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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Earlier this month, President Donald Trump invited some of the

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Speaker 2: biggest names in crypto to the White House.

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Speaker 3: Welcome to the first ever White House Digital Assas Summit.

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Speaker 2: Venture capitalist David Sachs was there. Trump has made him

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Speaker 2: the White House. AI and Cryptos are.

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Speaker 3: Like to have you say a few words, David.

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Speaker 4: Thank you, mister President. We're all here today because of

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Speaker 4: your leadership, your vision, and your generosity.

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Speaker 2: The Winklevoss twins were also on the invite list, Cameron

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Speaker 2: and Tyler, who run the crypto exchange Gemini.

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Speaker 4: Cameron, I think you said something earlier that I thought

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Speaker 4: was really profound. You said that a year ago, you

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Speaker 4: thought it would be more likely that you'd end up

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Speaker 4: in jail at the White House. Not to put you

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Speaker 4: on the spot because you didn't do anything wrong, but

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Speaker 4: that was the environment a year ago. So you guys

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Speaker 4: want to say something either one of you.

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Speaker 1: Sure that was actually Tyler you said that, but sorry,

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Speaker 1: I still get good stuff.

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Speaker 2: Crypto optimism soared as President Biden left office. Under his administration,

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Speaker 2: the regulators had been something of a thorn in the

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Speaker 2: side of the crypto industry. They brought lawsuits and undertook investigations,

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Speaker 2: but under President Trump, the Securities and Exchange Commission has

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Speaker 2: paused or walked back many of those actions. Trump, a

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Speaker 2: former crypto skeptic, is now a crypto booster an investor.

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Speaker 2: Bitcoin hid an all time high just shy of one

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Speaker 2: hundred and ten thousand dollars the day of his inauguration,

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Speaker 2: but it's been on something of a roller coaster ride

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Speaker 2: since then, at one point down as much as twenty

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Speaker 2: eight percent from its January peak. A general risk off

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Speaker 2: feeling in the markets lately has dampened some of the

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Speaker 2: initial enthusiasm for crypto and other risky assets, but some

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Speaker 2: Republicans have promised to pass crypto friendly legislation in the

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Speaker 2: first one hundred days of the Trump presidency. The broader

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Speaker 2: finance industry is watching all of this very closely, and

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Speaker 2: once a year every March, there's this get together in

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Speaker 2: South Florida called Boca, the International Futures Industry Conference.

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Speaker 5: The minute that the dates come out for this conference site,

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Speaker 5: I sign up right away.

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Speaker 2: That's Catherine Doherty. She covers banks and market structure for

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Speaker 2: Bloomberg and she made the trip to the conference.

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Speaker 5: It's quite a nerdy crowd. I would say it's a

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Speaker 5: bunch of market structure geeks. These are the guys that

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Speaker 5: are in charge of the plumbing of the futures industry.

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Speaker 5: But it really has expanded beyond just futures. So a

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Speaker 5: lot of the exchanges are here, the trading firms, some

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Speaker 5: of the clearing firms, which gets into post trade, like

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Speaker 5: it goes from the very start of a trade when

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Speaker 5: it's being entered, to a trade finishing and being processed.

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Speaker 5: All of the people that are in charge of that

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Speaker 5: system working are here down in Florida, and most notably

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Speaker 5: in the last few years, crypto has made its way

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Speaker 5: down here.

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Speaker 2: I'm David Gura, and this is the big take from

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Speaker 2: Bloomberg News Today. On the show, we catch up with

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Speaker 2: Catherine and Boca, where the crypto crowd was basking in

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Speaker 2: the South Florida sun, and this time around, the dynamics

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Speaker 2: have changed. It's a lot less Old Wall Street versus

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Speaker 2: the new crypto crowd, and there's a surge of interest

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Speaker 2: in how those two groups can find ways to work together.

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Speaker 2: I caught up with Bloomberg's Catherine Doherty last week as

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Speaker 2: the International Futures Industry Conference was wrapping up. She was

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Speaker 2: in a gilded ballroom in the Boca Ratone resort where

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Speaker 2: workers were starting to pack up.

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Speaker 6: This place is so large.

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Speaker 5: To get from one end of the resort to the other,

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Speaker 5: it takes about fifteen to twenty minutes to walk, So

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Speaker 5: actually you have to take that into account when you're

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Speaker 5: going to meet someone.

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Speaker 2: We sent her down to Florida with a microphone and

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Speaker 2: asked her for a crypto vibe check.

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Speaker 6: All right, I'm just trucking levels.

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Speaker 5: So if you would introduce you, and then I'd love

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Speaker 5: to hear how many Bocas you have been to.

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Speaker 7: My name is Walt Luken. I'm the CEO of FIA

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Speaker 7: and this is my twenty third Boca.

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Speaker 2: FIA is the trade group for the derivatives market.

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Speaker 5: So Walt, what would you say is the big theme

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Speaker 5: that you're picking up on talking to the participants of

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Speaker 5: this conference.

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Speaker 7: Well, a couple things. I think there is this super

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Speaker 7: trend that's happening about regulatory simplification. I think some of

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Speaker 7: the catalysts is the Trump administration, but you're seeing that

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Speaker 7: theme throughout the globe in Europe as well. I would

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Speaker 7: say the second is just the conflation of traditional finance

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Speaker 7: with new innovators that are coming into the space from

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Speaker 7: the crypto industry, from prediction markets. Those two things are

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Speaker 7: coming together. And I think everyone knows that crypto legislation

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Speaker 7: is going to happen this year in the US. So

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Speaker 7: how does that impact traditional finance and how can we

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Speaker 7: find the best market structure that may satisfy both.

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Speaker 2: What is it about this conference that keeps you coming back?

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Speaker 2: And I wonder how different the conference is this time

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Speaker 2: versus the ones you've been to in the past.

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Speaker 5: So this is my fourth year at BOCA my first

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Speaker 5: four years. Twenty twenty two was my first, and it

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Speaker 5: was a noteworthy one. This was the year that Sam

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Speaker 5: Bankman Freed was a keynote speaker, and he was the

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Speaker 5: king of the conference.

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Speaker 6: He was up and coming.

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Speaker 5: He at this point had been an established player in

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Speaker 5: the crypto industry, and Sam remember had come from a

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Speaker 5: trading firm, and because of that, he had a lot

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Speaker 5: of ideas that were starting to encroach in on the

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Speaker 5: traditional financial industry. So at this conference four years ago,

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Speaker 5: he was walking around the halls. He had his T shirt,

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Speaker 5: shorts and sneakers, and he had a lot of the

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Speaker 5: other FDx folks with him that were also in T shirts,

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Speaker 5: and everyone wanted a meeting.

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Speaker 6: But there were also some TIFFs.

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Speaker 5: Quite a noteworthy brawl, I would say, at the hotel

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Speaker 5: bar between the CEO of CME, which is the largest

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Speaker 5: and oldest US derivatives exchange based out of Chicago, and

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Speaker 5: the CEO of that company.

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Speaker 6: He confronted Sam.

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Speaker 2: That CEO is Terry Duffy, who's been on the board

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Speaker 2: of CME for thirty years. Later, in twenty twenty two,

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Speaker 2: Duffy would describe that moment on the On the Tape

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Speaker 2: podcast from Risk Reversal Media.

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Speaker 3: I had a meeting with Sam Bankman free for the

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Speaker 3: first time in March this past year. I never met

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Speaker 3: the man he asked to meet with me at a conference.

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Speaker 2: The conversation reportedly lasted for more than an hour.

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Speaker 3: I said to him, I said, you know what, You're

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Speaker 3: a fraud. You're an absolute fraud. You're supposedly worth twenty

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Speaker 3: six billion dollars and you're an altist. And I said,

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Speaker 3: if you're an altist at twenty six billion, how come

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Speaker 3: does that not a ten billion dollar donation going to

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Speaker 3: somebody right this moment in time? How about a fifteen

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Speaker 3: billion dollar donation. I said, you know what, I said,

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Speaker 3: my networth doesn't start with any bees. I'll give you

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Speaker 3: three to one that I have more money than you.

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Speaker 3: I said, I'll tell you what.

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Speaker 2: That blow up between Terry Duffy and Sam Bankman Free

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Speaker 2: happened in March of twenty twenty two. By November of

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Speaker 2: that year, FTX had collapsed.

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Speaker 5: So it wasn't actually very long after Sam made his

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Speaker 5: debut at this conference that his exchange ended up having

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Speaker 5: to file for bankruptcy, and the subsequent years crypto has

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Speaker 5: been quite absent.

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Speaker 2: The implosion of FTX had a ripple effect. Other crypto

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Speaker 2: companies collapsed, and it triggered a mass exodus of capital

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Speaker 2: from the industry and prompted a regulatory crackdown that's only

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Speaker 2: now loosening in Trump's second term. So far, Republicans have

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Speaker 2: introduced a bill to regulate stable coins that type of

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Speaker 2: crypto peg to another asset, say the dollar, gold, but

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Speaker 2: the scope of the bill is fairly limited and wouldn't

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Speaker 2: regulate most forms of crypto, and outside of legislation, there's

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Speaker 2: still an open question over which agency would be responsible

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Speaker 2: for crypto regulation. That the conference participants were trying to

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Speaker 2: gain amount, what any forthcoming regulation could look like.

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Speaker 5: How do we plan if there is regulation and we

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Speaker 5: can start to enter this market as US financial markets

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Speaker 5: and embrace crypto in a way, what does that look like?

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Speaker 5: And it's a lot of wait and see. But if

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Speaker 5: you wait too long and you're not in the planning process,

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Speaker 5: you might be left on the sidelines. I would describe

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Speaker 5: this year it feels like Kumboya.

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Speaker 6: There's this sense of how do we work together?

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Speaker 5: Four years ago, as I mentioned the crypto bros, we're

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Speaker 5: walking around these hallways. A lot of them were hosting

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Speaker 5: their booths and giving out swag, and you could tell

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Speaker 5: there was a difference between the old guard and the

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Speaker 5: newer digital asset blockchain developers, and you could quite literally

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Speaker 5: see it in their outfits. Now everyone is back to suits.

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Speaker 5: In many ways, they are embracing in the old guard.

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Speaker 5: They're wearing suits, maybe not a tie, and the old

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Speaker 5: guard is embracing them. And I think that image, that

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Speaker 5: visual is how I see the industry evolving.

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Speaker 6: It's this not us and them, but us together.

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Speaker 2: After the break, Catherine catches up with the guy who

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Speaker 2: confronted Sam Bankman freed. Catherine, you've described this confluence of

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Speaker 2: the Old Guard and the New Guard. And I know

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Speaker 2: that while you've been down there, you've been trying to

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Speaker 2: talk to people from both camps. Let's start with the

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Speaker 2: old Guard.

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Speaker 5: The best representation of the Old Guard is none other

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Speaker 5: than Terry Duffy, the CEO of CME.

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Speaker 2: So this is the guy who got into the fight

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Speaker 2: with Sam begman Freed.

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Speaker 5: He is the one that had the tiff with Sam

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Speaker 5: bankman Fried at the bar, and so Duffy is back.

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Speaker 3: How many bocas have I been to? Let's see, nineteen

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Speaker 3: ninety five was my first one, and I I don't

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Speaker 3: believe I missed any outside of the pandemic when they

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Speaker 3: held off. So let's add up those years and it

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Speaker 3: seems to be quite a few, so probably close to

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Speaker 3: thirty plus book as I've been to.

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Speaker 5: He's still running CME, and they offer crypto futures.

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Speaker 3: I think that crypto. From our standpoint, we haven't deviated

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Speaker 3: much from what we did in twenty seventeen. So we

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Speaker 3: listed bitcoin as you know, then we listed ether. Now

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Speaker 3: we just announced we're going to list Solana specifically.

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Speaker 2: CME has derivative products that allow its customers to speculate

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Speaker 2: on the price of all these coins without actually owning

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Speaker 2: the underlying cryptocurrencies.

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Speaker 5: So they've found a way to do this in a

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Speaker 5: regulated manner. They are a regulated exchange in the US,

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Speaker 5: and there's by no means of resistance. In many ways,

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Speaker 5: it's an embrace of the crypto industry. But Terry has

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Speaker 5: a lot to reflect on.

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Speaker 3: I think what's really important as we're into this new

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Speaker 3: administration of President Trump and his cabinet is to see

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Speaker 3: how they feel about the regulatory process of this cause

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Speaker 3: one of the things I can understand is when regulators

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Speaker 3: aren't quite sure if it should be approved or not approved,

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Speaker 3: so they do nothing, and then the horse runs out

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Speaker 3: of the barn. Then they got to put the horseback

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Speaker 3: in the barn.

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Speaker 2: So that's Terry, So he represents the old guard. How

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Speaker 2: about the new guard? Who did you talk to from

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Speaker 2: that group?

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Speaker 6: Yeah?

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Speaker 5: One of the other leaders of a firm called Digital Asset.

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Speaker 1: My name is Vall Russ. I'm the co founder and

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Speaker 1: CEO of Digital Asset, coming from New York and probably

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Speaker 1: Boca number eight for me.

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Speaker 5: His company has built a blockchain network, and a lot

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Speaker 5: of the conversation down here has been around market efficiency,

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Speaker 5: and someone like you've all talks about how blockchain as

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Speaker 5: a technology can be a use case for improving upon

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Speaker 5: that existing technology.

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Speaker 2: You've all also said that his customers are responding to

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Speaker 2: the Trump Administration's new more positive stance toward crypto.

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Speaker 1: I would say that under this administration, we are seeing

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Speaker 1: our customers having much more willingness to test this new technology,

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Speaker 1: where the lack of certainty around the regulatory framework before

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Speaker 1: created quite a lot of fear even to try to

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Speaker 1: innovate with this technology.

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Speaker 2: So you're looking at this conference as kind of a

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Speaker 2: microcosm for the broader industry's acceptance of crypto today. Are

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Speaker 2: there skeptics in the mix? Is this kind of emblematic

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Speaker 2: of a sea change that's taken place?

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Speaker 6: There are skeptics.

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Speaker 5: I think the big question mark that needs to be

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Speaker 5: answered is if the expectation is this is a friendlier

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Speaker 5: regulatory environment, which I think that's a pretty obvious statement

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Speaker 5: or something that everyone agrees on. The question then becomes

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Speaker 5: what does the regulation actually look like?

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Speaker 6: And it's quite hard for these.

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Speaker 5: Companies to plan in a way that they can start

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Speaker 5: taking action without that regulatory.

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Speaker 6: Roadmap in front of them.

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Speaker 5: So I think that's the skepticism that I hear here

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Speaker 5: is all right. I think there's a path, but that

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Speaker 5: path is still murky, so we got to be careful.

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Speaker 2: So you're seeing this embrace take place at this at

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Speaker 2: this important conference. How long is it going to take

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Speaker 2: to see whether or not this sticks if it becomes

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Speaker 2: something that, yes, is happening in microcosm there at this

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Speaker 2: conference in Boca, but finds its way to the broader industry.

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Speaker 6: The future of how this evolves, I think so much

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Speaker 6: of it.

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Speaker 5: If it was just up to the industry, it would

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Speaker 5: happen a lot faster, but it's not. The industry has

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Speaker 5: to work with regulators and the rules have to be

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Speaker 5: established in order for the action to then take place.

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Speaker 5: So I'd imagine it's going to happen faster than the

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Speaker 5: previous administration, but it's not, again, all up to these

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Speaker 5: business leaders.

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Speaker 2: What would that mean for the financial system in the

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Speaker 2: US and around the world. What does it look like?

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Speaker 2: How does it stand to change if this goes forward?

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Speaker 5: So I think that many participants describe it in two ways.

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Speaker 5: There's crypto trading, and we've already started to see that

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Speaker 5: infiltrate institutional finance with the introduction of crypto ETFs and

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Speaker 5: now we're seeing crypto options, and then you have the

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Speaker 5: conversation around blockchain and the use case of how do

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Speaker 5: you create these networks that many would just jump to

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Speaker 5: you and say this is tied to crypto or digital assets,

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Speaker 5: but blockchain specifically gets referenced by many of the banks

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Speaker 5: that I talked to bank leaders down here and the exchanges.

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Speaker 5: That's more of the use case and less of the

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Speaker 5: trading of an asset. And so I think that those

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Speaker 5: are the two buckets that folks are exploring down here

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Speaker 5: of what does the future look like? And I think

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Speaker 5: that there's going to be an evolution for both.

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Speaker 2: Catherine, it's great to talk to you. Thank you very much.

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Speaker 6: Thank you.

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Speaker 2: This is the Big Take from Bloomberg News. I'm David Gura.

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Speaker 2: This episode is produced by Alex tie. It was edited

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Speaker 2: by Tracy Samuelson, Stacy, Marie Ishmael, and Isis Almeida. It

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Speaker 2: was fact checked by Adriana Tapia and mixed and sound

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Speaker 2: designed by Alex Sagura. Our senior producer is Naomi Shaven.

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Speaker 2: Our senior editor is Elizabeth Ponso. Our executive producer is

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