 1: high tech, traditional finance background, you're a chain street and

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Speaker 1: like one story you could tell here is like this

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Speaker 1: is about like applying sort of best practices from traditional

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Speaker 1: finance to like the wild West of crypto exchanges, where well,

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Speaker 1: portfolio margining is a totally well understood thing, but to

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Speaker 1: portfolio margining for crypto products. Um, But I'm curious, Like

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Speaker 1: I've always thought that like a lot of the appeal

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Speaker 1: of crypto is like all these people from like backgrounds

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Speaker 1: like yours, who like work in like the coal mines

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Speaker 1: of market structure and whatever and have like a list

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Speaker 1: of things or like this is this like traditional financial

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Speaker 1: thing is stupid and I could do it better if

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Speaker 1: I were designing the system from scratch. And you kind

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Speaker 1: of went and designed the system from scratch, right like

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Speaker 1: you started like a big exchange in a in a

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Speaker 1: product universe that is not really beholden to any traditional

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Speaker 1: rules or you know, customs. And I'm wondering, like are

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Speaker 1: there places where you were like like what we do

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Speaker 1: here at chanceer it or what we do and like,

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Speaker 1: you know, the stock market is really dumb. Like if

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Speaker 1: I were doing it, I'd do it differently where you

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Speaker 1: actually went and did that at f t X totally,

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Speaker 1: and I do think the answer is really sort if

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Speaker 1: you look at each place and you're like, who's doing

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Speaker 1: it right? You know, it's sort of like the crypto norm, correct,

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Speaker 1: the crypto exchanged norm, or like the traditional exchanged harm

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Speaker 1: and kind of sometimes it was one and sometimes it

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Speaker 1: was the other. So like some examples of places where

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Speaker 1: I think crypto has like at least an argument for

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Speaker 1: doing it right now, I personally think they probably are.

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Speaker 1: One of these is moving funds around. This is obviously

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Speaker 1: one of the first things that comes up with crypto,

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Speaker 1: But I at least sort of just assumed it was

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Speaker 1: easy to get your money wherever you wanted before I'd

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Speaker 1: ever tried to do that. But as soon as I

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Speaker 1: I tried to ever move money around, I realized how

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Speaker 1: difficult it was. Anyone who sent an int like an

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Speaker 1: international wire transfers immediately regrets having to do it. And

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Speaker 1: then you look at like a c H and credit

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Speaker 1: card payments to take months to finalize, and so either

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Speaker 1: these all these limits huge, he's on them. There's so

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Speaker 1: many roadblocks in the system because like there's two months

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Speaker 1: of fraud risk there, and so just doing things like

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Speaker 1: funding your account or what do you what if that

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Speaker 1: even needs to find your account on traditional exchanges is

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Speaker 1: like very messy and can take a while, whereas on crypto,

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Speaker 1: like the goals to make it as clean as possible,

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Speaker 1: and when you're sending cryptocurrencies in that's obviously like basically

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Speaker 1: instant on sort of you know, the wire transferred time scale.

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Speaker 1: But even with with fiat sort the emphasis is like anyone,

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Speaker 1: whether you're you have two hundred dollars to your name

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Speaker 1: or you're the world's second biggest d F t F,

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Speaker 1: you can go to the website, submit kyc infote, create

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Speaker 1: an account directly with the exchange, and then there's like

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Speaker 1: the deposit button and it has like as many options

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Speaker 1: as possible for how you can fund your account. And

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Speaker 1: so it's just like a massively easier process. And you know,

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Speaker 1: when when you're serve in crypto, what you quickly realize

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Speaker 1: like you never want to send FIAT that's like the

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Speaker 1: hardest thing to do, and like everything gets settled with

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Speaker 1: stable points if if you can get away with it.

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Speaker 1: Another thing I'll bring up is it's different nature of

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Speaker 1: the products. So when you think of what he's like

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Speaker 1: Nazi or cem me or something like they're mostly matching engines,

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Speaker 1: like you know, they sort of match bids and offers

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Speaker 1: from like a few institutions against each other, but they

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Speaker 1: don't do anything else in the trade process. Right, There's

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Speaker 1: like separate companies that do like custody clearing, m ok

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Speaker 1: I see customer on boarding, branding, advertising, mobile app, website

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Speaker 1: a p I. All of those are like different companies,

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Speaker 1: and you end up with like, you know, ten companies

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Speaker 1: stacked together. And first of all, that means you have

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Speaker 1: ten rounds of fees stacked together on trades. But but

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Speaker 1: second of all, it means you if this really fractured

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Speaker 1: experience where you know, access to the actual ultimate liquidity

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Speaker 1: and order books is basically restricted to like a very

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Speaker 1: very small number of institutional trading firms going through some

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Speaker 1: prime broker, and everyone else sort of has this like

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Speaker 1: very abstracted away experience going through you know, two peef

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Speaker 1: off firms in a dark pool and a broker. You know,

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Speaker 1: so somewhere in the middle. In crypto exchanges are full

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Speaker 1: stack products and so everything I mentioned from you know,

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Speaker 1: rereading an account, submitting m l k C information, depositing funds,

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Speaker 1: um using wold lack gooey website submitting in order, all

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Speaker 1: those go straight through the exchange. And so you have

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Speaker 1: like small retail customers and giant HFD firms all having

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Speaker 1: the same exact access to the ultimate you know, order

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Speaker 1: books and and and system. And I think that creates

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Speaker 1: in some cases and much much more streamlined and frankly

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Speaker 1: fair experience. So can I ask just on the margining idea.

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Speaker 1: So one of the things you did, um, I think

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Speaker 1: it was just in the past week er two, but

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Speaker 1: you changed, um the amount of leverage that you allow

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Speaker 1: on the platform. So I think the maximum people can

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Speaker 1: do now is twenty times, which seems like a lot

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Speaker 1: to me still, but like it's a vast reduction from

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Speaker 1: what it was. Uh, walk us through the thought process

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Speaker 1: on that, And would you consider changing the margin requirements

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Speaker 1: as well? Yeah, so I guess maybe on your last point,

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Speaker 1: we talked about changing that the marginal requirements, and when

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Speaker 1: we talked about margin leverage, we usually think of them

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Speaker 1: is basically the same thing, like one is just one

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Speaker 1: divided by the other one. And yes there's like initial

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Speaker 1: versus maintenance, like how big of a position you're allowed

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Speaker 1: to put on versus at what point your account actually

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Speaker 1: starts getting liquidated. But but this this sort of affected

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Speaker 1: both of those um and so you know you have

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Speaker 1: to post five percent margin now on all positions, and

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Speaker 1: at least in many cases much more than that I

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Speaker 1: would deserve, equivalent to saying twenty leverage. The thought process

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Speaker 1: behind it, the first thing is that it's actually not

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Speaker 1: that big of a change for the site. Less than

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Speaker 1: one percent of the volume was trading with leverage higher

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Speaker 1: than that before. And the reason is that basically your

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Speaker 1: margin requirements go up as your position size goes up.

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Speaker 1: So if you want to put on a big position,

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Speaker 1: you need to post way wey weay more than that

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Speaker 1: collateral anyway, and you're only able to put on really

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Speaker 1: tiny positions with very high leverage. And so it's served

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Speaker 1: by definition, not where most of the volume or open

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Speaker 1: interest or users were coming from. And so so it

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Speaker 1: wasn't like a big part of the exchange. It wasn't

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Speaker 1: super relevant to to us or to most of our

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Speaker 1: users or their experience. It's also not super economically like

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Speaker 1: useful frankly, like when when you talk about you know,

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Speaker 1: hedging something or having on some spread or or one

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Speaker 1: of the many reasons that you might want to do

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Speaker 1: a margin trade. If you get down to one collateral left,

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Speaker 1: you can't really use that to hedge something because you

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Speaker 1: can get liquidated in like a print, like in like

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Speaker 1: fifteen seconds. You know, markets could move enough that you're

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Speaker 1: out of margin, and so it doesn't make sense for

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Speaker 1: any like long or even medium term position that you're

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Speaker 1: planning to hold for any reason. You're sort of like

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Speaker 1: almost definitely opening yourself up to serious liquidation risks if

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Speaker 1: you get anywhere close to that amount of leverage. And

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Speaker 1: it's like most of the things that I think, like

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Speaker 1: frankly could justify as like the more economically useful parts

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Speaker 1: like don't require high like super high leverage anyway. And

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Speaker 1: then the last species frankly, like it's something that a

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Speaker 1: lot of people look on a scans like you know

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Speaker 1: when when you talk about I mean reporters, but regulators

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Speaker 1: as well, like not that they're like specific regulations around

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Speaker 1: this in most jurisdictions, but like there probably will be eventually,

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Speaker 1: and and it's sort of like clearly the direction of

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Speaker 1: the world's going in and so start of combining all

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Speaker 1: those together, like it wasn't important important part of the

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Speaker 1: site wasn't super healthy part of the site necessarily. It

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Speaker 1: was like a part that was going to start receiving

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Speaker 1: a lot of negative attention, and it just seemed like

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Speaker 1: it was like it was time to get rid of it.

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Speaker 1: Talk to us a little bit more about the technical

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Speaker 1: aspects of building um a system in which there was

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Speaker 1: you know, as you describe it, the one wallet where

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Speaker 1: everything is you know, cross margin, and so you don't have, okay,

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Speaker 1: your bitcoin futures wallet and your future's wallet and so

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Speaker 1: forth two things. So like how hard is that to build?

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Speaker 1: But also we know that like with a lot of

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Speaker 1: the legacy or it's weird to talk about legacy, the

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Speaker 1: legacy crypto exchanges, they tend to go down a lot

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Speaker 1: during periods of high volatility, which is a source of frustration,

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Speaker 1: and we see it We've seen with coin based for example,

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Speaker 1: where everyone's starting to like slam into one thing and

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Speaker 1: suddenly social media has lit up. You like to point out,

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Speaker 1: like on Twitter it's like, well, ft X another another

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Speaker 1: day of a hundred percent up time or whatever it is.

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Speaker 1: How much are those things connected? This sort of like

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Speaker 1: the difficult stress of legacy liquidation books versus and just

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Speaker 1: keeping the site going up. Yeah, So the thing that

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Speaker 1: really causes the stress there is actually the interaction between

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Speaker 1: two different effects, one of which is cross margining. One

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Speaker 1: advantage of isolated eargining, and one reason that some exchanges

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Speaker 1: do this is you can completely parallelize different products, right.

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Speaker 1: You can just like completely separately, say like all right,

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Speaker 1: there's our bitcoin EOS market, here's our eight futures. They

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Speaker 1: have nothing to do with each other, Like, are none

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Speaker 1: of our systems need to look at the other one.

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Speaker 1: You have completely parallel margin checks, risk checks, order books,

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Speaker 1: and it's easy to rent another server, Like if you

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Speaker 1: could scale up your business just by buying ton of servers,

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Speaker 1: that is the easiest thing to do, and like we

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Speaker 1: would do that in a second. The problem that you

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Speaker 1: run into is that doesn't increase increase like the clock

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Speaker 1: speed of any one process. And so whenever you have

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Speaker 1: these bottlenecking things where everything needs to feed through one process,

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Speaker 1: like buying more computers doesn't help because there's just the

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Speaker 1: one computer that's computing that one bottle necking thing. And

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Speaker 1: the worry with cross margining is if I send an

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Speaker 1: order in an bitcoin US order book, that immediately affects

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Speaker 1: the amount of margin that I have available for an

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Speaker 1: ethereum futures position, and so you can't treat them as

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Speaker 1: completely separable from each other, and you sort of have

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Speaker 1: in the end this one process, which is keeping track

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Speaker 1: of the master amount of margin and collateral that each

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Speaker 1: account has available, and that thing has to like every

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Speaker 1: single order on every order world has to feed through

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Speaker 1: that process, and all of a sudden paralyzation is way harder.

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Speaker 1: And that means that your risk of that process falling

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Speaker 1: over when things get busy, and if that process gets

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Speaker 1: bottle lets, you can't accept orders in any order book

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Speaker 1: because you don't know if the person has enough margin corps.

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Speaker 1: So that that's sort of like the fundamental tension that

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Speaker 1: you that you get too quickly when you frost margin,

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Speaker 1: and inherent in that is like then you say, well, okay,

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Speaker 1: how about traditional exchanges, like don't they cross margin? And

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Speaker 1: the real answer is that it gets back to a

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Speaker 1: previous point. In traditional finance, the exchanges aren't the primary

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Speaker 1: risk check. The exchanges aren't like analyzing correlations between different

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Speaker 1: assets and someone's portfolio. Generally, the exchanges are just processing

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Speaker 1: the orders. And then you have things like prime brokers

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Speaker 1: who are the actual risk check engines. They're not doing

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Speaker 1: it in real time really, at least not like tick

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Speaker 1: by tick or order by order. They don't have to

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Speaker 1: be as high throughput. They're just sort of like periodically

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Speaker 1: checking on people's portfolios. And then you say, okay, well,

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Speaker 1: why can't we take it out of this critical process

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Speaker 1: and just check it every hour or something. And the

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Speaker 1: reason is, well, what if they went bankrupt in that hour? Right,

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Speaker 1: which you now get to surface other piece, which is

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Speaker 1: the fact that we allow everyone access to the site,

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Speaker 1: including people who aren't like, you know, one of the

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Speaker 1: five biggest trading firms in the world that you definitely

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Speaker 1: have legal recourse over and they have tons of assets

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Speaker 1: outside of your exchange that you can claim if they

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Speaker 1: want net negative Like that's not how it works in

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Speaker 1: crypt and crypto. We have everyone, and so if any

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Speaker 1: account goes net negative value, like realistically speaking, we might

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Speaker 1: never be able to like proclaim that, and and you know,

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Speaker 1: we just end up eating that. And so we have

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Speaker 1: to be real time monitoring the risk of all of

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Speaker 1: the used years and and that's sort of like one

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Speaker 1: of the easier parts to accidentally get sort of bottle

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Speaker 1: necked on. Can you talk about that from like a

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Speaker 1: perspective of your capital So, like, you know, exchanges are

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Speaker 1: sort of notably thinly like in the in like the

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Speaker 1: traditional finance where all the exchanges are not like particularly

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Speaker 1: capitalized because they're not particularly capital intensive. Clearing houses have

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Speaker 1: like weird capital you know, positions and drawing rights. And

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Speaker 1: then prime brokers are giant banks who are who are

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Speaker 1: like very heavily capitalized. Um, Like for you, like, do

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Speaker 1: you have billions and billions of dollars to cover customer

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Speaker 1: losses or is it more like you're a sort of

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Speaker 1: technological situation where you can you're confident you can blow

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Speaker 1: people out fast enough that like customer losses are not

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Speaker 1: your problem? Or am I just thinking about it round? No,

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Speaker 1: that you're thinking about exactly right? Um. And that's a

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Speaker 1: really good question to ask. And different exchanges come to

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Speaker 1: different answers that questions. Let me give you a little

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Speaker 1: bit of a palette of like how one could answer it.

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Speaker 1: One answer, which used to be very popular is that's

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Speaker 1: not our problem, that's are you years problem? And you

397
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Speaker 1: might say, what you mean if users negative, you can't

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Speaker 1: get funds from them? Twix respond sure, but that means

399
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Speaker 1: some other users positive, and maybe you consider of see

400
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Speaker 1: where that's going. You know, there are these things called

401
00:21:11,520 --> 00:21:15,120
Speaker 1: the positive user doesn't isn't actually positive exactly right, it's

402
00:21:15,240 --> 00:21:18,240
Speaker 1: the clawbacks is sort of like the word that people

403
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Speaker 1: used for that. And there are exchanges where like each

404
00:21:21,320 --> 00:21:23,399
Speaker 1: week they say, like, congrats, you did good trading. You

405
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Speaker 1: get paid eighty six point two percent of your penil

406
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Speaker 1: this week. You know, the other thirteen point went to

407
00:21:28,480 --> 00:21:31,040
Speaker 1: bail people out, and and it just happened week after

408
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Speaker 1: week after week. There's millions off per day of losses

409
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Speaker 1: of customers to that, which is not how you want

410
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Speaker 1: to end up, right. That's sort of like breaking this

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Speaker 1: like seemingly really inherent inviolable property of a future, which

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Speaker 1: is that if you buy a bitcoin future what like

413
00:21:47,040 --> 00:21:49,159
Speaker 1: whatever something, interest rates, something something. But when all of

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Speaker 1: a sudden done in the end, you have a bitcoin

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Speaker 1: right have like bitcoint goes up to make it finically

416
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Speaker 1: goes up ten thousand dollars, you make town thous dollars

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Speaker 1: if you're like holding its expiration or what effort. But

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Speaker 1: all of a sudden, if you're on a getting paid

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00:22:00,600 --> 00:22:04,520
Speaker 1: back your PNL, you don't really quite have a bigcoin.

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Speaker 1: You have something that's kind of like a bigcoin, but

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Speaker 1: maybe it's only most of a bigcoin. We'll see. So

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Speaker 1: that's like not a good answer, but that is an answer,

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Speaker 1: and that is what what some exchanges said. Other exchanges

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Speaker 1: give sort of the worst dancer. That's not a good answer.

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Speaker 1: Was not the worst answer. The worst answer is going bankrupt,

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Speaker 1: and that's not what we want to see. But you know,

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Speaker 1: there have been some exchanges blow out in crypto, and

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Speaker 1: especially the smaller ones, which gets to your point of

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Speaker 1: like how much capital is actually backing these exchanges. One

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Speaker 1: of the most dangerous things about using a dinky exchange.

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Speaker 1: There's there are two scary things. First of all, they

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Speaker 1: probably don't have like very sophisticated tack, so like the

433
00:22:38,720 --> 00:22:41,040
Speaker 1: hacking risk is way higher. But second of all, they

434
00:22:41,160 --> 00:22:44,000
Speaker 1: probably don't have a billion dollars of capital, and so

435
00:22:44,200 --> 00:22:46,240
Speaker 1: if there is a loss, like they don't have anything

436
00:22:46,280 --> 00:22:48,879
Speaker 1: backing back, you know, like they they they have you know,

437
00:22:48,920 --> 00:22:50,959
Speaker 1: two million dollars back in they if they lose five

438
00:22:51,000 --> 00:22:54,440
Speaker 1: million dollars and customers lost three. Okay, So so that's

439
00:22:54,440 --> 00:22:56,400
Speaker 1: sort of like another bad answer, but it's the answer

440
00:22:56,440 --> 00:22:58,760
Speaker 1: you've seen on on some of the smaller venues, and

441
00:22:58,840 --> 00:23:01,679
Speaker 1: then you get sort of like about the biggest venues,

442
00:23:01,760 --> 00:23:03,480
Speaker 1: and the answer to your question is really, yeah, they

443
00:23:03,520 --> 00:23:05,560
Speaker 1: do have a lot of capital backing. Like if you

444
00:23:05,600 --> 00:23:08,800
Speaker 1: look at the actual effective amount of capital backing the

445
00:23:08,920 --> 00:23:12,119
Speaker 1: books on on the largest exchanges, it is and the

446
00:23:12,160 --> 00:23:15,240
Speaker 1: billions and you know, obviously we just raised nine hundred

447
00:23:15,359 --> 00:23:17,399
Speaker 1: or so, but you know, we we we had a

448
00:23:17,440 --> 00:23:20,399
Speaker 1: bunch of profits before that. And then on top of that,

449
00:23:20,560 --> 00:23:22,800
Speaker 1: there's sort of you know, effectively the equity value of

450
00:23:22,840 --> 00:23:26,800
Speaker 1: the exchanges, which are you know, well should be implicitly

451
00:23:26,840 --> 00:23:29,720
Speaker 1: backing these you know, for sort of people exchanging that

452
00:23:29,800 --> 00:23:31,600
Speaker 1: if you have a billion dollar loss, you can like

453
00:23:31,800 --> 00:23:33,679
Speaker 1: go ris a billion dollars and people are like, well,

454
00:23:33,720 --> 00:23:36,160
Speaker 1: you know, to have equity. Yeah, And so the answer

455
00:23:36,280 --> 00:23:38,639
Speaker 1: is for the biggest exchanges, yeah, there is effectively a

456
00:23:38,720 --> 00:23:41,200
Speaker 1: lot backing it. But but once you start going down

457
00:23:41,320 --> 00:23:43,160
Speaker 1: in the pegging or or to exchange where you don't

458
00:23:43,200 --> 00:23:45,400
Speaker 1: trust that they wouldn't do that, that they would kind

459
00:23:45,400 --> 00:23:48,640
Speaker 1: of go do whatever it took to make their users whole. Yeah,

460
00:23:48,680 --> 00:23:51,320
Speaker 1: there's real risk there that you know, if their liquidation

461
00:23:51,400 --> 00:23:54,720
Speaker 1: engine is enough to task neither world their users you know,

462
00:23:55,200 --> 00:23:58,280
Speaker 1: b and if you're like a big exchange with a

463
00:23:58,320 --> 00:24:01,280
Speaker 1: lot of capital, like the empirically, how good is the

464
00:24:01,400 --> 00:24:04,600
Speaker 1: risk management? Like do you guys regularly have like bloods

465
00:24:04,720 --> 00:24:07,240
Speaker 1: that you don't uh that you're not made hole? It's

466
00:24:07,240 --> 00:24:10,119
Speaker 1: a good question. So we um, we we put a

467
00:24:10,240 --> 00:24:13,359
Speaker 1: bunch of thirst engine we don't have the issues like

468
00:24:13,440 --> 00:24:16,080
Speaker 1: we've never had a day I think where there were

469
00:24:16,400 --> 00:24:18,840
Speaker 1: there's more money that we lost in blowouts too, revenue

470
00:24:18,880 --> 00:24:22,119
Speaker 1: that we made just from trading fees. So and on

471
00:24:22,240 --> 00:24:25,560
Speaker 1: most days it's effectively zero dollars cost. So this is

472
00:24:25,600 --> 00:24:27,520
Speaker 1: not like a big deal for for us. I mean,

473
00:24:27,600 --> 00:24:29,879
Speaker 1: it's a big deal think about, but like economically it

474
00:24:29,920 --> 00:24:31,639
Speaker 1: has been a big cost to us. So you're not

475
00:24:31,720 --> 00:24:36,280
Speaker 1: doing like a leverage on big positions, is right, And

476
00:24:36,359 --> 00:24:38,159
Speaker 1: that's that's why it gets down to exactly right, like

477
00:24:38,480 --> 00:24:41,119
Speaker 1: are your you are are your parameter is good and

478
00:24:41,160 --> 00:24:43,560
Speaker 1: reasonably as their liquidation into like reasonable in real time

479
00:24:43,600 --> 00:24:45,840
Speaker 1: and stuff. In some cases the answer that has just

480
00:24:46,119 --> 00:24:48,960
Speaker 1: effectively been no. And and you know we've we've stared

481
00:24:49,000 --> 00:24:52,440
Speaker 1: pretty hard to keep it like pretty effective. But you know,

482
00:24:52,560 --> 00:24:54,959
Speaker 1: when you look at the biggest blowouts historically, especially back

483
00:24:55,000 --> 00:24:57,639
Speaker 1: in like is the kind of thing you like you

484
00:24:57,680 --> 00:25:00,640
Speaker 1: would just look at that and be like that doesn't work, right, Sam,

485
00:25:00,760 --> 00:25:02,639
Speaker 1: and be like, yeah, you're right, that doesn't work. Like

486
00:25:02,880 --> 00:25:04,520
Speaker 1: he's just like, yeah, fifty to one leverage on a

487
00:25:04,560 --> 00:25:07,720
Speaker 1: three hundred million dollar bitcoin position and just like Okay,

488
00:25:07,760 --> 00:25:10,720
Speaker 1: that's interesting until it is exactly It's like, can you

489
00:25:10,800 --> 00:25:14,760
Speaker 1: liquidate like three million dollars a bitcoin consistently with less

490
00:25:14,840 --> 00:25:18,000
Speaker 1: than two percent impact plus slippage plus movement during the

491
00:25:18,040 --> 00:25:21,119
Speaker 1: time it takes you that Like, no, you can't. Can

492
00:25:21,160 --> 00:25:22,920
Speaker 1: I ask you about? I don't. I don't really know

493
00:25:23,240 --> 00:25:26,359
Speaker 1: the phrase liquidation engine, but like, um, like my my

494
00:25:26,480 --> 00:25:29,520
Speaker 1: understanding is that like there's like a stereotype in like

495
00:25:29,920 --> 00:25:33,040
Speaker 1: the crypto world where when people get blown out of

496
00:25:33,080 --> 00:25:36,280
Speaker 1: margin positions, they it is done as like sloppily as

497
00:25:36,400 --> 00:25:39,879
Speaker 1: eggs can be imagined, and like prices like move right

498
00:25:40,080 --> 00:25:42,920
Speaker 1: jerkily and mechanically in a way that like you know,

499
00:25:43,119 --> 00:25:45,040
Speaker 1: like I'm just I've been thinking about you know where

500
00:25:45,040 --> 00:25:48,080
Speaker 1: recording this on the day of the Archagos report coming

501
00:25:48,119 --> 00:25:51,240
Speaker 1: at where like you know, in traditional finance, like when

502
00:25:51,280 --> 00:25:54,440
Speaker 1: a big position gets blown out, like they don't necessarily

503
00:25:54,480 --> 00:25:55,879
Speaker 1: do a good job of it. But they sort of

504
00:25:55,960 --> 00:25:58,280
Speaker 1: sit down and think, what is the way to liquidate

505
00:25:58,400 --> 00:26:01,639
Speaker 1: this position with minimal and back to the bank, Whereas,

506
00:26:01,680 --> 00:26:05,440
Speaker 1: like my understanding is that in crypto exchanges it's all automated,

507
00:26:05,480 --> 00:26:08,480
Speaker 1: and often automated in a sort of like predictable and

508
00:26:08,800 --> 00:26:11,200
Speaker 1: dangerous way. Yeah, it's been getting a little bit better

509
00:26:11,280 --> 00:26:13,679
Speaker 1: over time. It's not great, i would say, for us

510
00:26:13,720 --> 00:26:15,879
Speaker 1: to space, but it used to be terrible. So let

511
00:26:15,920 --> 00:26:18,119
Speaker 1: me tell you some horror stories here which are like,

512
00:26:18,760 --> 00:26:21,240
Speaker 1: here's like one really bad example that we did see,

513
00:26:21,640 --> 00:26:26,520
Speaker 1: you know, back in like when when things were really messy,

514
00:26:27,000 --> 00:26:29,080
Speaker 1: someone had, you know, a two hundred million dollar position

515
00:26:29,119 --> 00:26:32,359
Speaker 1: in bitcoin futures. First of all, it very very strongly

516
00:26:32,400 --> 00:26:34,520
Speaker 1: seemed like there's a human they're clicking, and that human

517
00:26:34,640 --> 00:26:37,520
Speaker 1: was sometimes to sleep, and and so maybe markets moved

518
00:26:37,560 --> 00:26:39,840
Speaker 1: while that human was asleep, and then the account was

519
00:26:39,880 --> 00:26:41,919
Speaker 1: net negative by the time the human weight woke up.

520
00:26:41,960 --> 00:26:44,600
Speaker 1: So that's like not a good start. And then you know,

521
00:26:44,720 --> 00:26:48,040
Speaker 1: you see this position is obviously underwater, and and and

522
00:26:48,119 --> 00:26:50,560
Speaker 1: what they would do, you know, let's say two percent underwater,

523
00:26:51,680 --> 00:26:54,359
Speaker 1: is you know, they place an offer for two hundred

524
00:26:54,400 --> 00:26:57,840
Speaker 1: million dollars of bitcoin futures two percent behind the b BO,

525
00:26:58,640 --> 00:27:00,480
Speaker 1: right and just sit there. And and of course that

526
00:27:00,560 --> 00:27:03,560
Speaker 1: was at the bankruptcy price, like hoping someone would lift

527
00:27:03,600 --> 00:27:07,320
Speaker 1: through the book and buy two million, two million dollar offer.

528
00:27:07,880 --> 00:27:10,080
Speaker 1: Obviously that's not what happens, right. What happens is everyone

529
00:27:10,119 --> 00:27:15,040
Speaker 1: sees the offer and things just like crash more, right,

530
00:27:15,480 --> 00:27:17,760
Speaker 1: and it just gets like worse and worse. You know that.

531
00:27:17,880 --> 00:27:20,040
Speaker 1: That's like an example of not a good liquidation engine,

532
00:27:20,160 --> 00:27:23,440
Speaker 1: so to speak. Yeah, although honestly that's better, Like I

533
00:27:23,600 --> 00:27:25,960
Speaker 1: sort of expected it was like if you hit some trigger,

534
00:27:26,080 --> 00:27:28,240
Speaker 1: like some automated thing just puts in market orders to

535
00:27:28,280 --> 00:27:30,880
Speaker 1: sell the position. So we've seen that as well, which

536
00:27:30,920 --> 00:27:33,280
Speaker 1: is sort of the opposite extreme, and it's sort of

537
00:27:33,359 --> 00:27:37,200
Speaker 1: like different exchanges that did different pieces of this, like yeah,

538
00:27:37,280 --> 00:27:39,840
Speaker 1: and I basically think like both those extremes are bad, right,

539
00:27:40,359 --> 00:27:42,280
Speaker 1: and the market order thing goes about as poorly as

540
00:27:42,280 --> 00:27:44,800
Speaker 1: you would expect, you know, So where have things been

541
00:27:44,840 --> 00:27:47,320
Speaker 1: moving over time? Like what's sort of like the reasonable system? Well,

542
00:27:47,359 --> 00:27:48,879
Speaker 1: I don't know, but it's sort of like I think

543
00:27:48,920 --> 00:27:50,720
Speaker 1: you would like if you just like had ten minutes

544
00:27:50,760 --> 00:27:53,640
Speaker 1: write down something like better than either of those, which

545
00:27:53,720 --> 00:27:56,320
Speaker 1: is like kind of a decent proxy um, which is

546
00:27:56,359 --> 00:27:59,160
Speaker 1: basically like, you know, what do we do so whatever,

547
00:27:59,240 --> 00:28:01,159
Speaker 1: first of all offices that we cut off opening your position,

548
00:28:01,680 --> 00:28:04,080
Speaker 1: then if your accounted like it's further you know down

549
00:28:04,240 --> 00:28:06,159
Speaker 1: in collateral, the first thing we do is we just

550
00:28:06,200 --> 00:28:08,440
Speaker 1: start sending orders on behalf of your account closed down

551
00:28:08,800 --> 00:28:12,520
Speaker 1: the position. It's done in an automated way. It's done

552
00:28:12,600 --> 00:28:15,800
Speaker 1: like bit by bit, like basically twalps it. And you know,

553
00:28:15,880 --> 00:28:18,560
Speaker 1: we keep it to like a relatively low fraction of

554
00:28:19,680 --> 00:28:22,560
Speaker 1: of of of underlying volume of the asset, so like

555
00:28:22,640 --> 00:28:23,920
Speaker 1: we don't want to be in position where like the

556
00:28:24,000 --> 00:28:27,879
Speaker 1: liquidation engine global volume, because then then it's just like

557
00:28:28,040 --> 00:28:30,160
Speaker 1: that like the market doesn't have time to get liquidity

558
00:28:30,240 --> 00:28:32,680
Speaker 1: for that um. And and that's also sort of like

559
00:28:32,760 --> 00:28:34,360
Speaker 1: one way to think of what happens if you send

560
00:28:34,400 --> 00:28:37,520
Speaker 1: to market orders like volume for that two second period.

561
00:28:38,000 --> 00:28:40,680
Speaker 1: You know, that just overwhelms order books and it basically

562
00:28:40,720 --> 00:28:42,600
Speaker 1: sort of like chip away with that and and and

563
00:28:42,680 --> 00:28:45,480
Speaker 1: hopefully that works or it's just like markets recover or

564
00:28:45,520 --> 00:28:47,680
Speaker 1: go down depending on which direction their position was in.

565
00:28:47,760 --> 00:28:50,480
Speaker 1: And you know, but before action, most their position has

566
00:28:50,480 --> 00:28:53,320
Speaker 1: been liquidated, like we no longer have to liquidated and

567
00:28:53,480 --> 00:28:55,920
Speaker 1: and then we stopped. If that doesn't work, like things

568
00:28:56,000 --> 00:28:58,800
Speaker 1: just keep moving against a position, and like the location

569
00:28:58,840 --> 00:29:00,520
Speaker 1: engine is like going as fast as is willing to

570
00:29:00,600 --> 00:29:03,280
Speaker 1: go in terms of like fraction of volume and and

571
00:29:03,480 --> 00:29:06,080
Speaker 1: and like the digits closer and closure bankruptcy you have

572
00:29:06,640 --> 00:29:10,080
Speaker 1: it spells backs oppliquity prior system where basically we just

573
00:29:10,400 --> 00:29:13,400
Speaker 1: pass off their mating positions and value the account wholesale,

574
00:29:13,920 --> 00:29:17,120
Speaker 1: like paraded to a bunch of liquidity fighters who have

575
00:29:17,200 --> 00:29:20,720
Speaker 1: agreed to seven like basically forcibly take on you know,

576
00:29:20,840 --> 00:29:23,840
Speaker 1: liquidating accounts um and so that's what happens when it

577
00:29:23,880 --> 00:29:25,920
Speaker 1: looks like the you know, first stup liquidation and shoul

578
00:29:25,920 --> 00:29:27,920
Speaker 1: wouldn't get their time. And the thought is they're like,

579
00:29:28,040 --> 00:29:31,880
Speaker 1: you know, these market makers have well collateralized, well capitalized accounts,

580
00:29:31,960 --> 00:29:33,640
Speaker 1: and then they can figure out what they want to

581
00:29:33,680 --> 00:29:37,120
Speaker 1: do with those positions. It's not like perfect, but at

582
00:29:37,200 --> 00:29:38,920
Speaker 1: least sort of like you know, the goal is to

583
00:29:39,000 --> 00:29:41,680
Speaker 1: sort of like get rid of the unnecessary impact, right

584
00:29:42,280 --> 00:29:44,600
Speaker 1: and like you're you're gonna have impact whenever there's a

585
00:29:44,720 --> 00:29:46,880
Speaker 1: forced sale, but like at least you want to have

586
00:29:47,000 --> 00:29:49,240
Speaker 1: that impact be like the correct economic impact instead of

587
00:29:49,320 --> 00:29:51,600
Speaker 1: like five times that because it's done way too quickly

588
00:29:51,720 --> 00:29:55,040
Speaker 1: or something. Can I ask them about like order books

589
00:29:55,040 --> 00:29:58,000
Speaker 1: and market makers? Like what I'm interested in is an

590
00:29:58,040 --> 00:30:01,760
Speaker 1: intuition for sort of how liquid these crypto products are. Right, So,

591
00:30:01,840 --> 00:30:04,000
Speaker 1: like you have like sort of in US equity exchanges,

592
00:30:04,040 --> 00:30:07,000
Speaker 1: you have the stereotype of like there are you know,

593
00:30:07,280 --> 00:30:10,959
Speaker 1: high frequency electronic market makers. If you sell a lot

594
00:30:11,000 --> 00:30:12,760
Speaker 1: of stock, the stock will go down by like a

595
00:30:12,800 --> 00:30:16,240
Speaker 1: sort of predictable amount, and like people are willing to

596
00:30:16,560 --> 00:30:19,840
Speaker 1: step up to buy at these declining prices a certain amount, right,

597
00:30:19,880 --> 00:30:22,360
Speaker 1: Like there's there's like a certain amount of capital in

598
00:30:22,440 --> 00:30:24,320
Speaker 1: the in the order book, there's a certain amount of

599
00:30:24,440 --> 00:30:27,520
Speaker 1: like any time the market is open, someone is there

600
00:30:27,560 --> 00:30:30,400
Speaker 1: to buy. People complain that they're not as willing to

601
00:30:30,560 --> 00:30:32,760
Speaker 1: sort of take risk as like the old school banks were,

602
00:30:33,200 --> 00:30:36,120
Speaker 1: but like there's there's a sort of like predictable amount

603
00:30:36,200 --> 00:30:39,680
Speaker 1: of liquidity like in crypto markets in particularly because they're

604
00:30:39,680 --> 00:30:42,240
Speaker 1: so fragmented and there's so many products. Like if you

605
00:30:42,400 --> 00:30:44,720
Speaker 1: want to sell a bunch, like does the price good zero?

606
00:30:44,920 --> 00:30:47,600
Speaker 1: Like are there a lot of market makers with capital

607
00:30:47,640 --> 00:30:50,840
Speaker 1: who are sort of like committing capital everywhere and kind

608
00:30:50,880 --> 00:30:53,920
Speaker 1: of like trading quickly or is it a little bit

609
00:30:54,040 --> 00:30:55,760
Speaker 1: more of a like you never know where you're gonna

610
00:30:55,800 --> 00:30:59,040
Speaker 1: get kind of thing. Yeah, if well, first of all,

611
00:30:59,080 --> 00:31:01,080
Speaker 1: it depends on the ben years. If you're using sort

612
00:31:01,080 --> 00:31:04,479
Speaker 1: of a dicky exchange, then like it's sometimes like who

613
00:31:04,520 --> 00:31:06,080
Speaker 1: the hell knows what's going to happen, right, And you'll

614
00:31:06,120 --> 00:31:10,479
Speaker 1: see completely wacky prints sometimes go up on liquid fund us.

615
00:31:10,480 --> 00:31:13,920
Speaker 1: And remember there's no recking mess here or anything like that. Yeah,

616
00:31:13,960 --> 00:31:15,600
Speaker 1: I was gonna say, like in in the US, like

617
00:31:15,680 --> 00:31:18,000
Speaker 1: you know, every market maker is making markets on every exchange,

618
00:31:18,000 --> 00:31:20,040
Speaker 1: but I guess there's no there's no reason to expect

619
00:31:20,080 --> 00:31:23,600
Speaker 1: that in crypto yet, no, And so like the different exchanges,

620
00:31:23,680 --> 00:31:26,280
Speaker 1: like Bitcoin USD on one exchange is like a different

621
00:31:26,280 --> 00:31:29,120
Speaker 1: product from Bitcoin USD on another exchange. I mean, obviously

622
00:31:29,120 --> 00:31:31,320
Speaker 1: it's basically the same thing, but it takes like an

623
00:31:31,360 --> 00:31:34,040
Speaker 1: hour to turn one into the other through like transfers

624
00:31:34,160 --> 00:31:36,120
Speaker 1: if you're lucky, and like a day if you're unlucky.

625
00:31:36,840 --> 00:31:40,360
Speaker 1: And and there's no there's no nothing forcibly keeping those

626
00:31:40,920 --> 00:31:43,040
Speaker 1: in line with each other. Right, So so that is

627
00:31:43,080 --> 00:31:45,520
Speaker 1: one thing to note is you see divergences between different

628
00:31:45,560 --> 00:31:50,440
Speaker 1: exchanges when markets are stressed and you usually these are

629
00:31:50,520 --> 00:31:52,960
Speaker 1: tiny because there are over treasures, but like when they're

630
00:31:53,040 --> 00:31:55,400
Speaker 1: big moves, sometimes they're percent. So it's that's sort of

631
00:31:55,480 --> 00:31:57,600
Speaker 1: like one caveot to make it. And when you talk

632
00:31:57,600 --> 00:32:00,040
Speaker 1: about which exchanges you see sort of these illiquid and

633
00:32:00,120 --> 00:32:02,520
Speaker 1: so on, it's maybe not exactly what you think, like

634
00:32:02,600 --> 00:32:04,840
Speaker 1: it's through served of the like dicky ones, it's also

635
00:32:04,920 --> 00:32:06,920
Speaker 1: true of some of the better known ones. And in

636
00:32:07,080 --> 00:32:09,680
Speaker 1: particular and this is like a huge, huge, huge factor

637
00:32:10,320 --> 00:32:14,360
Speaker 1: any exchange that doesn't allow any leverage or margin, there's

638
00:32:14,360 --> 00:32:16,960
Speaker 1: sort of competing intuitions for what would happen there. But

639
00:32:17,240 --> 00:32:20,640
Speaker 1: in general it's less liquid. And the reason it's less

640
00:32:20,640 --> 00:32:23,760
Speaker 1: liquities like the liquidy fighters don't have any ability to

641
00:32:23,840 --> 00:32:26,360
Speaker 1: margin there. And remember this is like these needs to

642
00:32:26,360 --> 00:32:29,760
Speaker 1: be deliverables. This isn't just looking at total value. You know,

643
00:32:29,920 --> 00:32:32,640
Speaker 1: Let's say that someone tries to sell a hundred million

644
00:32:32,680 --> 00:32:35,440
Speaker 1: dollars a bitcoin on it in a five minute period

645
00:32:35,640 --> 00:32:39,239
Speaker 1: on a spot exchange with no no margin capabilities. If

646
00:32:39,280 --> 00:32:41,880
Speaker 1: the market makers didn't have a hundred million US dollars

647
00:32:42,280 --> 00:32:47,240
Speaker 1: basically custodied on that particular exchange at that particular time,

648
00:32:47,280 --> 00:32:49,520
Speaker 1: they can't buy it ladies just run out of dollar

649
00:32:49,600 --> 00:32:51,760
Speaker 1: spy and they might have another three hundred million dollars

650
00:32:52,160 --> 00:32:55,080
Speaker 1: in their bank account or in other exchanges that didn't

651
00:32:55,080 --> 00:32:57,400
Speaker 1: help them buy that offer, and it might take a

652
00:32:57,480 --> 00:32:59,680
Speaker 1: day to get the dollars over there if there's no

653
00:32:59,840 --> 00:33:01,720
Speaker 1: more ginning that. That also makes it way harder for

654
00:33:01,840 --> 00:33:04,880
Speaker 1: market makers ride deep liquidity because again they're just like

655
00:33:04,960 --> 00:33:07,800
Speaker 1: it's not capital efficient for them to keep seventeen billion

656
00:33:07,840 --> 00:33:12,000
Speaker 1: dollars of reserves of every plausible currency on every plausible exchange,

657
00:33:12,760 --> 00:33:14,280
Speaker 1: right because in the US you have to in like

658
00:33:14,480 --> 00:33:16,840
Speaker 1: US equities, you need to put orders on every exchange.

659
00:33:16,880 --> 00:33:18,800
Speaker 1: But in in crypto to do this you need to

660
00:33:19,200 --> 00:33:22,680
Speaker 1: like actually capitalize like your maximum order everything that's change

661
00:33:22,720 --> 00:33:25,360
Speaker 1: separately exactly. And this is the flip that this is

662
00:33:25,400 --> 00:33:28,440
Speaker 1: a drawback to the cryptosystem where I sort of described

663
00:33:28,440 --> 00:33:30,440
Speaker 1: the miracle of it, you know earlier, of like one

664
00:33:30,520 --> 00:33:34,640
Speaker 1: integrated product and so you get so much efficiency out

665
00:33:34,680 --> 00:33:36,840
Speaker 1: of like you know, you just have your funds there

666
00:33:36,840 --> 00:33:38,520
Speaker 1: and you can do anything you want on the exchange,

667
00:33:38,600 --> 00:33:40,920
Speaker 1: and like there are no intermediaries. Everyone can do it

668
00:33:41,560 --> 00:33:44,240
Speaker 1: like this. There's no like stock loan business being completely

669
00:33:44,320 --> 00:33:47,040
Speaker 1: just like separate and a separate company on a separate

670
00:33:47,080 --> 00:33:49,240
Speaker 1: time scale from like the trades you need to be doing.

671
00:33:49,880 --> 00:33:51,600
Speaker 1: You do get a ton of efficiency of this, but

672
00:33:51,800 --> 00:33:54,000
Speaker 1: the flip side is you don't have one central prime

673
00:33:54,080 --> 00:33:59,080
Speaker 1: broker that's capitalizing, you know, simultaneously all exchanges for you

674
00:33:59,200 --> 00:34:02,800
Speaker 1: with the same apital, Like you have to separately capitalize

675
00:34:02,840 --> 00:34:05,520
Speaker 1: each one, which is super super expensive, especially if they

676
00:34:05,560 --> 00:34:07,680
Speaker 1: don't allow a margin. So that's sort of like one

677
00:34:07,840 --> 00:34:10,160
Speaker 1: issue that you run into, which isn't an issue with

678
00:34:10,280 --> 00:34:12,320
Speaker 1: overall crypto markets. Like, if you're looking sort of like

679
00:34:12,880 --> 00:34:15,759
Speaker 1: the like blended average bitcoin price, that's not a huge deal.

680
00:34:15,960 --> 00:34:18,560
Speaker 1: But if you're looking at like blowouts of one particular

681
00:34:18,680 --> 00:34:21,680
Speaker 1: venue that is, then you get to like, okay, sure,

682
00:34:21,760 --> 00:34:23,520
Speaker 1: but like like if you aren't that, like let's use

683
00:34:23,560 --> 00:34:26,520
Speaker 1: just average bitcoin prices across all major exchanges. You're not

684
00:34:26,600 --> 00:34:28,759
Speaker 1: worried so much about, Like, yeah, it sucks that there's

685
00:34:28,760 --> 00:34:31,439
Speaker 1: like a little divergence, but like generally what's the bitcoin worth?

686
00:34:31,560 --> 00:34:34,680
Speaker 1: Like you know, how much does that diverge? Yeah, you know,

687
00:34:34,840 --> 00:34:36,759
Speaker 1: it's it's better than it was three years ago. Like

688
00:34:36,880 --> 00:34:39,719
Speaker 1: the market makers are massively better capitalized than they were

689
00:34:40,160 --> 00:34:43,279
Speaker 1: three years ago. Um, and so you know, I think

690
00:34:43,400 --> 00:34:45,800
Speaker 1: something you saw is like on this drap in you know,

691
00:34:45,960 --> 00:34:49,239
Speaker 1: may from like sixty k to thirty k. It was

692
00:34:49,320 --> 00:34:52,239
Speaker 1: like very very orderly all things considered, Like is if

693
00:34:52,239 --> 00:34:54,040
Speaker 1: a few percent drop in crypto markets like a one

694
00:34:54,120 --> 00:34:56,880
Speaker 1: day period, but like and there's there's a lot of liquidations,

695
00:34:56,960 --> 00:35:01,240
Speaker 1: but like there there weren't massive it liquid prints markets

696
00:35:01,280 --> 00:35:04,160
Speaker 1: remained liquid and and and and worldly more or less

697
00:35:04,440 --> 00:35:07,640
Speaker 1: to like an impressive extent given the volatility. Contrast that

698
00:35:07,800 --> 00:35:12,439
Speaker 1: with a year ago in March, when crypto dropped from

699
00:35:12,760 --> 00:35:15,160
Speaker 1: nine k to four k and like a two day period.

700
00:35:15,480 --> 00:35:17,840
Speaker 1: There are people freaking out there that like they're going

701
00:35:17,920 --> 00:35:20,440
Speaker 1: to be systematic failures in the crypto industry, and like

702
00:35:20,960 --> 00:35:23,840
Speaker 1: you know, think about like it wasn't like our Chagos

703
00:35:23,960 --> 00:35:26,080
Speaker 1: people are worried about it was two thousand eight. It

704
00:35:26,280 --> 00:35:30,279
Speaker 1: was a a chain of liquidations of businesses started by

705
00:35:30,280 --> 00:35:32,719
Speaker 1: a few and they are like people going around saying,

706
00:35:32,760 --> 00:35:34,759
Speaker 1: we have no idea who's underwater here, Like it could

707
00:35:34,800 --> 00:35:38,759
Speaker 1: be everyone, like lots of businesses and basically predicated their

708
00:35:38,800 --> 00:35:42,239
Speaker 1: financing strategy on the notion that it was implausible depic

709
00:35:42,320 --> 00:35:45,120
Speaker 1: when we go blew five thousand dollars for better for worse.

710
00:35:45,200 --> 00:35:47,920
Speaker 1: That that was like empirically true. Look love mining firms,

711
00:35:47,960 --> 00:35:50,919
Speaker 1: there will leverage long bitcoin with like a bankruptcy price

712
00:35:51,000 --> 00:35:55,239
Speaker 1: of like you know, like there's like a huge, huge

713
00:35:55,239 --> 00:35:57,560
Speaker 1: swass of the crypto space that were like maybe in

714
00:35:57,680 --> 00:36:00,759
Speaker 1: danger of being bankrupt at four k, and of course

715
00:36:00,840 --> 00:36:04,080
Speaker 1: then you could have massive cascading effects and liquity and

716
00:36:04,120 --> 00:36:07,200
Speaker 1: markets was completely shot. None of the market makers had

717
00:36:07,239 --> 00:36:10,480
Speaker 1: capital left to buy, even though they are obviously amazing

718
00:36:10,520 --> 00:36:12,480
Speaker 1: purchases to do if you happen to have a billion

719
00:36:12,520 --> 00:36:14,880
Speaker 1: dollars lying around and and and so it was just

720
00:36:15,000 --> 00:36:17,520
Speaker 1: like it was. It was a massive nightmare and like

721
00:36:17,640 --> 00:36:19,880
Speaker 1: really dangerous for the industry in a way that like

722
00:36:20,000 --> 00:36:22,080
Speaker 1: this serious crush was way more orderly, and I think

723
00:36:22,360 --> 00:36:25,759
Speaker 1: partially the industry has grown a lot partially honestly, like

724
00:36:26,080 --> 00:36:28,719
Speaker 1: no one's business was predicated on bitcoin never getting down

725
00:36:28,760 --> 00:36:31,440
Speaker 1: to thirty cable again, like everyone sort of thought that

726
00:36:31,560 --> 00:36:34,120
Speaker 1: might happen. Is that is that a way of saying

727
00:36:34,200 --> 00:36:38,120
Speaker 1: that the industry has less leverage like than it was. Yes,

728
00:36:38,280 --> 00:36:41,000
Speaker 1: I think that's like basically right, that the industry is

729
00:36:41,040 --> 00:36:43,480
Speaker 1: less leverage to present terms. Now, I think the dollars

730
00:36:43,520 --> 00:36:45,759
Speaker 1: of leverage have gone up, but so was the market cap,

731
00:36:46,239 --> 00:36:48,759
Speaker 1: and the market cap has gone up faster. This is

732
00:36:49,080 --> 00:36:51,040
Speaker 1: what I was about to ask, because it feels like

733
00:36:51,239 --> 00:36:54,000
Speaker 1: you're describing the system is being less levered and the

734
00:36:54,080 --> 00:36:58,680
Speaker 1: market makers and the exchanges being better at liquidating positions,

735
00:36:58,880 --> 00:37:00,719
Speaker 1: being able to do it in a more orderly way.

736
00:37:01,120 --> 00:37:04,000
Speaker 1: But I feel like, at the same time, so everyone

737
00:37:04,040 --> 00:37:06,960
Speaker 1: always struggles whenever there's a big move in bitcoin, and

738
00:37:07,040 --> 00:37:09,279
Speaker 1: I feel like over the past few months we've seen

739
00:37:09,440 --> 00:37:12,280
Speaker 1: leverage come up again and again as a sort of excuse,

740
00:37:12,440 --> 00:37:15,200
Speaker 1: or whenever the price is dropping, it's like, oh, levered

741
00:37:15,239 --> 00:37:18,680
Speaker 1: positions are getting liquidated, Like is there a disconnect there?

742
00:37:18,760 --> 00:37:21,080
Speaker 1: Like is that narrative of the market wrong? And then

743
00:37:21,400 --> 00:37:25,600
Speaker 1: if it is, what is actually driving the price of bitcoin? Like,

744
00:37:25,719 --> 00:37:27,480
Speaker 1: if you were going to look at the past couple

745
00:37:27,520 --> 00:37:30,480
Speaker 1: of months, what was the cause of the down draft?

746
00:37:31,360 --> 00:37:33,399
Speaker 1: It's a really good question. So first answer is there's

747
00:37:33,440 --> 00:37:36,680
Speaker 1: some truth to it. Liquidations and leverage were a cause.

748
00:37:37,200 --> 00:37:42,279
Speaker 1: One of the causes of the draw from it was

749
00:37:42,400 --> 00:37:45,719
Speaker 1: just at a level which is large and absolute terms

750
00:37:45,880 --> 00:37:48,880
Speaker 1: compared to two a year ago, but small relative to

751
00:37:48,960 --> 00:37:52,000
Speaker 1: the capital in this space, and so you know, there

752
00:37:52,040 --> 00:37:54,560
Speaker 1: are twenty billion dollars of long positions probably that got

753
00:37:54,640 --> 00:37:58,080
Speaker 1: liquidated over a week long period during the base part

754
00:37:58,120 --> 00:38:00,759
Speaker 1: of the drop in crypto. But the industry is able

755
00:38:00,800 --> 00:38:03,279
Speaker 1: to absorb that because a decrease in price. It caused

756
00:38:03,320 --> 00:38:05,440
Speaker 1: a significant decrease in price, but it was like a

757
00:38:05,480 --> 00:38:08,800
Speaker 1: surprising the orderly decrease in price in that like people

758
00:38:08,840 --> 00:38:11,080
Speaker 1: weren't blowing out there there. You know, there are a

759
00:38:11,120 --> 00:38:13,160
Speaker 1: lot of losses from some people, but they, you know,

760
00:38:13,360 --> 00:38:15,960
Speaker 1: weren't generally going. You know, this is sort of like

761
00:38:16,080 --> 00:38:18,520
Speaker 1: large players in this space were very well capitalized. The

762
00:38:18,680 --> 00:38:23,200
Speaker 1: system's technology had improved, so exchange downtime was less bad.

763
00:38:23,719 --> 00:38:26,240
Speaker 1: I don't want to say he's great, Like mostly stages

764
00:38:26,239 --> 00:38:29,719
Speaker 1: had serious downtime this time, but way less than you know,

765
00:38:29,920 --> 00:38:31,920
Speaker 1: a year ago when most exchanges had twelve hours of

766
00:38:32,000 --> 00:38:35,560
Speaker 1: downtime during the big crash. And so the infrastructure and

767
00:38:35,640 --> 00:38:38,600
Speaker 1: the liquidity in this space held up much better under

768
00:38:38,640 --> 00:38:40,359
Speaker 1: the liquidations than they did a year ago. But there

769
00:38:40,400 --> 00:38:43,399
Speaker 1: were real liquidations and it was one of the contributors

770
00:38:43,680 --> 00:38:46,279
Speaker 1: to the crash. Now, one thing I think is worth

771
00:38:46,360 --> 00:38:49,640
Speaker 1: noting there is like they're also one of the contributors

772
00:38:49,680 --> 00:38:52,560
Speaker 1: to run up from ten k to sixty K. I

773
00:38:52,880 --> 00:38:54,920
Speaker 1: think that's sort of like often people sort of like

774
00:38:55,320 --> 00:38:58,400
Speaker 1: want to live in a fantasy land where like leverage

775
00:38:58,440 --> 00:39:01,200
Speaker 1: can make markets go up but not out, and it's

776
00:39:01,200 --> 00:39:03,839
Speaker 1: like not not really how it works, like for better

777
00:39:03,920 --> 00:39:06,280
Speaker 1: or for worse. Like I strongly believe that the crypto

778
00:39:06,360 --> 00:39:09,840
Speaker 1: ecosystem is in a stronger healthier position today because of

779
00:39:10,000 --> 00:39:29,399
Speaker 1: leverage than it would be if there was never any leverage, Sam,

780
00:39:29,920 --> 00:39:31,880
Speaker 1: and I don't know how much work if we're going

781
00:39:31,920 --> 00:39:33,640
Speaker 1: to really talk about this, but I actually want to

782
00:39:33,760 --> 00:39:37,480
Speaker 1: just ask a sort of question related to the Defy ecosystem.

783
00:39:37,560 --> 00:39:39,920
Speaker 1: And I know beyond f t X you're invested in

784
00:39:40,000 --> 00:39:44,040
Speaker 1: that there is leverage existing DEFY in different ways. So

785
00:39:44,400 --> 00:39:48,720
Speaker 1: someone might post some stable coin to borrow more stable

786
00:39:48,760 --> 00:39:51,280
Speaker 1: coins that they might post either to borrow stable coins,

787
00:39:51,560 --> 00:39:53,759
Speaker 1: and then they might use that to invest in something else,

788
00:39:53,800 --> 00:39:56,920
Speaker 1: so then they get another token. Are we gonna have

789
00:39:57,080 --> 00:40:00,040
Speaker 1: to like how well do we have a handle? And

790
00:40:00,600 --> 00:40:03,920
Speaker 1: I guess what I would say is leverage measures within defy.

791
00:40:04,000 --> 00:40:06,480
Speaker 1: It feels like whether we're talking about an exchange like

792
00:40:06,600 --> 00:40:11,080
Speaker 1: f t X or traditional uh traditional trad five venue

793
00:40:11,160 --> 00:40:13,239
Speaker 1: like we have these sort of like concepts of like

794
00:40:13,520 --> 00:40:15,440
Speaker 1: how much open interest is there and how many like

795
00:40:15,560 --> 00:40:18,080
Speaker 1: long futures are out there. Are we going to have

796
00:40:18,160 --> 00:40:21,840
Speaker 1: to sort of like reconceptualize how we think about leverage

797
00:40:21,920 --> 00:40:24,720
Speaker 1: in the DeFi space where perhaps there isn't a perfect

798
00:40:24,760 --> 00:40:26,960
Speaker 1: analog to some of this stuff. And do we have

799
00:40:27,120 --> 00:40:30,880
Speaker 1: a good handle on sort of like overall vulnerability to

800
00:40:31,560 --> 00:40:34,239
Speaker 1: disorderly liquidations? Yes, So I don't think we need to

801
00:40:34,320 --> 00:40:38,360
Speaker 1: fundamentally reconceptualize it. I think they're very clear parallels, and

802
00:40:38,400 --> 00:40:40,680
Speaker 1: I think it's like not that hard in some sense

803
00:40:41,080 --> 00:40:42,600
Speaker 1: to think about. I think the big problem is that

804
00:40:42,640 --> 00:40:45,640
Speaker 1: there isn't a guy who's in charge of it. When

805
00:40:45,680 --> 00:40:47,920
Speaker 1: you sort of think about, like, you know, how do

806
00:40:48,000 --> 00:40:51,040
Speaker 1: you figure out like who's in charge of like staying

807
00:40:51,080 --> 00:40:53,799
Speaker 1: on top of the risk on fts? Like there's an answer, right,

808
00:40:54,400 --> 00:40:56,960
Speaker 1: It's it's like it's me, right, you know, and my team.

809
00:40:57,440 --> 00:40:59,360
Speaker 1: I think when you can defy, there often isn't an

810
00:40:59,400 --> 00:41:01,879
Speaker 1: answer for me in charge of of managing it. Also

811
00:41:01,960 --> 00:41:04,799
Speaker 1: was in church of reporting it, and so I think

812
00:41:04,840 --> 00:41:07,920
Speaker 1: it's just messy is the answer like like like no

813
00:41:08,000 --> 00:41:11,839
Speaker 1: one need serve response taking responsibility and it's not obviously would.

814
00:41:12,360 --> 00:41:13,719
Speaker 1: And so I think that there's just like a ton

815
00:41:13,760 --> 00:41:17,080
Speaker 1: of untracked stuff, and like you know what that means

816
00:41:17,239 --> 00:41:22,360
Speaker 1: is like, yeah, it's just like there's uh more capacity

817
00:41:22,440 --> 00:41:26,000
Speaker 1: for like wacky bad things to happen, because no one's

818
00:41:26,000 --> 00:41:28,720
Speaker 1: in charge of making sure that when something wacky happens

819
00:41:28,800 --> 00:41:31,120
Speaker 1: is the good kind of wacky. You know, we were

820
00:41:31,480 --> 00:41:34,080
Speaker 1: We're talking about how it's been an eventful a couple

821
00:41:34,120 --> 00:41:37,160
Speaker 1: of weeks for crypto, and one of the things that happened, UM,

822
00:41:37,280 --> 00:41:41,200
Speaker 1: which would probably fall into the sort of UM negative camp,

823
00:41:41,440 --> 00:41:44,640
Speaker 1: was the new SEC chair Gary Gensler, came out and

824
00:41:44,800 --> 00:41:49,120
Speaker 1: started talking about UM token ized stocks or synthetic stocks

825
00:41:49,280 --> 00:41:53,359
Speaker 1: and making some noises about potentially going after those. UM.

826
00:41:53,640 --> 00:41:57,399
Speaker 1: So I'm wondering how worrying is that for you? Um,

827
00:41:57,880 --> 00:42:01,720
Speaker 1: would you potentially CONSI they're delisting those I saw unite

828
00:42:01,719 --> 00:42:05,040
Speaker 1: swap took them off of well at least the front

829
00:42:05,160 --> 00:42:07,200
Speaker 1: end of unice swaps. You can still trade them on

830
00:42:07,239 --> 00:42:09,320
Speaker 1: the actual unit swap code, but you just can't do

831
00:42:09,400 --> 00:42:12,040
Speaker 1: it through the unit swap website. Um, is that something

832
00:42:12,160 --> 00:42:14,719
Speaker 1: you think the industry is just gonna have to do

833
00:42:14,960 --> 00:42:19,000
Speaker 1: going forward? So? Right, so I think basically what what

834
00:42:19,239 --> 00:42:23,440
Speaker 1: Againser said, which is frankly not that shocking, is like,

835
00:42:24,360 --> 00:42:26,399
Speaker 1: if you tokenize the stock, it's or is still sort

836
00:42:26,400 --> 00:42:29,280
Speaker 1: of a stock, and like it's not like it loses

837
00:42:29,360 --> 00:42:33,640
Speaker 1: all regulatory properties UM as soon as you tokenize it. Again,

838
00:42:33,760 --> 00:42:35,560
Speaker 1: not not to put words in his mouth, but I

839
00:42:36,160 --> 00:42:38,120
Speaker 1: wouldn't be surprised if you're start looking at some parts

840
00:42:38,120 --> 00:42:40,200
Speaker 1: of the industry and being like that sure looks like

841
00:42:40,400 --> 00:42:44,759
Speaker 1: and obviously unregistered security being offered with no email ky

842
00:42:44,840 --> 00:42:49,560
Speaker 1: C registration or terms or conditions to anyone in the world,

843
00:42:49,760 --> 00:42:56,440
Speaker 1: including Americans and restricted jurisdictions. That's not generally how brokerages were.

844
00:42:57,360 --> 00:43:00,280
Speaker 1: I think it's sort of like where you know, awfully

845
00:43:00,320 --> 00:43:03,360
Speaker 1: that was coming from UM, and I don't think that

846
00:43:03,520 --> 00:43:06,799
Speaker 1: was a super shocking announcement. I think, like I think

847
00:43:06,840 --> 00:43:09,080
Speaker 1: when you contrast it with what we have on FKS,

848
00:43:09,239 --> 00:43:12,360
Speaker 1: like it's a pretty different situation where we have like,

849
00:43:12,800 --> 00:43:15,960
Speaker 1: first of all, we email ky C everyone fully who

850
00:43:16,680 --> 00:43:18,520
Speaker 1: is able to touch you know, stock and f kis

851
00:43:18,560 --> 00:43:21,239
Speaker 1: at all. Second of all, we restrict it's such that

852
00:43:21,360 --> 00:43:26,359
Speaker 1: Americans can't access them, neither can a number of other jurisdictions. UM.

853
00:43:26,640 --> 00:43:30,280
Speaker 1: We ensure that they're backed, we have an actual license

854
00:43:30,800 --> 00:43:34,160
Speaker 1: from often to offer the products. Um, And it's much

855
00:43:34,200 --> 00:43:36,200
Speaker 1: more like just how like you know, interactive burgers are

856
00:43:36,200 --> 00:43:39,200
Speaker 1: introducing burgers to them operate. And so I think that

857
00:43:39,320 --> 00:43:42,279
Speaker 1: like Gazer wasn't saying like if you tokenize the stock

858
00:43:42,360 --> 00:43:44,680
Speaker 1: it makes it evil. I think like his point was

859
00:43:44,800 --> 00:43:47,480
Speaker 1: like it's it's kind of still stock, you know, if

860
00:43:47,800 --> 00:43:50,399
Speaker 1: like you wouldn't have been able to offer stocks at all,

861
00:43:50,960 --> 00:43:55,120
Speaker 1: like queery, whether you could offer tokenized stocks. Is the

862
00:43:55,239 --> 00:43:58,600
Speaker 1: long term goal that you are offering token of stocks

863
00:43:58,640 --> 00:44:01,480
Speaker 1: to Americans, like either by regulatory changes or by like

864
00:44:01,600 --> 00:44:04,239
Speaker 1: registering as a US exchanged, Like, is this like a

865
00:44:04,320 --> 00:44:07,120
Speaker 1: sort of crypto it's the financial system kind of player.

866
00:44:07,280 --> 00:44:10,080
Speaker 1: Is this like you're a crypto exchange of since and

867
00:44:10,080 --> 00:44:12,560
Speaker 1: I'll let you do. No, it's definitely the first thing

868
00:44:12,640 --> 00:44:16,400
Speaker 1: you said, um, like yeah, very very clearly, that is

869
00:44:16,520 --> 00:44:19,239
Speaker 1: like our our goal here. And I think that like,

870
00:44:20,040 --> 00:44:21,920
Speaker 1: like there there's sort of a roadmap for this in

871
00:44:22,000 --> 00:44:24,479
Speaker 1: the United States, at least sort of the tooganizing party

872
00:44:24,520 --> 00:44:26,480
Speaker 1: think is complicated in the United States. And I do

873
00:44:26,800 --> 00:44:30,040
Speaker 1: think that like no one has quite issue claritite clarity

874
00:44:30,120 --> 00:44:33,360
Speaker 1: on exactly what it means in the u S regulatory

875
00:44:33,440 --> 00:44:35,760
Speaker 1: context to have a token ized stock. I think against

876
00:44:35,760 --> 00:44:38,200
Speaker 1: the start of saying like, well, it certainly isn't like irrelevant,

877
00:44:38,600 --> 00:44:41,440
Speaker 1: like like that's still kind of a stock. Um, It's

878
00:44:41,480 --> 00:44:43,440
Speaker 1: not like when you talk about tognizing it, like what

879
00:44:43,480 --> 00:44:44,840
Speaker 1: does it mean for it to be toganized? Is it

880
00:44:44,960 --> 00:44:47,440
Speaker 1: free floating? How does that work? Who's thesure? Like there's

881
00:44:47,480 --> 00:44:49,719
Speaker 1: a lot of st complicated questions there, but maybe just

882
00:44:49,800 --> 00:44:51,840
Speaker 1: taking a step back, like how it stalks in the

883
00:44:51,920 --> 00:44:55,440
Speaker 1: first place, like just normal non tokenized stocks. Um, I

884
00:44:55,440 --> 00:44:57,200
Speaker 1: don't know. I mean like we f g x u

885
00:44:57,320 --> 00:45:00,120
Speaker 1: S did recently get a Burger dealer license? Like or

886
00:45:00,320 --> 00:45:02,800
Speaker 1: you know, make of that what you will. So in theory,

887
00:45:02,960 --> 00:45:06,200
Speaker 1: one day rather than maybe you know, like I have

888
00:45:06,280 --> 00:45:10,160
Speaker 1: a Schwab account, or I have my like SMPTF and

889
00:45:11,000 --> 00:45:14,360
Speaker 1: a couple other basic things you could there is a

890
00:45:14,520 --> 00:45:17,560
Speaker 1: day in theory in which I could just have I

891
00:45:17,640 --> 00:45:19,720
Speaker 1: might have all that on f t X dot us.

892
00:45:20,920 --> 00:45:23,000
Speaker 1: That's right, And I think that there's like a lot

893
00:45:23,080 --> 00:45:27,279
Speaker 1: of advantages that system, because like it's sort of like

894
00:45:27,600 --> 00:45:30,440
Speaker 1: never fun when you're like, oh boy, I want to

895
00:45:30,480 --> 00:45:33,080
Speaker 1: go like do this thing with my money. Oh wait,

896
00:45:33,200 --> 00:45:35,840
Speaker 1: it's in the wrong pocket. Like you know, I I,

897
00:45:36,040 --> 00:45:38,800
Speaker 1: like wanted to go buy a banana, but it was

898
00:45:38,840 --> 00:45:40,880
Speaker 1: in my Proverge account, or like I want to buy

899
00:45:40,920 --> 00:45:43,200
Speaker 1: a bitcoin, but it was in my bank account, or

900
00:45:43,239 --> 00:45:45,160
Speaker 1: like I want to go buy Tesla, but it was

901
00:45:45,200 --> 00:45:48,480
Speaker 1: on my crypto account. And it takes like three days

902
00:45:49,160 --> 00:45:52,840
Speaker 1: to transfer, you know, between those Unlike like, it's not

903
00:45:52,960 --> 00:45:55,320
Speaker 1: a good user experience. You know, you have to have

904
00:45:55,400 --> 00:45:58,160
Speaker 1: decided days ahead of time what you're most likely to

905
00:45:58,200 --> 00:46:00,840
Speaker 1: want to use your funds for. UM and so I

906
00:46:00,920 --> 00:46:04,800
Speaker 1: do think that there's like real advantages to having a

907
00:46:04,920 --> 00:46:08,160
Speaker 1: single platform where you know, for all the most common

908
00:46:08,200 --> 00:46:10,520
Speaker 1: things you'd want to do with your funds, you can

909
00:46:10,560 --> 00:46:13,200
Speaker 1: do them. And you know, we're moving in that direction

910
00:46:13,320 --> 00:46:15,000
Speaker 1: on the con sumer side in the US, like we

911
00:46:15,080 --> 00:46:18,040
Speaker 1: have obviously Crypto. We have lots of methods here at

912
00:46:18,080 --> 00:46:21,000
Speaker 1: both Crypto and Fiat on and off the exchange. We

913
00:46:21,160 --> 00:46:23,880
Speaker 1: have a debit card that you can get tied to

914
00:46:23,960 --> 00:46:27,239
Speaker 1: your FDS account UM, which will spend whatever you happen

915
00:46:27,280 --> 00:46:29,640
Speaker 1: to have their whether it's Crypto or FIATO or whatever.

916
00:46:30,239 --> 00:46:32,560
Speaker 1: UM and and so you can you know, have your

917
00:46:32,560 --> 00:46:34,160
Speaker 1: funds there you can do your crypto trading, and you

918
00:46:34,200 --> 00:46:36,920
Speaker 1: can also go buy bread and you know, I have

919
00:46:37,120 --> 00:46:39,680
Speaker 1: like for her dealer license coming online and and and

920
00:46:39,800 --> 00:46:41,440
Speaker 1: so I think that is like definitely a part of

921
00:46:41,480 --> 00:46:45,560
Speaker 1: the vision. In the last time that we spoke to

922
00:46:45,640 --> 00:46:48,600
Speaker 1: we talked a little bit about this, but basically, every

923
00:46:48,719 --> 00:46:52,959
Speaker 1: time someone who's sort of like crypto skeptic starts first

924
00:46:53,000 --> 00:46:55,719
Speaker 1: thinking about the space, one of the first questions they

925
00:46:55,760 --> 00:46:58,840
Speaker 1: always ask is about tether. And we talked about this,

926
00:46:59,040 --> 00:47:03,480
Speaker 1: and you're you as a UM I guess the exchange,

927
00:47:03,520 --> 00:47:07,200
Speaker 1: but also with your trading. You're a tether user, and

928
00:47:07,400 --> 00:47:09,680
Speaker 1: you talked a little bit about some of the advantages

929
00:47:09,840 --> 00:47:11,799
Speaker 1: of it last time. But can you talk a little

930
00:47:11,840 --> 00:47:16,120
Speaker 1: bit further about the full experience of interacting with tether

931
00:47:16,160 --> 00:47:19,000
Speaker 1: because people, you know, people of all kinds of conspiracies like,

932
00:47:19,040 --> 00:47:21,200
Speaker 1: oh the money's out there. You never actually no one

933
00:47:21,239 --> 00:47:24,399
Speaker 1: has ever actually sold their tether and gotten us dollar back.

934
00:47:24,600 --> 00:47:26,880
Speaker 1: So forth, can you just talk a little bit about

935
00:47:26,960 --> 00:47:30,800
Speaker 1: your experience, I guess as a tether user and customer

936
00:47:31,280 --> 00:47:34,040
Speaker 1: of what happens when you use tether, when you want

937
00:47:34,080 --> 00:47:37,759
Speaker 1: to redeem tether, etcetera, and how that works as an

938
00:47:37,880 --> 00:47:42,560
Speaker 1: actual tether customer inside totally. I'm actually a little bit

939
00:47:42,600 --> 00:47:45,200
Speaker 1: curious before I jumped in, just like what like, like

940
00:47:45,400 --> 00:47:47,560
Speaker 1: Matt having like, I'm sure there's something that you've like

941
00:47:48,000 --> 00:47:51,120
Speaker 1: seen a lot of people chattering about, Like what's your

942
00:47:51,200 --> 00:47:53,600
Speaker 1: takeaway from what the chatter is like, and also what

943
00:47:53,719 --> 00:47:56,400
Speaker 1: sort of like your trying to like summary or like

944
00:47:56,560 --> 00:47:58,960
Speaker 1: thoughts are on that you know, based on that, and

945
00:47:59,000 --> 00:48:00,400
Speaker 1: then I can sort of dive into what what our

946
00:48:00,440 --> 00:48:04,359
Speaker 1: experiences has been like, ah were to be careful here.

947
00:48:04,840 --> 00:48:12,320
Speaker 1: Um like, tether Is has a strange public relations strategy,

948
00:48:12,400 --> 00:48:15,160
Speaker 1: I guess. I mean, like they talk a lot about

949
00:48:15,200 --> 00:48:17,440
Speaker 1: wanting to get an audit and then don't get an audit.

950
00:48:18,040 --> 00:48:21,840
Speaker 1: They talk a lot about their like high quality commercial

951
00:48:21,920 --> 00:48:27,279
Speaker 1: paper holdings, but don't disclose them because counterparty confidentiality is

952
00:48:27,360 --> 00:48:30,640
Speaker 1: very important to them, which is not true of any

953
00:48:30,719 --> 00:48:34,640
Speaker 1: other holder of commercial paper in the world. Um Like,

954
00:48:34,760 --> 00:48:37,480
Speaker 1: you can just look at like the complete holdings by

955
00:48:37,560 --> 00:48:41,440
Speaker 1: QUSIP of every money market fund, but forgether. It's very

956
00:48:41,480 --> 00:48:44,600
Speaker 1: important that they keep it secret. So if they were

957
00:48:44,800 --> 00:48:48,400
Speaker 1: doing something shady, they sound like what they sound like,

958
00:48:48,800 --> 00:48:50,960
Speaker 1: which doesn't prove that they're doing something shady, but it

959
00:48:51,120 --> 00:48:54,200
Speaker 1: is like it is confidence undermining. I think, yeah, I

960
00:48:54,280 --> 00:48:56,160
Speaker 1: think that's a pretty reasonable way of putting it. I

961
00:48:56,239 --> 00:49:00,360
Speaker 1: think like a pretty pretty odd public relations strategy is

962
00:49:00,719 --> 00:49:04,400
Speaker 1: not an unfair characterization. Um. And I think I'm generally

963
00:49:04,440 --> 00:49:06,719
Speaker 1: sort of like often sort of thought of as a

964
00:49:07,040 --> 00:49:10,279
Speaker 1: tether apologist or something. Is maybe how some people would

965
00:49:10,360 --> 00:49:15,200
Speaker 1: would phrase it. Um. I certainly wouldn't necessarily want to

966
00:49:15,239 --> 00:49:17,520
Speaker 1: say that they've like historically always chose them the best

967
00:49:17,719 --> 00:49:21,040
Speaker 1: PR strategy or or anything that sounds vaguely like that.

968
00:49:21,840 --> 00:49:23,560
Speaker 1: You know, I can serve a case where there's a

969
00:49:23,600 --> 00:49:25,160
Speaker 1: lot of smoke, but but I don't think there's really

970
00:49:25,280 --> 00:49:28,920
Speaker 1: much fire. But but I like get like there is

971
00:49:28,960 --> 00:49:31,640
Speaker 1: smoke and like you know, and I think that's sort

972
00:49:31,640 --> 00:49:34,160
Speaker 1: of like what's what's going on? Well, for one thing

973
00:49:34,200 --> 00:49:37,719
Speaker 1: is sort of like curious PR strategy, But putting that

974
00:49:38,000 --> 00:49:40,239
Speaker 1: that aside for a second, like, you know, how about

975
00:49:40,280 --> 00:49:43,080
Speaker 1: creating redeeming tether, Like can you do it? You can

976
00:49:43,200 --> 00:49:45,200
Speaker 1: do it, we have done, We've done billions. It's a

977
00:49:45,280 --> 00:49:48,440
Speaker 1: messy process, like it works, but it's you know, you

978
00:49:48,480 --> 00:49:50,640
Speaker 1: sort of look at creating redeeming USCC and it's like

979
00:49:50,680 --> 00:49:53,560
Speaker 1: all right, like they have their U s dollars in

980
00:49:53,640 --> 00:49:55,719
Speaker 1: a US bank account is the same bank that every

981
00:49:55,800 --> 00:49:59,400
Speaker 1: Nelson crypto uses. Takes like thirty seconds to you know

982
00:49:59,480 --> 00:50:02,719
Speaker 1: transfer even like go created, yeah, thirty seconds later they're

983
00:50:02,800 --> 00:50:05,160
Speaker 1: they're sending you the tokens. You can redeem it thirty

984
00:50:05,200 --> 00:50:07,400
Speaker 1: seconds later, like you see the funds in your account,

985
00:50:07,800 --> 00:50:11,960
Speaker 1: no fees. A very very kind of like straightforward, smooth process.

986
00:50:12,239 --> 00:50:13,879
Speaker 1: And I think you look at Tether and it's like, well,

987
00:50:14,239 --> 00:50:17,080
Speaker 1: it's a messy process, and I think like every piece

988
00:50:17,160 --> 00:50:20,080
Speaker 1: of mess in the process like makes it much harder

989
00:50:20,480 --> 00:50:22,520
Speaker 1: for them to have what would look like is self

990
00:50:22,560 --> 00:50:27,160
Speaker 1: evidently reasonable process. Like it just sort of like you know,

991
00:50:27,440 --> 00:50:29,480
Speaker 1: makes it sort of like really heightens the sense of

992
00:50:29,600 --> 00:50:32,600
Speaker 1: like something weird going on. I think that that's sort

993
00:50:32,600 --> 00:50:35,279
Speaker 1: of like is the answer though, is that like it

994
00:50:35,440 --> 00:50:38,440
Speaker 1: is messy, but but like the like the funds are,

995
00:50:38,560 --> 00:50:42,600
Speaker 1: they're like we see like real which admitting flows into

996
00:50:42,640 --> 00:50:45,680
Speaker 1: Tether from a lot of places, like massive ones that

997
00:50:46,080 --> 00:50:48,600
Speaker 1: you know then lead to market makers selling and creating

998
00:50:49,160 --> 00:50:51,920
Speaker 1: and sending you know, real billions of dollars to Tether's

999
00:50:51,960 --> 00:50:54,960
Speaker 1: bank account, you know, to create it and like you know,

1000
00:50:55,080 --> 00:50:57,800
Speaker 1: have have relationships with like father and the banks and

1001
00:50:57,880 --> 00:51:00,480
Speaker 1: and everything else involved, and like every think sort of

1002
00:51:00,560 --> 00:51:02,920
Speaker 1: checks out in a in a messy way, and then

1003
00:51:02,960 --> 00:51:04,200
Speaker 1: you can start of give to the question of like,

1004
00:51:04,200 --> 00:51:05,960
Speaker 1: all right, well, what's their business? Mouth is probably getting

1005
00:51:06,000 --> 00:51:07,960
Speaker 1: yield on the dollars? How are they doing that? I

1006
00:51:08,000 --> 00:51:11,359
Speaker 1: don't know, you know, like some commercial paper like stuff, um,

1007
00:51:12,000 --> 00:51:15,400
Speaker 1: and you know, I think it's like one of these

1008
00:51:15,480 --> 00:51:17,120
Speaker 1: things were like if you want to try and argue

1009
00:51:17,160 --> 00:51:19,440
Speaker 1: but whether it t other's worth likes or like a

1010
00:51:19,520 --> 00:51:21,839
Speaker 1: dollar in a penny, I think that's like a pretty

1011
00:51:21,880 --> 00:51:24,440
Speaker 1: reasonable argument, and like I don't I don't want to

1012
00:51:24,440 --> 00:51:26,560
Speaker 1: take a strong stance on that, Like I I certainly

1013
00:51:26,600 --> 00:51:28,960
Speaker 1: don't want to like strongly are you against any any

1014
00:51:29,040 --> 00:51:31,080
Speaker 1: stance there? But but I think that like when the

1015
00:51:31,160 --> 00:51:33,000
Speaker 1: argument gets like is it worth like about a dollar

1016
00:51:33,120 --> 00:51:36,120
Speaker 1: or like about thirty cents, like anything answers about a dollar,

1017
00:51:36,760 --> 00:51:39,560
Speaker 1: and like you know, the reason that it is fundamentally

1018
00:51:39,640 --> 00:51:42,560
Speaker 1: like basically backed by like you know about the right

1019
00:51:42,640 --> 00:51:44,759
Speaker 1: number probabble bit more than the right number of like

1020
00:51:45,120 --> 00:51:47,760
Speaker 1: kind of dollar like assets just in like a system

1021
00:51:47,800 --> 00:51:51,000
Speaker 1: which is like a little bit messy in every possible place,

1022
00:51:52,760 --> 00:51:55,880
Speaker 1: so they might stretch for yield, but like by buying

1023
00:51:56,040 --> 00:51:59,719
Speaker 1: like slightly nice your commercial paper where they might break

1024
00:51:59,760 --> 00:52:02,960
Speaker 1: the but go to like rather than that's like yeah,

1025
00:52:03,040 --> 00:52:05,279
Speaker 1: that that's my like and so I say this without

1026
00:52:05,360 --> 00:52:07,600
Speaker 1: knowing like exactly what their commercial papers like this is

1027
00:52:07,680 --> 00:52:09,680
Speaker 1: sort of like that that's a twist on it, which

1028
00:52:09,719 --> 00:52:12,239
Speaker 1: I'm just sort of inferring the details of that last

1029
00:52:12,280 --> 00:52:14,719
Speaker 1: piece based on like all the other interactions that serve

1030
00:52:14,719 --> 00:52:16,960
Speaker 1: if we've had with them. They could be putting it

1031
00:52:17,000 --> 00:52:18,600
Speaker 1: all into bitcoin, but that would just be sort of

1032
00:52:18,640 --> 00:52:21,400
Speaker 1: a strange move on their part because like they they

1033
00:52:21,440 --> 00:52:23,760
Speaker 1: have like a good business putting it into commercial pactly

1034
00:52:23,800 --> 00:52:27,279
Speaker 1: like they've got lots of legitimate, profitable good businesses. They

1035
00:52:27,320 --> 00:52:29,080
Speaker 1: don't need to do that. Also is unclear why they

1036
00:52:29,120 --> 00:52:32,120
Speaker 1: would do that, Like it's sort of like incredibly risky.

1037
00:52:32,800 --> 00:52:34,080
Speaker 1: Any of the other thing is like you get to

1038
00:52:34,160 --> 00:52:36,799
Speaker 1: know that people involved here they're not like that they

1039
00:52:36,920 --> 00:52:39,680
Speaker 1: really really aren't scammers. Like it's really not like you

1040
00:52:39,760 --> 00:52:41,800
Speaker 1: come away dealing with them, you're like they're selling me

1041
00:52:41,880 --> 00:52:44,880
Speaker 1: stake oil, Like they're too waitly lying about everything, and

1042
00:52:45,080 --> 00:52:47,640
Speaker 1: like I'm pretty sure that like nothing is like that's

1043
00:52:47,719 --> 00:52:50,200
Speaker 1: not at all sort of like the interactions that that

1044
00:52:50,280 --> 00:52:54,000
Speaker 1: people have with them. Did you watch the CNBC interview, Yeah,

1045
00:52:54,080 --> 00:52:57,239
Speaker 1: there is that, the one with the um with the

1046
00:52:57,480 --> 00:53:01,399
Speaker 1: legal counsel. Yeah. Yeah. I think they back themselves into

1047
00:53:01,440 --> 00:53:04,320
Speaker 1: a lot of positions where like they sort of like

1048
00:53:04,480 --> 00:53:08,319
Speaker 1: make it probably basically correct claims, but ones in which

1049
00:53:08,360 --> 00:53:10,160
Speaker 1: they're not going to, as you said, like they don't

1050
00:53:10,160 --> 00:53:15,080
Speaker 1: feel comfortable elaborating maybe for like just sort of like uh,

1051
00:53:15,239 --> 00:53:18,719
Speaker 1: you know, ethical reasons, maybe because like the truth is

1052
00:53:18,800 --> 00:53:22,000
Speaker 1: like a little bit messier than they'd like to say. Um,

1053
00:53:22,480 --> 00:53:24,520
Speaker 1: but but before a reason to make these claims and

1054
00:53:24,560 --> 00:53:27,520
Speaker 1: then like refuse to back them up, and and that's

1055
00:53:27,560 --> 00:53:30,080
Speaker 1: like never a good look. Although I think it is

1056
00:53:30,160 --> 00:53:33,320
Speaker 1: not that like there's no relationship between the claims and reality.

1057
00:53:33,360 --> 00:53:35,920
Speaker 1: I think he's just like one of those other cases.

1058
00:53:36,640 --> 00:53:39,960
Speaker 1: This might be an unfair question, but I'd be interested

1059
00:53:40,000 --> 00:53:42,800
Speaker 1: in your answer, Like if if the worst of the

1060
00:53:42,920 --> 00:53:47,840
Speaker 1: conspiracy theories were true about Tether, like I don't know,

1061
00:53:47,960 --> 00:53:51,200
Speaker 1: say it's investing, it's investing in commercial paper, but it's

1062
00:53:51,239 --> 00:53:56,040
Speaker 1: investing in like Chinese commercial paper and commercial exactly, and

1063
00:53:56,120 --> 00:53:58,640
Speaker 1: it all goes like bottom up, which which is a

1064
00:53:58,880 --> 00:54:02,560
Speaker 1: rumor that's out there. Of course, um and tether collapses.

1065
00:54:03,239 --> 00:54:08,279
Speaker 1: What would that mean for bitcoin and the wider crypto space? Yeah,

1066
00:54:08,480 --> 00:54:10,000
Speaker 1: so I do you want me to take like the

1067
00:54:10,080 --> 00:54:12,880
Speaker 1: fantastical version if that word tether goes to zero or

1068
00:54:12,960 --> 00:54:14,480
Speaker 1: dru me try and take like what I think sort

1069
00:54:14,480 --> 00:54:17,080
Speaker 1: of the most approximate, like vaguely plausible version of it.

1070
00:54:17,160 --> 00:54:21,640
Speaker 1: How about both? So maybe first I'll talk about the

1071
00:54:21,680 --> 00:54:24,640
Speaker 1: sort of plausible version. So like what if they took

1072
00:54:24,920 --> 00:54:27,719
Speaker 1: a third of the money that they had and put

1073
00:54:27,800 --> 00:54:31,560
Speaker 1: it in like sort be here commercial paper from China,

1074
00:54:31,840 --> 00:54:35,440
Speaker 1: like be here for China commercial paper, and and then

1075
00:54:35,640 --> 00:54:36,879
Speaker 1: you know, there's sort of a run in the bank

1076
00:54:36,960 --> 00:54:39,440
Speaker 1: in China as looks like you know, however that that

1077
00:54:39,480 --> 00:54:42,920
Speaker 1: could happen, um and uh, And it turns out that

1078
00:54:43,040 --> 00:54:47,680
Speaker 1: like this beat your commercial paper like to bolded on

1079
00:54:47,840 --> 00:54:50,640
Speaker 1: average or something, And so you ended up with like,

1080
00:54:51,400 --> 00:54:54,719
Speaker 1: you know, a twelve percent loss of the tether treasury, right,

1081
00:54:55,200 --> 00:54:58,239
Speaker 1: you know percent or something like that. Like let's say

1082
00:54:58,280 --> 00:55:01,040
Speaker 1: that's where you ended up, which at the like you know,

1083
00:55:01,760 --> 00:55:05,360
Speaker 1: sort of like very negative but like not completely implausible outcome.

1084
00:55:06,120 --> 00:55:08,480
Speaker 1: What happens then? So tether is sort of in some

1085
00:55:08,719 --> 00:55:12,200
Speaker 1: some mystical sense, is worth eighty eight cents or well

1086
00:55:12,239 --> 00:55:14,080
Speaker 1: it's worth it at least eight eight sense, right, like

1087
00:55:14,160 --> 00:55:16,520
Speaker 1: you can redeem it sort of maybe for eight cents.

1088
00:55:17,080 --> 00:55:18,920
Speaker 1: You know what's the loss? The loss there's like ten

1089
00:55:18,960 --> 00:55:23,839
Speaker 1: billion or something. One possibility, obviously, is like nothing happens, right,

1090
00:55:24,239 --> 00:55:27,719
Speaker 1: like unless people try to redeem almost all the tether

1091
00:55:27,800 --> 00:55:31,640
Speaker 1: and existence like they could keep processing. Maybe it doesn't

1092
00:55:31,680 --> 00:55:33,399
Speaker 1: even comes out. Maybe it comes out and for whatever

1093
00:55:33,440 --> 00:55:36,920
Speaker 1: rective because system doesn't seem to care. Um. That is

1094
00:55:36,960 --> 00:55:39,120
Speaker 1: like I think a plausible answer, right, it's just like

1095
00:55:39,239 --> 00:55:42,680
Speaker 1: weirdly things continue on as if that didn't happen. Um.

1096
00:55:42,800 --> 00:55:44,319
Speaker 1: But also maybe there's a little bit of a run

1097
00:55:44,360 --> 00:55:47,960
Speaker 1: on tether um the their banking partners start to get

1098
00:55:48,080 --> 00:55:52,279
Speaker 1: nervous redeeming. It becomes very difficult. Maybe they don't give

1099
00:55:52,280 --> 00:55:54,680
Speaker 1: you a dollar on the dollar for redemptions, maybe they

1100
00:55:55,040 --> 00:55:57,360
Speaker 1: limit them. They say, look, the world can only redeem

1101
00:55:57,719 --> 00:56:01,320
Speaker 1: one billion dollars per week total of tether maximum, and

1102
00:56:01,360 --> 00:56:04,800
Speaker 1: the world wants to redeem billion, and so there's like

1103
00:56:04,960 --> 00:56:06,799
Speaker 1: a race to redeem your tethers, and most people are

1104
00:56:06,800 --> 00:56:11,080
Speaker 1: not getting filled on those redemptions. Tether crashes down cents

1105
00:56:11,120 --> 00:56:14,160
Speaker 1: on the dollar, and markets you know, there's a lot

1106
00:56:14,239 --> 00:56:17,360
Speaker 1: of people who are stockpiling tether have losses of you know,

1107
00:56:18,880 --> 00:56:21,480
Speaker 1: and then I think sort of like, you know, there's

1108
00:56:21,520 --> 00:56:25,800
Speaker 1: some regulatory crackdowns on stable coins, and these mostly continue

1109
00:56:25,840 --> 00:56:28,200
Speaker 1: on as they were before, except that like you know,

1110
00:56:28,719 --> 00:56:32,120
Speaker 1: ten billion dollars total was lost between tether holders. Um,

1111
00:56:32,400 --> 00:56:34,879
Speaker 1: maybe they recover that eventually, right, Like if the tether

1112
00:56:35,000 --> 00:56:38,040
Speaker 1: is effectively backed by the combined equity of bit finex

1113
00:56:38,160 --> 00:56:41,359
Speaker 1: and tether, then like maybe that's like maybe it all

1114
00:56:41,440 --> 00:56:44,480
Speaker 1: ends up kind of okay, although like certainly, like you know,

1115
00:56:44,600 --> 00:56:46,839
Speaker 1: not in the liquid sense, you know, frankly, I think

1116
00:56:46,840 --> 00:56:48,359
Speaker 1: they could probably do a lot of things to try

1117
00:56:48,400 --> 00:56:51,719
Speaker 1: and plug that in the meantime. But like that that's

1118
00:56:51,719 --> 00:56:53,640
Speaker 1: sort of like I think roughly how that that would end,

1119
00:56:53,719 --> 00:56:55,120
Speaker 1: Like you would see each other. It gets sort of

1120
00:56:55,160 --> 00:56:57,719
Speaker 1: like repriced to like you know, ten cents center or whatever,

1121
00:56:57,880 --> 00:57:01,160
Speaker 1: fifteen cents center, I don't know, you know, it'd be

1122
00:57:01,280 --> 00:57:03,279
Speaker 1: like it's dock split and tether it'xcept you know where

1123
00:57:03,280 --> 00:57:06,440
Speaker 1: you didn't get more tethers and yeah, bitcoin tether and

1124
00:57:06,560 --> 00:57:09,400
Speaker 1: start training a different price price from bitcoin USD on

1125
00:57:09,560 --> 00:57:12,600
Speaker 1: major exchanges. The pig would like mostly break, there'd be

1126
00:57:12,719 --> 00:57:15,480
Speaker 1: like this absolute race redemptions fees for a dem would

1127
00:57:15,480 --> 00:57:17,560
Speaker 1: go up to a percent or two. They kind of

1128
00:57:17,640 --> 00:57:20,040
Speaker 1: slowly get through. People make a bunch of money doing

1129
00:57:20,080 --> 00:57:22,720
Speaker 1: the arbitrage. It would be a really bad look regulars

1130
00:57:22,760 --> 00:57:24,680
Speaker 1: who cracked down and stable points in crypto in general,

1131
00:57:25,080 --> 00:57:27,520
Speaker 1: and life would go on and probably the bitcoin crashes

1132
00:57:27,600 --> 00:57:31,600
Speaker 1: ten percent on like the bad pr that's like sort

1133
00:57:31,640 --> 00:57:35,360
Speaker 1: of roughly my guests like how that would play out? Um,

1134
00:57:35,440 --> 00:57:37,000
Speaker 1: I think it's like, would not be disastrous for the

1135
00:57:37,040 --> 00:57:40,680
Speaker 1: cript because systems, but clearly bad. Now we can start

1136
00:57:40,720 --> 00:57:43,320
Speaker 1: to take this other hypothetical of like what if it's

1137
00:57:43,360 --> 00:57:45,520
Speaker 1: worth as a row, Right, what if they like put

1138
00:57:46,200 --> 00:57:49,560
Speaker 1: a percent of it was in commercial paper of like

1139
00:57:50,080 --> 00:57:55,040
Speaker 1: one company and that one company goes bankrupt or something

1140
00:57:55,080 --> 00:57:57,280
Speaker 1: sort of equivalent to that, Right, Like what if somehow

1141
00:57:57,360 --> 00:58:01,560
Speaker 1: they lose the vast majority of the tether treasury. That's

1142
00:58:01,880 --> 00:58:04,680
Speaker 1: that's way worse. Like now, all of a sudden you

1143
00:58:04,720 --> 00:58:07,760
Speaker 1: have like a seventy billion dollar loss or whatever in crypto.

1144
00:58:08,160 --> 00:58:09,920
Speaker 1: I can't remember the current market gap, but like that's

1145
00:58:10,000 --> 00:58:12,640
Speaker 1: that's the order. You know, what's that mean? Well? Tether

1146
00:58:13,320 --> 00:58:16,960
Speaker 1: like BTC tether markets due to infinity, I guess you know,

1147
00:58:17,440 --> 00:58:20,600
Speaker 1: like like he probably gets it's it's you know, delisted

1148
00:58:20,680 --> 00:58:22,720
Speaker 1: from some venues. So there are a lot of bitcoin

1149
00:58:22,800 --> 00:58:26,080
Speaker 1: tether futures out there. Now this kind of a fun one, right,

1150
00:58:26,440 --> 00:58:28,800
Speaker 1: what if you have a quarterly bitcoin tether future and

1151
00:58:28,840 --> 00:58:32,920
Speaker 1: tether goes to zero? Like, what's your future expired? Too? Is?

1152
00:58:32,920 --> 00:58:35,840
Speaker 1: You know, sorry infinity? And like how do you like

1153
00:58:35,920 --> 00:58:37,840
Speaker 1: what's the pen l transfer there? Like are you trying

1154
00:58:37,840 --> 00:58:43,080
Speaker 1: to transfer infinity tethers each resido dollars from the losers

1155
00:58:43,160 --> 00:58:47,320
Speaker 1: the winners on that from the shorts of loongs like okay,

1156
00:58:47,400 --> 00:58:49,800
Speaker 1: so that that like some exchange you would have to

1157
00:58:49,840 --> 00:58:52,840
Speaker 1: contend with that. And there really are a significant open

1158
00:58:52,920 --> 00:58:55,480
Speaker 1: interests in bitcoin to other futures. Now, if it's a

1159
00:58:55,560 --> 00:58:58,320
Speaker 1: ten percent move, maybe something a little whacky happens. A

1160
00:58:58,320 --> 00:58:59,800
Speaker 1: lot of people thought they had a hedge and their

1161
00:58:59,800 --> 00:59:02,400
Speaker 1: head was not really a hedge. Um, but like you

1162
00:59:02,560 --> 00:59:04,800
Speaker 1: still expirem just like expires of forty four k instead

1163
00:59:04,800 --> 00:59:07,000
Speaker 1: of for d k. Right, if it's actually going close

1164
00:59:07,040 --> 00:59:10,400
Speaker 1: to zerow honestly think that a lot of exchange, would

1165
00:59:10,400 --> 00:59:14,320
Speaker 1: you sort of lie? Right? They just like silently removed

1166
00:59:14,360 --> 00:59:16,520
Speaker 1: the t from the end of the markets and hope

1167
00:59:16,560 --> 00:59:19,560
Speaker 1: no one noticed, and like the indexes would be steriously

1168
00:59:19,680 --> 00:59:24,680
Speaker 1: change and then there would be like like thiss of

1169
00:59:24,760 --> 00:59:29,000
Speaker 1: open interest in them which was collateralized fifty by tether

1170
00:59:29,120 --> 00:59:31,560
Speaker 1: from users, and the tether's now worth zero, and the

1171
00:59:31,640 --> 00:59:33,880
Speaker 1: exchange would have to choose between taking a massive loss

1172
00:59:33,960 --> 00:59:36,760
Speaker 1: or doing a massive claw back, or you know, it

1173
00:59:37,120 --> 00:59:40,320
Speaker 1: would be a mess. In other words, like like like

1174
00:59:40,440 --> 00:59:43,880
Speaker 1: a tether, like a bitcoin tether future is implicitly a

1175
00:59:44,000 --> 00:59:47,880
Speaker 1: Bitcoin us D future, and when tether starts being us D,

1176
00:59:48,080 --> 00:59:49,920
Speaker 1: they just sort of say, well, we really mentioned in

1177
00:59:50,040 --> 00:59:52,439
Speaker 1: us that's like my honest guess about what would happen

1178
00:59:52,480 --> 00:59:55,920
Speaker 1: on some venues like and and But of course that

1179
00:59:55,960 --> 00:59:58,440
Speaker 1: doesn't solve It's it's an interesting question because it's like,

1180
00:59:58,600 --> 01:00:02,240
Speaker 1: if you are like taking a position on tether, are

1181
01:00:02,280 --> 01:00:05,320
Speaker 1: you implicitly taking a U s D position or are

1182
01:00:05,320 --> 01:00:08,120
Speaker 1: you implicitly like betting on the credit risk? And the

1183
01:00:08,240 --> 01:00:11,840
Speaker 1: answer is, if you're taking a tether USD future like

1184
01:00:11,960 --> 01:00:14,160
Speaker 1: a U S T T gets U S T U

1185
01:00:14,280 --> 01:00:17,400
Speaker 1: s D futures position, you're clearly taking a credit risk position.

1186
01:00:17,600 --> 01:00:19,200
Speaker 1: But if you're putting on it, yeah, but if if

1187
01:00:19,240 --> 01:00:21,960
Speaker 1: it's a bitcoin tether. It's probably exactly no when he's

1188
01:00:22,040 --> 01:00:25,160
Speaker 1: using that, not no one but like open interest is

1189
01:00:25,200 --> 01:00:28,480
Speaker 1: trying to bet on bit, not tether. On this note, uh,

1190
01:00:28,600 --> 01:00:30,320
Speaker 1: And I want to just talk a little bit, make

1191
01:00:30,320 --> 01:00:31,760
Speaker 1: sure we get a little bit more to some of

1192
01:00:31,840 --> 01:00:34,640
Speaker 1: the interesting products you have f t X. There is

1193
01:00:34,760 --> 01:00:37,919
Speaker 1: like you have like this, it's an inverse or there's

1194
01:00:37,960 --> 01:00:40,640
Speaker 1: like a short tether. Is it a short tether future

1195
01:00:40,800 --> 01:00:44,160
Speaker 1: or like a three x short both and yeah, both,

1196
01:00:44,200 --> 01:00:47,120
Speaker 1: But actually like that's been a fantastic performer because or

1197
01:00:47,240 --> 01:00:49,280
Speaker 1: what is it, like a three x long tether thing

1198
01:00:49,360 --> 01:00:53,080
Speaker 1: that's just been like this position product that he's done

1199
01:00:53,080 --> 01:00:57,120
Speaker 1: pretty well. That's just because basically harvesting premium from all

1200
01:00:57,280 --> 01:01:00,320
Speaker 1: the people that are betting on tether's collapse. Like explain

1201
01:01:00,400 --> 01:01:03,040
Speaker 1: that product. I think it's basically right. So like right

1202
01:01:03,080 --> 01:01:05,400
Speaker 1: now I look at the tether. So we have on

1203
01:01:05,800 --> 01:01:07,800
Speaker 1: ft X, we have a U S T t against

1204
01:01:07,880 --> 01:01:10,960
Speaker 1: us D future. It's you know, a cash settled future

1205
01:01:11,360 --> 01:01:13,920
Speaker 1: on the USD price of tether. And so this is

1206
01:01:14,040 --> 01:01:20,000
Speaker 1: explicitly a credit risk product. And you know, and so

1207
01:01:20,200 --> 01:01:22,000
Speaker 1: you can ask what is it trading at so spa

1208
01:01:22,480 --> 01:01:25,920
Speaker 1: U S D t U s D is currently at one,

1209
01:01:26,640 --> 01:01:29,520
Speaker 1: so it's it's trading at a dollar and there's millions

1210
01:01:29,560 --> 01:01:31,760
Speaker 1: of dollars bid on both sides of that one basis

1211
01:01:31,800 --> 01:01:35,400
Speaker 1: point wide market. Now you look at the quarterly tether futures,

1212
01:01:35,760 --> 01:01:41,200
Speaker 1: so these are futures expiring in about two months September um,

1213
01:01:41,280 --> 01:01:44,200
Speaker 1: and they're currently there's forty million dollars of open interest

1214
01:01:44,360 --> 01:01:47,080
Speaker 1: right now on these on FTX and they're currently trading

1215
01:01:47,120 --> 01:01:51,080
Speaker 1: forty cents under you're training. What that means is that, like,

1216
01:01:51,800 --> 01:01:53,400
Speaker 1: you know, the market, if you wanted to read it

1217
01:01:53,480 --> 01:01:56,440
Speaker 1: this way, is pricing in you know, forty BIPs per

1218
01:01:56,760 --> 01:02:00,440
Speaker 1: month or per two months, so twenty a month of

1219
01:02:01,240 --> 01:02:04,680
Speaker 1: credit risk and tether every month that tether doesn't crash,

1220
01:02:05,480 --> 01:02:07,480
Speaker 1: like everyone who thought it was betting it was getting

1221
01:02:07,480 --> 01:02:09,520
Speaker 1: crash like bleeds a little bit, and every who bet

1222
01:02:09,560 --> 01:02:11,680
Speaker 1: that it wasn't giving crash gains a little bit and

1223
01:02:12,760 --> 01:02:16,000
Speaker 1: not surprisingly, like the world is divided into two people,

1224
01:02:16,080 --> 01:02:17,800
Speaker 1: not three people. These people are the people who think

1225
01:02:17,800 --> 01:02:19,880
Speaker 1: it won't crash and the people who think it will.

1226
01:02:20,440 --> 01:02:22,120
Speaker 1: There aren't people who think it's gonna go up to

1227
01:02:22,160 --> 01:02:24,960
Speaker 1: two dollars. It's like a massive bowl on the price

1228
01:02:25,040 --> 01:02:27,800
Speaker 1: of tether like one dollars through what you're shooting for. Um.

1229
01:02:28,080 --> 01:02:30,720
Speaker 1: And so because of this, like no one is like

1230
01:02:30,800 --> 01:02:32,520
Speaker 1: trying to buy this up above a dollar, like the

1231
01:02:32,560 --> 01:02:35,160
Speaker 1: words between the people shorting in at a dollar and

1232
01:02:35,200 --> 01:02:37,120
Speaker 1: the people who are lunging it below a dollar. So

1233
01:02:37,200 --> 01:02:39,920
Speaker 1: it's gonna settle below a dollar almost certainly. With with

1234
01:02:40,000 --> 01:02:42,400
Speaker 1: some cavats we get to actually there's some weird market dynamics.

1235
01:02:42,480 --> 01:02:44,919
Speaker 1: But um, but you know, because you always create blow

1236
01:02:44,920 --> 01:02:48,120
Speaker 1: a dollar basically and it never has blown down, right,

1237
01:02:48,200 --> 01:02:50,120
Speaker 1: and so like just you know, I think this is

1238
01:02:50,160 --> 01:02:54,640
Speaker 1: a prediction market, right like every year exactly every year

1239
01:02:54,680 --> 01:02:57,120
Speaker 1: that tether doesn't default, Like that's a little bit of

1240
01:02:57,160 --> 01:02:59,320
Speaker 1: basing en update against the like tether is going to

1241
01:02:59,400 --> 01:03:02,040
Speaker 1: default philosophy, and it's a little bit of enoughing towards

1242
01:03:02,080 --> 01:03:05,760
Speaker 1: the like tether is worth a dollar philosophy. Um. So

1243
01:03:05,840 --> 01:03:08,080
Speaker 1: if you think about a CDs, right, twenty pips per month,

1244
01:03:08,360 --> 01:03:10,479
Speaker 1: that's what that's like three two and a half percent

1245
01:03:10,560 --> 01:03:14,080
Speaker 1: a year that this is trading under. You know, is

1246
01:03:14,160 --> 01:03:16,320
Speaker 1: that first of it's not an insane number, right, if

1247
01:03:16,360 --> 01:03:19,720
Speaker 1: there's a something that yeah, that's right, you know, if

1248
01:03:19,760 --> 01:03:22,160
Speaker 1: this we're training at twenty percent under that would be

1249
01:03:22,160 --> 01:03:24,080
Speaker 1: an insane number. Like that's the kind of thing where

1250
01:03:24,120 --> 01:03:26,600
Speaker 1: like it's been five years and tether hasn't imploded, like

1251
01:03:26,720 --> 01:03:29,240
Speaker 1: already your your your like your thesis is not looking

1252
01:03:29,280 --> 01:03:32,280
Speaker 1: so good, Like at two and a half percent a year,

1253
01:03:32,320 --> 01:03:33,920
Speaker 1: I think that's too big of a discount, But like

1254
01:03:34,240 --> 01:03:36,400
Speaker 1: I could be wrong on that, you know, I certainly

1255
01:03:36,440 --> 01:03:38,000
Speaker 1: like you know that you can't look at history and

1256
01:03:38,080 --> 01:03:41,280
Speaker 1: be like two percent years obviously too big of a discount.

1257
01:03:41,440 --> 01:03:43,800
Speaker 1: I would say that's tight versus their pr. Oh yeah,

1258
01:03:43,840 --> 01:03:46,560
Speaker 1: absolutely right, this is serve And that's sort of what's

1259
01:03:46,600 --> 01:03:48,600
Speaker 1: going on, right, Like it's sort of trading halfway between

1260
01:03:48,920 --> 01:03:51,320
Speaker 1: their pr on the one hand and the fact that

1261
01:03:51,440 --> 01:03:55,200
Speaker 1: that people successfully redeem it on the other hand. Right, Yeah,

1262
01:03:55,280 --> 01:03:57,520
Speaker 1: I think that like if you have like some experience

1263
01:03:57,600 --> 01:03:59,640
Speaker 1: and trap by like the fact that people have a

1264
01:03:59,640 --> 01:04:01,800
Speaker 1: success where he deemed it for some like single digit

1265
01:04:01,960 --> 01:04:05,040
Speaker 1: number of years is like only so incouraged. And I

1266
01:04:05,080 --> 01:04:07,000
Speaker 1: don't want to frame that as like this should make

1267
01:04:07,040 --> 01:04:10,080
Speaker 1: you infinitely encouraged about it or anything. And I really

1268
01:04:10,120 --> 01:04:12,320
Speaker 1: don't want to push back into people who think it

1269
01:04:12,320 --> 01:04:15,080
Speaker 1: should be at a two percent for your discount, not

1270
01:04:15,320 --> 01:04:17,560
Speaker 1: not not saying necessarily agree with them, but like I

1271
01:04:17,840 --> 01:04:19,960
Speaker 1: don't think they have a crazy position at all. Right,

1272
01:04:20,480 --> 01:04:22,360
Speaker 1: The thing I wanted to push back into the people

1273
01:04:22,400 --> 01:04:25,240
Speaker 1: who think it should have like at per your discount,

1274
01:04:25,720 --> 01:04:28,520
Speaker 1: you know, this is like just not worth anything like

1275
01:04:28,600 --> 01:04:30,920
Speaker 1: a dollar position, which like I think there's a lot

1276
01:04:30,960 --> 01:04:34,320
Speaker 1: of evidence that that position is like not really right, um,

1277
01:04:34,760 --> 01:04:36,280
Speaker 1: Whereas I think when you get to the questions like

1278
01:04:36,280 --> 01:04:38,160
Speaker 1: should this be worth a dollar or like a little

1279
01:04:38,200 --> 01:04:40,840
Speaker 1: bit less? Think of his commercial paper, right, like what

1280
01:04:40,960 --> 01:04:43,520
Speaker 1: you tell the commercial paper trade at you know, a

1281
01:04:43,640 --> 01:04:47,800
Speaker 1: sort of synthetic commercial paper, commercial paper whatever, you know,

1282
01:04:47,920 --> 01:04:49,560
Speaker 1: And the answer is like, I don't know, yeah, you

1283
01:04:49,600 --> 01:04:53,720
Speaker 1: know sort of like, um, I could tell we could

1284
01:04:53,800 --> 01:04:56,680
Speaker 1: we could talk about this for like another hour and

1285
01:04:56,720 --> 01:04:59,760
Speaker 1: a half probably, um, but I know Matt has to

1286
01:04:59,800 --> 01:05:03,200
Speaker 1: go because the Archagos Report is calling him and I

1287
01:05:03,360 --> 01:05:06,200
Speaker 1: have to go feed a puppy. We should try to

1288
01:05:06,280 --> 01:05:08,600
Speaker 1: Maybe we should make this like a regular catch up

1289
01:05:09,000 --> 01:05:10,400
Speaker 1: that we can do every once in a while. That

1290
01:05:10,440 --> 01:05:14,280
Speaker 1: would be fun. I would love to do that. Yeah,

1291
01:05:14,400 --> 01:05:16,680
Speaker 1: this is this is This is a real treat And

1292
01:05:17,040 --> 01:05:20,120
Speaker 1: thanks to both of you for coming out, and absolutely

1293
01:05:20,160 --> 01:05:22,320
Speaker 1: would love to do it again. Yeah, this is super fun.

1294
01:05:22,360 --> 01:05:25,400
Speaker 1: I totally do you great? Yeah, me as well, Thank

1295
01:05:25,480 --> 01:05:43,920
Speaker 1: you guys, Thanks gov Um well Joe. I enjoyed that conversation.

1296
01:05:43,960 --> 01:05:46,320
Speaker 1: It was nice to catch up with Sam as always,

1297
01:05:46,480 --> 01:05:48,600
Speaker 1: and I am very curious to see what he does

1298
01:05:48,760 --> 01:05:52,040
Speaker 1: with million dollars um. One thing that struck me was

1299
01:05:52,160 --> 01:05:55,640
Speaker 1: his sort of vision for the ultimate end state of

1300
01:05:55,760 --> 01:05:59,400
Speaker 1: the exchange, Like this idea of centralizing all your money

1301
01:05:59,560 --> 01:06:03,960
Speaker 1: in one place, not just as not just for your investments,

1302
01:06:04,040 --> 01:06:06,880
Speaker 1: so you're investing in stocks, in crypto, but also for

1303
01:06:07,040 --> 01:06:09,920
Speaker 1: payments like that was pretty intriguing. Yeah, I thought that

1304
01:06:10,040 --> 01:06:12,560
Speaker 1: was really interesting, and I, you know, it really does

1305
01:06:12,640 --> 01:06:15,200
Speaker 1: speak to the scope of the ambition. But again, you know,

1306
01:06:15,440 --> 01:06:18,960
Speaker 1: here's someone or here's an exchange that literally almost nobody

1307
01:06:19,000 --> 01:06:20,960
Speaker 1: had heard of a year ago, and now it's one

1308
01:06:21,000 --> 01:06:23,800
Speaker 1: of the most powerful players in the entire world. So

1309
01:06:23,960 --> 01:06:26,760
Speaker 1: it's like you're like kind of skeptical, like betting against it,

1310
01:06:26,960 --> 01:06:29,040
Speaker 1: and like, would it shocked me if a bunch of

1311
01:06:29,120 --> 01:06:32,080
Speaker 1: Americans had like there you know s P y E

1312
01:06:32,200 --> 01:06:33,920
Speaker 1: T F and t L T and all that and

1313
01:06:34,360 --> 01:06:37,200
Speaker 1: uh F t x U S one day uh based

1314
01:06:37,200 --> 01:06:39,400
Speaker 1: on the trajectory not I also thought that was like

1315
01:06:39,440 --> 01:06:42,280
Speaker 1: a really good episode just because, like, you know, a

1316
01:06:42,360 --> 01:06:46,360
Speaker 1: lot of these like crypto conversations, you know, they could

1317
01:06:46,360 --> 01:06:48,680
Speaker 1: be a little bit like it was just nice to

1318
01:06:48,760 --> 01:06:51,160
Speaker 1: like sort of like strip away or get past some

1319
01:06:51,280 --> 01:06:53,080
Speaker 1: of the whole conversation about what this is all for,

1320
01:06:53,640 --> 01:06:56,400
Speaker 1: which is again another time, but also just like how

1321
01:06:56,520 --> 01:06:59,280
Speaker 1: it really works, and I think learning a little bit

1322
01:06:59,320 --> 01:07:01,840
Speaker 1: about just like this idea of like how crypto like

1323
01:07:01,960 --> 01:07:04,240
Speaker 1: collapsed as a lot of this stuff like whether it's

1324
01:07:04,320 --> 01:07:07,200
Speaker 1: the clearinghouse and the exchange and the broker, it's all

1325
01:07:07,280 --> 01:07:10,120
Speaker 1: sort of flattened into one and thinking about the implications.

1326
01:07:10,240 --> 01:07:13,920
Speaker 1: That was very interesting to hear Matt and Sam sort

1327
01:07:13,960 --> 01:07:16,479
Speaker 1: of riff on riff on these topics. But yeah, also

1328
01:07:16,600 --> 01:07:19,800
Speaker 1: just weird to hear Matt Levine, of all people referred

1329
01:07:19,840 --> 01:07:23,120
Speaker 1: to the financial industry as trad five Like I was not.

1330
01:07:23,600 --> 01:07:26,160
Speaker 1: I was not ready for that. Um, but that kind

1331
01:07:26,200 --> 01:07:29,280
Speaker 1: of shows how far we've come. Um. The one other

1332
01:07:29,320 --> 01:07:31,680
Speaker 1: thing I would say is I still think there's an

1333
01:07:31,720 --> 01:07:36,200
Speaker 1: open question around tether and we are certainly not done

1334
01:07:36,440 --> 01:07:39,680
Speaker 1: discussing it on on the podcast, So we're gonna have to, um,

1335
01:07:40,040 --> 01:07:41,880
Speaker 1: We're gonna have to dig into that one a little

1336
01:07:41,920 --> 01:07:45,040
Speaker 1: bit more, I think. Yeah, I mean it's like it's interesting.

1337
01:07:45,760 --> 01:07:50,400
Speaker 1: Like I was surprised because just having followed um Sam

1338
01:07:51,200 --> 01:07:54,240
Speaker 1: and his colleagues and even last time, I got some

1339
01:07:54,480 --> 01:07:57,560
Speaker 1: answers to questions, but now I have more questions. Yeah,

1340
01:07:57,880 --> 01:08:00,200
Speaker 1: so we'll have to do another We'll collect all our

1341
01:08:00,320 --> 01:08:03,480
Speaker 1: questions and uh and get back to the listeners. Um.

1342
01:08:03,560 --> 01:08:05,520
Speaker 1: Shall we leave it there? Yeah, let's leave it there.

1343
01:08:05,800 --> 01:08:08,240
Speaker 1: All right. This has been another episode of the All

1344
01:08:08,320 --> 01:08:10,960
Speaker 1: Thoughts Podcast. I'm Tracy Alloway. You can follow me on

1345
01:08:11,120 --> 01:08:14,240
Speaker 1: Twitter at Tracy Alloway and I'm Joe Wisntal. You can

1346
01:08:14,280 --> 01:08:17,559
Speaker 1: follow me on Twitter at the Stalwart. Follow our guests

1347
01:08:17,880 --> 01:08:21,920
Speaker 1: on Twitter Sam bankman Fried He's at SBF Underscore f

1348
01:08:22,040 --> 01:08:25,360
Speaker 1: t X, and follow Matt Levine on Twitter at Matt

1349
01:08:25,520 --> 01:08:29,120
Speaker 1: Underscore Levine. And be sure to follow our producer Laura Carlson.

1350
01:08:29,280 --> 01:08:32,880
Speaker 1: She's at Laura M. Carlson. Followed the Bloomberg head of podcast,

1351
01:08:32,960 --> 01:08:36,519
Speaker 1: Francesco Levi at Francesca Today, and check out all of

1352
01:08:36,600 --> 01:08:40,760
Speaker 1: our podcasts at Bloomberg under the handle at podcasts. Thanks

1353
01:08:40,800 --> 01:09:02,160
Speaker 1: for listening to