WEBVTT 1 00:00:00.280 --> 00:00:03.160 As the head of Bicco, and you know we've got billions in custody. 2 00:00:03.439 --> 00:00:05.960 I periodically say this, I want people to hear it in the press. 3 00:00:06.000 --> 00:00:08.560 If you're a bad guy out there, like literally, you can come and 4 00:00:08.640 --> 00:00:14.880 kidnap me and you get nothing. So please don't like I do not actually 5 00:00:14.960 --> 00:00:18.640 have the ability to move the money at all, whether it's my personal funds 6 00:00:18.760 --> 00:00:30.320 or company funds. This content is brought to you by Uphold, which is 7 00:00:30.359 --> 00:00:34.600 a great crypto platform that I've been using since twenty eighteen. Uphold has all 8 00:00:34.640 --> 00:00:38.280 the top cryptocurrencies, Bitcoin and all the all coins. In fact, they 9 00:00:38.320 --> 00:00:42.399 have two hundred and sixty plus cryptocurrencies on their platform. You can also trade 10 00:00:42.479 --> 00:00:47.159 precious metals, stable coins, and thirty seven fiat currencies. In addition, 11 00:00:47.240 --> 00:00:52.119 they are available in over one hundred and fifty countries and this platform is fully 12 00:00:52.159 --> 00:00:55.920 reserved. They do audits so you can trust that your funds are saved. 13 00:00:55.920 --> 00:00:59.479 No commingling, no lending out your funds. If you'd like to learn more 14 00:00:59.520 --> 00:01:03.120 about Pold, please visit the link in the description. Welcome to the Thinking 15 00:01:03.120 --> 00:01:08.159 Crypto Podcast. Your home for cryptocurrency news and interviews with me Today is Mike 16 00:01:08.200 --> 00:01:12.719 Belshi, who's the co founder and CEO of Bitgo. Mike, it's great 17 00:01:12.760 --> 00:01:17.519 to have you back on. Nice to see you again, Tony, Mike. 18 00:01:17.560 --> 00:01:19.159 You know, I'm a big fan and we've talked over the years. 19 00:01:19.879 --> 00:01:25.239 Certainly appreciate your Web one point zero and two point zero background, and now 20 00:01:25.280 --> 00:01:29.319 you're doing great things in Web three and there's a lot to talk about. 21 00:01:29.359 --> 00:01:33.840 You guys at bitgo have been so busy. All good news. Let's start 22 00:01:33.879 --> 00:01:38.079 with the news that broke this morning, and that is your acquisition of Brassica. 23 00:01:38.319 --> 00:01:41.079 If I'm saying that right. Tell us about that and how you'll be 24 00:01:41.120 --> 00:01:44.680 working together. Yeah, sure, Yeah, we're very very happy. Look, 25 00:01:44.719 --> 00:01:49.400 we met a fantastic team in Brassica. They've been working on a slightly 26 00:01:49.439 --> 00:01:55.079 different path actually right, different from digital ass as. They're working more towards 27 00:01:55.159 --> 00:01:59.079 private equities. You know, there's a ton of work going on, not 28 00:01:59.239 --> 00:02:02.599 just with our industry, but also traditional firms are all talking about like how 29 00:02:02.640 --> 00:02:08.599 do we how do these this new technology affect like traditional finance, and Brassica's 30 00:02:08.599 --> 00:02:12.840 been tackling the private equity space, but they do it a little bit different 31 00:02:12.840 --> 00:02:17.039 way. So like bitco, they are an infrastructure provider. They're creating APIs 32 00:02:17.039 --> 00:02:22.159 that you can use and you can launch, you know, a completely digital 33 00:02:22.199 --> 00:02:29.199 for digital forward applications whatever it is you're building, white labeled embedded inside of 34 00:02:29.199 --> 00:02:31.680 your own stuff, but it's completely compliance on the back end. And now 35 00:02:31.680 --> 00:02:35.319 you can do that with private equity. So this is Reggae offerings, Reggae 36 00:02:35.360 --> 00:02:39.639 plus offerings completely you know, within the context of how we manage securities here 37 00:02:39.639 --> 00:02:42.879 in the United States. So they spend a bunch of time on that. 38 00:02:42.879 --> 00:02:46.400 They've got some big clients that are looking to be able to scale. So 39 00:02:46.479 --> 00:02:50.159 let me just give you a quick example. Like let's say, let's say 40 00:02:50.159 --> 00:02:55.360 you wanted to create a security for every baseball player in in the in the 41 00:02:55.400 --> 00:02:59.599 Major League Baseball, right, I mean, that's that's like a hard thing 42 00:02:59.639 --> 00:03:01.400 to do. There's a lot of securities issue. But guess what with the 43 00:03:01.439 --> 00:03:06.439 platform that Braska is built, you can actually make that happen pretty trivially. 44 00:03:06.479 --> 00:03:08.479 And they've got a transferation behind the scenes. It keeps track of, you 45 00:03:08.520 --> 00:03:12.840 know, the shares of the private equity that's being launched, and then they've 46 00:03:12.840 --> 00:03:15.879 got a custodian side by side with that, and then that can interface like 47 00:03:15.960 --> 00:03:19.280 the broker dealers, et cetera. So, look, the team at at 48 00:03:19.319 --> 00:03:23.240 Braska has been fantastic. They got a ton of experience with how do you 49 00:03:23.240 --> 00:03:27.319 build these things the right way, which is very similar to what Bicco's been 50 00:03:27.360 --> 00:03:31.080 doing. So they compliment the bico team very well. And we're now actually 51 00:03:31.080 --> 00:03:37.599 the first company to really be building a single house that can handle all kinds 52 00:03:37.639 --> 00:03:42.120 of alternative investments. So there's been a question is it going to come from 53 00:03:42.319 --> 00:03:45.800 the digital asset innovation side, is it going to be coming from the traditional 54 00:03:45.800 --> 00:03:49.520 finance side. Look, I know a lot of traditional finances looking at how 55 00:03:49.520 --> 00:03:52.159 to do this. They're looking at real world assets. They call it now 56 00:03:52.240 --> 00:03:55.960 previously called tokenization. How do you marry this stuff together? Bicco's doing that 57 00:03:57.000 --> 00:04:00.159 and we placed a big, a big flag in the ground on our claim 58 00:04:00.199 --> 00:04:05.039 for that today. Yeah, to your point, TRADFI Larry Fink a black 59 00:04:05.120 --> 00:04:10.080 Rock has been talking about tokenization, saying it's a future of finance. So 60 00:04:10.840 --> 00:04:15.199 you know, with this service, you're able to expand your product footprint. 61 00:04:15.319 --> 00:04:18.759 Obviously, you primarily have been a crypto custodian while at now you'll be able 62 00:04:18.800 --> 00:04:27.399 to handle tokenization and the issuing of assets on the blockchain. Does this summarize 63 00:04:27.480 --> 00:04:30.639 kind of you know, the the vision. Yeah, that's right. I 64 00:04:30.680 --> 00:04:32.759 mean, look in terms of real world assets, I think Bicco probably is 65 00:04:32.839 --> 00:04:38.600 the largest you know, tokenized issue with our wrap bitcoin product that actually is 66 00:04:38.800 --> 00:04:42.639 exactly that type of product. But I think when you look at the competing 67 00:04:42.680 --> 00:04:46.040 solutions away from Braska, they've looked a little bit too much at the technology 68 00:04:46.199 --> 00:04:50.120 and less like what's the problem we're trying to solve. So tokenization is an 69 00:04:50.160 --> 00:04:56.639 important thing for the future, but actually you got to remember that like private 70 00:04:56.839 --> 00:05:02.000 securities and and and whatnot have been lacking technology at all, you know, 71 00:05:02.000 --> 00:05:06.439 the pretty much devoid of technology. Go find me a tech forward you know, 72 00:05:06.839 --> 00:05:11.920 transferragement. Go find me a tech forward broker dealer that can launch these 73 00:05:11.920 --> 00:05:15.600 types of things at scale. They don't exist, but Brasica has built that, 74 00:05:15.759 --> 00:05:17.959 so we bring that together with Bicco. Look, the first thing we 75 00:05:17.959 --> 00:05:20.639 want to do is we always want to make sure we're working on customer problems, 76 00:05:20.720 --> 00:05:25.199 like what is the pain point you have? Oh, it's I want 77 00:05:25.240 --> 00:05:29.480 to be able to offer more of these at scale embedded into my own business 78 00:05:29.480 --> 00:05:31.560 in a technical way that runs twenty four to seven that's what we do. 79 00:05:31.759 --> 00:05:35.120 That's what braska does. They fit very well together. Now tell us about 80 00:05:35.519 --> 00:05:40.600 and this may be in the early stages and you're still going to you know, 81 00:05:40.720 --> 00:05:44.519 ramp up and expand this. But which blockchains do you plan to utilize 82 00:05:44.639 --> 00:05:46.560 or are you agnostic? You know, it just depends on the client's needs 83 00:05:46.639 --> 00:05:51.399 or or the type of asset. That's a great question. I think look, 84 00:05:51.519 --> 00:05:56.439 wrap bitcoin might be a good example here. I think you can look 85 00:05:56.439 --> 00:06:00.279 at some of the other big stable clients as to how they're operating. So 86 00:06:00.319 --> 00:06:04.319 we run you know, bitcoin on a number of chains today, pretty much 87 00:06:04.360 --> 00:06:10.240 every blockchain wants to have a wrapped form of wrap bitcoin to utilize, you 88 00:06:10.240 --> 00:06:15.439 know, as part of their TVL mechanism in the various defile applications. So 89 00:06:15.480 --> 00:06:21.240 we're taking the approach where we just issue that directly. There's some newer technologies, 90 00:06:21.279 --> 00:06:27.639 you know, there's like layer zero wormhole that moves some of this into 91 00:06:28.040 --> 00:06:31.439 smart contracts. We have not decided to move forward with that yet because at 92 00:06:31.439 --> 00:06:35.800 the end of the day, we're fiduciary for this money, right and you 93 00:06:35.800 --> 00:06:40.079 know, there's a lot of footprint risk on some of the smart contract work 94 00:06:40.079 --> 00:06:43.079 that's out there. I'm not trying to discredit those protocols. I'm just trying 95 00:06:43.120 --> 00:06:46.279 to say, like, look, it's a different level when you've got billions 96 00:06:46.319 --> 00:06:48.480 of dollars of asset at stake and you really have to manage the risk for 97 00:06:48.519 --> 00:06:51.759 that. So we will get there, and then those will help make it 98 00:06:51.839 --> 00:06:56.920 even more seamless. But at least for now, we're doing more of it, 99 00:06:56.920 --> 00:07:00.759 we deploy it on each chain, and the same thing is I expect 100 00:07:00.800 --> 00:07:03.439 will be true for private securities. Again, though, I think you've got 101 00:07:03.480 --> 00:07:10.920 to focus on the use case. So for the issuers of these private securities, 102 00:07:10.959 --> 00:07:13.439 what are they trying to accomplish? Do they want to have it on 103 00:07:13.519 --> 00:07:17.399 multiple chains? That answer will vary depending on the use case that they're building. 104 00:07:17.759 --> 00:07:19.720 Do they want to put on one block chain? Do they just want 105 00:07:19.720 --> 00:07:21.959 to have digital access and they're going to keep it all kind of in a 106 00:07:21.959 --> 00:07:26.959 private network. All of these are possible. I'd like to think that one 107 00:07:26.959 --> 00:07:30.240 of the strengths of bicco, why we've been around for ten plus years now, 108 00:07:30.519 --> 00:07:33.639 where I've raised so little money, is because we're very commercial in our 109 00:07:33.680 --> 00:07:39.079 approach, and that means understand your clients problems, help them figure out how 110 00:07:39.120 --> 00:07:43.199 to solve those and then you know that always ends up having good success in 111 00:07:43.240 --> 00:07:46.240 the end. Yeah, absolutely, Now, Mike, there was also some 112 00:07:46.279 --> 00:07:50.879 other big news where you got an investment from cash handling firm Brink, And 113 00:07:51.360 --> 00:07:55.399 this piqued my interest because I've seen the bring trucks, you know, drive 114 00:07:55.480 --> 00:07:59.000 around throughout the United States. You know, if you're near a bank or 115 00:07:59.000 --> 00:08:03.319 whatever it may be, tell us about this investment, how you'll be working 116 00:08:03.360 --> 00:08:07.399 together, and you know, is Brink looking to or maybe what's your crypto 117 00:08:07.480 --> 00:08:11.720 strategy if they have one. Yeah, look, so breaks does physical security 118 00:08:13.759 --> 00:08:18.279 and anyone that is holding large amounts of crypto assets. Even though we use 119 00:08:18.279 --> 00:08:22.240 cryptography, even though we take the keys and we split them thousands of miles 120 00:08:22.279 --> 00:08:24.759 apart, there's still a physical aspect to it. You know, you can't 121 00:08:24.800 --> 00:08:30.360 have someone break into a vault somewhere and then steal some hardware devices and then 122 00:08:30.399 --> 00:08:33.679 have all the time in the world to go and hack those devices. So 123 00:08:33.720 --> 00:08:35.879 physical security is a key part. I've said for years. You know, 124 00:08:35.919 --> 00:08:41.879 we blend a combination of physical security controls along with virtual ones, meaning software 125 00:08:41.919 --> 00:08:45.879 as part of how we provide our cold storage. By the way, there 126 00:08:45.919 --> 00:08:50.240 was some question about you know, some of the ETFs we're using like single 127 00:08:50.240 --> 00:08:54.399 signature addresses, right, and it's in cold storage with certain vendors, not 128 00:08:54.440 --> 00:08:58.320 b Go. But you know, where are those keys held and how are 129 00:08:58.360 --> 00:09:01.679 they physically security? And if it really is just a single key somewhere, 130 00:09:03.080 --> 00:09:05.200 whether it's printed on paper or whatnot, you know, is that vulnerable to 131 00:09:05.399 --> 00:09:11.600 physical security threats potentially? Look, I'm not trying to say what I don't 132 00:09:11.600 --> 00:09:13.159 know. I don't know how those things are stored. It's not a BICHO, 133 00:09:13.279 --> 00:09:16.240 but at Bicco we take we take this very seriously. So yeah, 134 00:09:16.240 --> 00:09:20.440 look Brinks and Bicco, they're going to be handling some of our physical security 135 00:09:20.440 --> 00:09:24.679 components with us. Some of this is boring stuff, you know, armed 136 00:09:24.679 --> 00:09:31.039 guards and and things like that, but it's still critical nonetheless. Yeah, 137 00:09:31.200 --> 00:09:35.120 and I know the amount was not disclosed as far as investment, Is that 138 00:09:35.159 --> 00:09:39.559 correct? What are you able to tell us about that? Yeah, we 139 00:09:39.600 --> 00:09:45.080 didn't disclose it. It's a relatively small investment. But we're really really honored 140 00:09:45.080 --> 00:09:48.279 to have kind of their support as an investor at Bicco. Of course. 141 00:09:48.759 --> 00:09:54.480 Awesome, And there was also news a Bitgo being granted an in principle approval 142 00:09:54.519 --> 00:10:00.960 from the Monetary Authority of Singapore for a major payment institutional life and tell us 143 00:10:01.000 --> 00:10:03.919 about your expansion there and as well as other plans to expand this year. 144 00:10:05.399 --> 00:10:09.519 Yeah, so look, I mean, if you want to step back a 145 00:10:09.559 --> 00:10:13.360 little bit before I answer that question. You know, there's a lot of 146 00:10:13.399 --> 00:10:18.200 focus on regulatory clarity here in the United States. How do we offer products, 147 00:10:18.240 --> 00:10:22.799 whether it's custodianship, whether it's trading in the digital asset space, in 148 00:10:22.840 --> 00:10:28.080 a way that fits within the model that our regulators are comfortable with. From 149 00:10:28.200 --> 00:10:33.840 Bicco's view, we think that actually we have a very clear path that is 150 00:10:35.320 --> 00:10:37.519 not at odds with our regulators, not at odds with our clients, not 151 00:10:37.600 --> 00:10:41.879 at odds with our investors, And we're trying to help make it simpler to 152 00:10:41.879 --> 00:10:45.919 think about the future of finance, like what should the future structure look like? 153 00:10:46.000 --> 00:10:50.360 So so let me answer this by first breaking down what regulatory is, 154 00:10:50.360 --> 00:10:54.039 because it's a it's a small word, but it encompasses a lot. And 155 00:10:54.679 --> 00:10:58.720 when it comes to regulatory I break it down into three groups. Three groups. 156 00:11:00.879 --> 00:11:05.240 Number one is like law enforcement related regulation, So this is aml KYC 157 00:11:05.360 --> 00:11:11.120 transaction monitoring, This sanctions controls, and those types of things. From this 158 00:11:11.320 --> 00:11:18.720 perspective, frankly, the players like Bicco and coinbase in the space are doing 159 00:11:18.759 --> 00:11:22.879 the best job of this of any financial institution, whether it's digital, asset 160 00:11:22.960 --> 00:11:28.120 or otherwise. This is because we're using technology first. This is because we 161 00:11:28.200 --> 00:11:33.679 know we've got a target on our back from certain parties. The law enforcement 162 00:11:33.759 --> 00:11:37.879 part in spite of what some lawmakers may say, is actually really under control. 163 00:11:37.879 --> 00:11:41.320 And in Bicco in particular, we're an institutional company, so we work 164 00:11:41.360 --> 00:11:46.480 with institutions more in the retail and from that purposes, this is covered. 165 00:11:46.039 --> 00:11:50.840 The second area, which you hear a lot about is investor protection. This 166 00:11:50.960 --> 00:11:56.080 is largely the task of the SEC, and you know, this is where 167 00:11:56.080 --> 00:12:01.240 you hear all this regulatory polarity. So like, if I'm selling you investment 168 00:12:01.320 --> 00:12:05.360 product, did I disclose it properly? Am I pumping it to you while 169 00:12:05.440 --> 00:12:11.000 dumping it in the back? Is the market manipulatable by others or by me? 170 00:12:11.360 --> 00:12:13.879 You know, these are questions the SEC deals with to make sure that 171 00:12:15.000 --> 00:12:18.039 investors know what they're getting. I do agree it's a very important thing, 172 00:12:18.240 --> 00:12:22.600 and you know the SEC was successful. I think that's been over a year 173 00:12:22.639 --> 00:12:28.080 now. But shutting down Library token. I don't know anybody that held Library, 174 00:12:28.080 --> 00:12:31.240 but I'm sure there were some investors that you know, the SEC saved. 175 00:12:31.679 --> 00:12:35.360 But the reason I'm a little bit sarcastic about that is because of the 176 00:12:35.399 --> 00:12:39.720 third area of regulation, which most people don't fully understand, but it's the 177 00:12:39.759 --> 00:12:46.759 most important, and that is regulating market structure. So the way our markets 178 00:12:46.799 --> 00:12:52.120 work in the stock market, the way our derivatives markets work with CFTC. 179 00:12:54.519 --> 00:13:00.639 Obviously, these have been established over decades, and it's the regulators are tasked 180 00:13:00.639 --> 00:13:05.000 with making sure they understand what each participant is doing and what risks that participant 181 00:13:05.039 --> 00:13:09.600 is taking, so that no matter what risks are in play, the market 182 00:13:09.639 --> 00:13:13.799 will not go down. That is, one player can't knock out the entire 183 00:13:13.840 --> 00:13:18.720 market. This makes sense, right, And of course, where regulators failed 184 00:13:18.799 --> 00:13:24.200 us frankly in the last year is FTX. FTX had no market structure. 185 00:13:24.200 --> 00:13:28.000 They were doing everything. They were the exchange, they were the buyer's broker, 186 00:13:28.039 --> 00:13:31.360 the seller's broker, the clearinghouse, the custodian, the bank, and 187 00:13:31.399 --> 00:13:35.840 then all it took was one fraudster, right, and he was able to 188 00:13:35.879 --> 00:13:39.600 steal billions of dollars right, So The reason I hit this so hard is 189 00:13:39.639 --> 00:13:46.679 because that is the most important regulatory risk for regulators and legislators to get their 190 00:13:46.679 --> 00:13:52.960 heads around, and yet they're not really doing it. They're so focused on 191 00:13:52.000 --> 00:13:56.080 this thing with investor protection at the SEC, which is important. I'm not 192 00:13:56.120 --> 00:14:01.200 trying to deny that. But in the marketst's your case. The whole market 193 00:14:01.240 --> 00:14:05.159 goes down and people loves billions. And in the case of you know, 194 00:14:05.360 --> 00:14:07.879 a single you know investment, yes it's bad. I don't want anyone ripped 195 00:14:07.879 --> 00:14:11.720 off. It should be disclosed and that should be all proper. But it's 196 00:14:11.799 --> 00:14:13.399 a much smaller thing. It's only it's only a one off, right, 197 00:14:13.840 --> 00:14:20.360 So all right, Now back to your question about Singapore, where Bicco's got 198 00:14:20.440 --> 00:14:26.159 building blocks, which regulators have no issue with. We do custody, we 199 00:14:26.279 --> 00:14:28.879 keep the assets safe, and we work with good players. That's all we 200 00:14:28.960 --> 00:14:33.440 do. Right, Apple's giving me a thumbs up there, all right, 201 00:14:35.000 --> 00:14:39.000 So, uh, it's very basic and we're not we're not at odds with 202 00:14:39.000 --> 00:14:43.519 anyone. The second thing that we do as a custodian is escrow. And 203 00:14:43.639 --> 00:14:48.679 you know, you think of escrow as a real estate transaction. You think 204 00:14:48.720 --> 00:14:50.360 of it as like a thirty day thing. I think of it as like 205 00:14:50.399 --> 00:14:56.519 a three millisecond thing. You and I enter into a trade somewhere outside of 206 00:14:56.519 --> 00:14:58.679 Bicco, has nothing to do with Bicco. We enter into escrow with Bicco. 207 00:14:58.759 --> 00:15:01.679 You've fund at millisecond one, I fund at millisecond two, and we 208 00:15:01.720 --> 00:15:07.600 close the whole thing out at millisecond three. That's escrow. That's settlement. 209 00:15:07.039 --> 00:15:13.080 That settlement with the technology that we get when we put technology first instead of 210 00:15:13.120 --> 00:15:18.519 thinking about how the market structure from tradition markets evolved over the last hundred years, 211 00:15:18.519 --> 00:15:22.080 they didn't have the ability to do real time escrow when they came up 212 00:15:22.080 --> 00:15:28.399 with our current markets. All right, When we talk with regulators about custodians 213 00:15:28.480 --> 00:15:33.879 offering escrow as a mechanism post trade settlement as the future of market structure, 214 00:15:33.720 --> 00:15:39.039 the regulation delighted. There's actually no ambiguity. They're like, yeah, this 215 00:15:39.120 --> 00:15:41.440 is great, this is what we want our custodians to do. And we 216 00:15:41.519 --> 00:15:45.200 talk with regulators here in the US. We talked with the regulators in Germany 217 00:15:45.279 --> 00:15:50.559 under a baffin license. Singapore, we talked with Dubai et cetera. So 218 00:15:50.919 --> 00:15:56.519 Bicco is the only company that has I think maybe even more than one. 219 00:15:56.519 --> 00:16:03.559 Maybe coinbase has more than one custodian globally, but we have eight I guess 220 00:16:03.600 --> 00:16:08.320 custody licenses around the globe today. And this is all part of a long 221 00:16:08.399 --> 00:16:14.240 term initiative for how do we allow regulators in each of the regions, whether 222 00:16:14.279 --> 00:16:19.759 it's Europe or the US or Asia, to be able to regulate their clients, 223 00:16:19.840 --> 00:16:25.639 keep the money in their region, have them trade globally with known good 224 00:16:25.720 --> 00:16:30.399 participants, enter into settlements through escro mechanisms which again are easy to regulate and 225 00:16:30.480 --> 00:16:37.360 understand, and pieces altogether. So that's this is the big of Go network 226 00:16:37.360 --> 00:16:41.320 that we're building. It starts out with some simple stuff. It's operating today. 227 00:16:41.440 --> 00:16:44.080 Volumes are increasing, you know, on a week over week basis. 228 00:16:44.120 --> 00:16:48.320 We're really pleased with it. But this multi custodial initiative is how we make 229 00:16:48.840 --> 00:16:55.159 a global market. And just one last point, you know, regulators up 230 00:16:55.240 --> 00:17:00.919 until digital assets have largely concerned themselves locally or regionally, like it or not. 231 00:17:02.399 --> 00:17:07.319 The Internet, and now the blockchain connects people around the world, right 232 00:17:07.559 --> 00:17:12.920 Suddenly, the ability to regulate simply buy borders is much much harder, and 233 00:17:12.960 --> 00:17:17.119 of course this is a problem that's been coming. You know, just like 234 00:17:17.160 --> 00:17:21.559 the Internet opened up information and now you've got the Great Firewall in China, 235 00:17:21.599 --> 00:17:26.480 you've got other information restrictions in Iran and other countries. It's being talked about 236 00:17:26.559 --> 00:17:30.960 right now for you know, what the US wants to censor. Once you 237 00:17:30.000 --> 00:17:33.640 have the Internet, people have the ability to globally communicate. Of course, 238 00:17:33.680 --> 00:17:37.279 the regulation around that becomes tricky. The exact same thing that is happening for 239 00:17:37.400 --> 00:17:41.599 money, the Internet of money. We've heard before, it's here. We're 240 00:17:41.640 --> 00:17:45.079 trying to piece that together in a way that's super easy. So anyway, 241 00:17:45.319 --> 00:17:51.480 Singapore is a critical strategy here. Singapore has for a long time been a 242 00:17:52.039 --> 00:17:56.640 forward thinking regulator in terms of how monetary systems can be built put together, 243 00:17:57.599 --> 00:18:00.680 and anyway, we're looking forward to working with them and that that's what that 244 00:18:00.720 --> 00:18:06.519 license is about. You know, speaking of global markets as you're putting, 245 00:18:06.599 --> 00:18:15.000 you know, clearly explaining it and the analogous to communications via the Internet, 246 00:18:15.119 --> 00:18:22.279 what is your outlook for that global market? Is it with the you know 247 00:18:22.319 --> 00:18:25.960 the context of tokenization, stocks, bonds, real estate and all these things 248 00:18:26.119 --> 00:18:30.640 being tokenized on the blockchain, do you see a truly global market where there's 249 00:18:30.440 --> 00:18:36.079 fractionalization twenty four to seven trading, and that could be in any part of 250 00:18:36.119 --> 00:18:41.799 the world and participate. I could buy a share a token of a real 251 00:18:41.880 --> 00:18:45.640 estate property in Manhattan, and it could be in some other part of the 252 00:18:45.640 --> 00:18:51.119 world. Is that something that you think is realistic? I mean, of 253 00:18:51.119 --> 00:18:53.200 course it is, and the technology can certainly do it. We know how 254 00:18:53.200 --> 00:18:59.640 to do it. It's actually a less risk endeavor when you make it all 255 00:18:59.640 --> 00:19:03.000 real time than when you don't. You know, we talked, you know, 256 00:19:03.039 --> 00:19:06.519 as the ETFs were launched just last month, how did the flows of 257 00:19:06.599 --> 00:19:11.519 money work? You remember that, Like, you've got the investors that are 258 00:19:11.519 --> 00:19:15.599 buying through their brokers and it's a T plus two settlement to actually make the 259 00:19:15.640 --> 00:19:19.440 transaction. But wait a minute. If the ETF is supposed to track the 260 00:19:19.519 --> 00:19:25.200 price of bitcoin for real time for when the investor bought, but the cash 261 00:19:25.200 --> 00:19:30.240 hasn't flowed to the actual ETF yet, how does that work right? And 262 00:19:30.319 --> 00:19:34.480 the answer is a complex set of buffers, risk management, et cetera to 263 00:19:34.519 --> 00:19:38.279 piece it all together. So ironically, you know, it's great that we 264 00:19:38.279 --> 00:19:42.559 have the ETFs in play, right. It creates a it enables a massive 265 00:19:42.559 --> 00:19:48.599 distribution channel into bitcoin which previously didn't exist. But it's really taking you know, 266 00:19:48.640 --> 00:19:53.279 a Ferrari and converting it back into a fiat. Sorry, I shouldn't 267 00:19:53.319 --> 00:19:56.240 use the word fiat has overlapped, but it's like turning into a Volkswagon. 268 00:19:56.319 --> 00:20:02.160 Right. We have this real time mark market that trades bitpoint all around the 269 00:20:02.160 --> 00:20:06.960 globe twenty four to seven. It's got lower risk because everything is pre funded. 270 00:20:07.319 --> 00:20:11.359 And you now take it into this ETF market which only runs Monday through 271 00:20:11.400 --> 00:20:15.480 Friday nine to five and closes at four pm, you know, New York 272 00:20:15.559 --> 00:20:19.880 time, like what, so you know we've gone backwards. The reason that 273 00:20:21.039 --> 00:20:26.519 every bank, every broker, uh, you know in America has some amount 274 00:20:26.680 --> 00:20:30.960 of exploration going into digital assets, tokenization, real world assets, whatever you 275 00:20:30.000 --> 00:20:33.480 want to call it today is because they know, of course, we can 276 00:20:33.519 --> 00:20:38.000 do better. And you know, we've witnessed this as we've seen some of 277 00:20:38.039 --> 00:20:45.359 the traditional financial partners start to dabble with crypto over the last ten years. 278 00:20:45.720 --> 00:20:48.480 We usually run into legacy systems that were built, you know, twenty thirty 279 00:20:48.559 --> 00:20:52.640 years ago, and they're like, ooh, how do we record a transaction 280 00:20:52.759 --> 00:20:56.799 that happened on a Saturday? And they've got to go replumb for that. 281 00:20:56.240 --> 00:21:00.160 So all right, anyway, yes, I see, there's there's no doubt 282 00:21:00.160 --> 00:21:06.079 that our markets get more seamless, more connected, and more real time. 283 00:21:06.559 --> 00:21:08.599 To your point about the bigcoin's body TF, yeah, I've been thinking about 284 00:21:08.599 --> 00:21:12.640 it as well. Right, they're making bitcoin part of equities, and it's 285 00:21:12.720 --> 00:21:18.839 like it's now in that category versus digital assets and so forth. And do 286 00:21:18.880 --> 00:21:22.839 you think you know, there's going to be maybe a boomerang effect where okay, 287 00:21:22.880 --> 00:21:25.880 it goes out to tratify, but eventually it'll come back on chain where 288 00:21:25.880 --> 00:21:30.039 you have ETFs on chain. But I don't know about that. Look, 289 00:21:30.079 --> 00:21:33.440 I think there's pros and cons of both models. So you know, I 290 00:21:33.519 --> 00:21:37.839 criticize the ETF, but let's criticize the whole it yourself path for a moment, 291 00:21:38.319 --> 00:21:42.319 you know. I mean in terms of just individuals holding key material, 292 00:21:44.559 --> 00:21:48.200 it's still really tough. Uh, most people don't know how to do it. 293 00:21:48.640 --> 00:21:51.960 I think the next generation is going to get better at it. I 294 00:21:51.960 --> 00:21:56.559 think we as technology service providers are getting better at it. But human nature, 295 00:21:56.640 --> 00:22:00.160 when it's you know, kind of your own thing, we take short 296 00:22:00.160 --> 00:22:04.400 cuts. You know. This is where like institutions running sock processes and all 297 00:22:04.440 --> 00:22:08.359 of these boring things that slow us down. It actually does matter. It's 298 00:22:08.359 --> 00:22:12.119 really important to make sure that you got your backup stored properly. So here's 299 00:22:12.240 --> 00:22:18.240 here's for the folks that are really big believers in self custy. And what 300 00:22:18.319 --> 00:22:22.119 I love about, you know, the crypto mark is that you can have 301 00:22:22.240 --> 00:22:26.400 both. You can actually have self custy and you can have institutional custoding. 302 00:22:26.440 --> 00:22:30.559 They both work, and you're on a level playing field between these two parties. 303 00:22:30.079 --> 00:22:37.039 But when you are holding it yourself, it's easy to think about like, 304 00:22:37.119 --> 00:22:38.799 oh, hey, you know, I've got you know, three percent 305 00:22:38.839 --> 00:22:42.279 of my net worth in bitcoin, and I've got a ledger and I printed 306 00:22:42.319 --> 00:22:45.480 out of the backup and it's in the safety deposit box and I know how 307 00:22:45.480 --> 00:22:49.640 to do it. It's a different story when it's ninety percent of your net 308 00:22:49.720 --> 00:22:53.079 worth and you're thinking, you know, something tragic could happen to me, 309 00:22:53.119 --> 00:22:57.359 and I wanted to go to my family tomorrow or whatever. Suddenly self custody 310 00:22:57.440 --> 00:23:02.319 at ninety percent is different. And you know this to be true just by 311 00:23:02.359 --> 00:23:04.240 the fact that you use a bank. Right if you really thought that holding 312 00:23:04.319 --> 00:23:10.839 cash was more fun than than having someone else secured for you, you would 313 00:23:10.839 --> 00:23:12.400 do that, but we don't want to put bars on our windows, right. 314 00:23:12.440 --> 00:23:15.880 We don't want to have to have safes in our house. We don't 315 00:23:15.880 --> 00:23:18.920 want to have to have the constant physical threat that goes with it. So 316 00:23:18.480 --> 00:23:22.079 look, I'm not saying these are insurmountable problems. I'm just pointing out that, 317 00:23:22.200 --> 00:23:26.200 like you could do a nice compare and contrast, and you can see 318 00:23:26.200 --> 00:23:29.720 some places where ETFs really win, and you can see some places where self 319 00:23:29.720 --> 00:23:33.359 custody really wins on the ETF. Though it is kind of funny, like 320 00:23:33.759 --> 00:23:38.279 you know, if the market starts to really move on a Saturday or Sunday. 321 00:23:38.319 --> 00:23:41.720 And by the way, I go back to June twelfth, twenty twenty 322 00:23:41.720 --> 00:23:47.319 two, when Celsius was collapsing, there's a lot of market move and if 323 00:23:47.359 --> 00:23:49.440 you're locked in an ETF, you're not going to be able to do anything 324 00:23:49.519 --> 00:23:53.359 until Monday, so you're only going to get in after the damage and carnage 325 00:23:53.400 --> 00:23:57.119 has been had. Ye. It's a great point, Mike, and a 326 00:23:57.119 --> 00:24:00.400 lot of what you're saying I've experience. And it's like having to show my 327 00:24:00.440 --> 00:24:06.279 wife how to use a ledger because my self custoding majority of my crypto and 328 00:24:06.440 --> 00:24:11.119 without giving numbers, it is a good amount. And you know, having 329 00:24:11.200 --> 00:24:14.759 all these things and like you're saying, backing up in a safe and all 330 00:24:14.839 --> 00:24:18.480 that. Sometimes I think it would be really easy if I have a institution 331 00:24:19.039 --> 00:24:22.640 that I can just leave it there and then if anything ever happens to me, 332 00:24:23.119 --> 00:24:26.960 my family they can easily access those funds. My wife wouldn't have to 333 00:24:27.000 --> 00:24:30.599 go crazy trying to figure out all this stuff which is brand new to her. 334 00:24:32.720 --> 00:24:34.440 Well. Look, I mean, as the head of BICCO and you 335 00:24:34.480 --> 00:24:37.680 know, we've got billions in custody. I periodically say this. I want 336 00:24:37.759 --> 00:24:40.880 people to hear it in the press. If you're a bad guy out there, 337 00:24:40.880 --> 00:24:44.799 like literally you can come and kidnap me and you get nothing, So 338 00:24:45.680 --> 00:24:49.559 please don't like I do not actually have the ability to move the money at 339 00:24:49.559 --> 00:24:56.319 all, whether it's my personal funds or company funds. And I think as 340 00:24:56.319 --> 00:25:00.519 we start to get to large amounts, especially if we end up in a 341 00:25:00.519 --> 00:25:03.880 strange place, sorry to be pessimistic, but economically in the US in the 342 00:25:03.920 --> 00:25:07.240 next few years, I mean, we could start to see some real physical 343 00:25:07.279 --> 00:25:11.240 threats coming in. I'm not trying to pimp a book here, I just 344 00:25:11.480 --> 00:25:15.400 I hope everybody stays cautious out there, gets the right makes the security help. 345 00:25:15.880 --> 00:25:19.119 If you do have large amounts of asset, you know, you definitely 346 00:25:19.119 --> 00:25:25.240 should should think about a lot of different aspects, including physical maybe call it 347 00:25:25.359 --> 00:25:30.039 brinks. Sure, yeah, no, no, that's great advice. You 348 00:25:30.039 --> 00:25:33.039 know you mentioned before the market structure, right, and that is so important. 349 00:25:33.319 --> 00:25:37.480 There are a couple of bills in the House, couple in the Senate. 350 00:25:37.759 --> 00:25:41.000 In the House, there is a market structure bill, which I think 351 00:25:41.079 --> 00:25:45.240 addresses some of what you were talking about. You know, what's your outlook, 352 00:25:45.319 --> 00:25:49.000 Mike. You know we've got the election coming up, you got the 353 00:25:49.079 --> 00:25:52.880 SEC they see how these everybody's still trying to figure these things out. Do 354 00:25:52.920 --> 00:25:57.079 you think we see regulations past this year or next year and what that might 355 00:25:57.119 --> 00:26:03.759 look like after the election. Look, the good news is that we have 356 00:26:03.400 --> 00:26:08.039 legislators thinking about what needs to change, and it's going to take a few 357 00:26:08.079 --> 00:26:11.839 iterations, a few drafts before they get it right. So I don't think 358 00:26:11.839 --> 00:26:15.160 it's this year. I think it's probably more like twenty twenty five, maybe 359 00:26:15.160 --> 00:26:19.039 twenty twenty six before we see anything. Look. On the good news side, 360 00:26:19.079 --> 00:26:25.279 though, we also know how to handle these assets today. I think 361 00:26:25.279 --> 00:26:29.640 it's really that number two, the uh, you know, investor protection regulatory 362 00:26:29.680 --> 00:26:34.000 clarity that's needed. The SEC needs to be more specific about, you know, 363 00:26:34.039 --> 00:26:38.400 which types of assets really fall under their reign and which don't. Obviously 364 00:26:38.440 --> 00:26:42.680 they've made some claims, there's been some disputes, the courts have said no, 365 00:26:42.920 --> 00:26:47.400 you're not right, and so it's clear there's ambiguity. I mean, 366 00:26:47.720 --> 00:26:51.319 anybody can sit here and say like it's all perfectly clear. But given the 367 00:26:51.359 --> 00:26:55.319 amount of credible voices that are coming out and saying, hey, we would 368 00:26:55.400 --> 00:26:59.640 like this more more easily spelled out. What I believe is that we should 369 00:26:59.640 --> 00:27:04.599 have regular leaders that are here to help America American business as much as American 370 00:27:04.640 --> 00:27:08.640 investors. And I'm not trying to say business at the expense of investors. 371 00:27:08.640 --> 00:27:11.480 I think the two go hand in hand. Right. If we have a 372 00:27:11.519 --> 00:27:17.079 good place for people to do investment, then business grows and it'll expand on 373 00:27:17.119 --> 00:27:19.759 top of itself. This is why the US is the number one stock market 374 00:27:19.799 --> 00:27:22.519 globally, right. I mean China had some struggles just this last week. 375 00:27:22.599 --> 00:27:29.440 Obviously, US regulation here is actually really really helpful. I would like to 376 00:27:29.480 --> 00:27:33.759 see the SEC and the regulators get to a point where they're like, Okay, 377 00:27:33.359 --> 00:27:37.680 we don't like the way a particular company handled this particular asset that maybe 378 00:27:37.680 --> 00:27:41.440 should have been a security Instead of smack them down with like a hey, 379 00:27:41.519 --> 00:27:45.519 don't do that, you can't do any business, et cetera, they should 380 00:27:45.519 --> 00:27:48.279 be providing a path, you know, and if there needs to be a 381 00:27:48.279 --> 00:27:52.039 small amount of fine, okay maybe, but they should be providing a path 382 00:27:52.079 --> 00:27:56.240 where you bring it into compliance. And this denial that there's any any ambiguity 383 00:27:56.319 --> 00:28:00.480 I think is not helpful. There's been so much discussed, you know, 384 00:28:00.559 --> 00:28:06.000 from drugon Milliner to others. It's clear there's ambiguity. So let's help solve 385 00:28:06.000 --> 00:28:08.119 it. Let's get regulators that want to help solve the problem instead of just 386 00:28:08.440 --> 00:28:12.240 you know, smack down people that are politically opposed to them. I think 387 00:28:12.279 --> 00:28:15.960 would be a much better place to be. But we got some more time 388 00:28:15.240 --> 00:28:19.200 and in the meantime, you know, we'll keep building for sure. Yeah, 389 00:28:19.240 --> 00:28:22.200 Look, it seems like we're moving in the right direction where more members 390 00:28:22.200 --> 00:28:26.720 of Congress are aware. I mean, you got political candidates who are talking 391 00:28:26.720 --> 00:28:30.400 about crypto now what they would do. And then what was interesting yesterday Janet 392 00:28:30.440 --> 00:28:37.759 Yellen called on the folks at the House Financial Services Committee to get cryptoregulations passed, 393 00:28:37.759 --> 00:28:41.839 So it seems like, you know, moving in the right direction. 394 00:28:41.519 --> 00:28:45.519 Well, look, mostly I would take one exception to it. You know, 395 00:28:45.559 --> 00:28:51.880 one thing I'd like to see happen is for this depolarization of crypto along 396 00:28:52.039 --> 00:28:56.279 party lines. To be honest, I'm completely baffled by it. The Democratic 397 00:28:56.359 --> 00:29:02.920 Party has, i think, for decades been known as kind of the party 398 00:29:02.960 --> 00:29:06.640 for the people that wants to take power away from like the big bankers and 399 00:29:06.680 --> 00:29:10.359 hand it down to you know, the individuals, and I think they do 400 00:29:10.440 --> 00:29:15.000 this in a lot of regards. And yet somehow the Democratic Party has taken 401 00:29:15.039 --> 00:29:19.640 the position that bitcoin and digital assets are dangerous, and in fact they say 402 00:29:19.680 --> 00:29:26.680 that like it's it's remember that regulation number one, the law enforcement component. 403 00:29:26.119 --> 00:29:33.559 They make claims that somehow crypto is is outsized the problem here. It's completely 404 00:29:33.720 --> 00:29:37.200 false. We know this on multiple fronts. First off, all of the 405 00:29:37.240 --> 00:29:42.440 companies like Bicco and coinbase that are we are here to work with regulators. 406 00:29:42.720 --> 00:29:48.440 We are following the law to the t and we're certainly doing a much better 407 00:29:48.559 --> 00:29:52.680 job than the US banks that are getting fined on these same fronts. With 408 00:29:52.960 --> 00:29:57.480 multi billion dollar fines that far exceed anything that's ever happened in crypto. But 409 00:29:57.559 --> 00:30:02.200 another thing that's just evidence of it is, you know, look at recoveries 410 00:30:02.640 --> 00:30:07.559 of stolen money. The largest two recoveries of law enforcement in the US recovering 411 00:30:07.599 --> 00:30:12.839 monies in the history of law enforcement, they're both in crypto. One of 412 00:30:12.839 --> 00:30:15.920 them is the soak Road Funds, which is currently going on, the other 413 00:30:15.960 --> 00:30:25.960 one is the Bitfinex funds. How was this done when allegedly these crypto companies 414 00:30:26.039 --> 00:30:30.119 don't have appropriate law enforcement controls. Well, the reason is is because we're 415 00:30:30.119 --> 00:30:33.319 built on a better architecture. We're built on top of this thing called the 416 00:30:33.319 --> 00:30:37.519 blockchain, and the blockchain gives a level of transparency that we've never seen before. 417 00:30:38.200 --> 00:30:41.279 The Democrats also, you know, they like to talk about January sixth, 418 00:30:41.640 --> 00:30:45.960 but remember like within two weeks of January sixth, by January twentieth, 419 00:30:47.440 --> 00:30:51.720 people are already identifying funds on the blockchain that have been used to fund various 420 00:30:51.759 --> 00:30:55.079 groups. And this is because with a public blockchain, not only do you 421 00:30:55.119 --> 00:30:59.240 have law enforcement having the ability to go and see where money is moving, 422 00:30:59.599 --> 00:31:04.480 but also so the entire populace can so we can now police ourselves as as 423 00:31:04.519 --> 00:31:11.000 a nation, which is really really powerful. So look, the bad guys 424 00:31:11.039 --> 00:31:14.960 out there are going to quickly learn that it's a lot easier to do bad 425 00:31:15.000 --> 00:31:18.519 things with Fiat than it is to do with bitcoin. This is not going 426 00:31:18.559 --> 00:31:23.039 to be an issue. And I would love to see a world where regulations 427 00:31:23.079 --> 00:31:27.440 don't take a one point eighty just because we have a new president. And 428 00:31:27.480 --> 00:31:32.640 if you recall at the end of the twenty twenty era, and I'm not 429 00:31:32.680 --> 00:31:34.839 trying to promote one president over the others, it's not what it's about, 430 00:31:36.160 --> 00:31:41.759 you know. But the OCC which controls all of the federally regulated banks in 431 00:31:41.799 --> 00:31:45.920 America, came out with a plan for OCC banks to be able to support 432 00:31:45.920 --> 00:31:52.279 crypto and bank in New York. Mellon and other credible parties came forward and 433 00:31:52.319 --> 00:31:56.960 wanted to move on that. And then we got a new president. The 434 00:31:56.039 --> 00:32:02.599 laws didn't change, the regulations didn't change, but the interpretation throughout the administration 435 00:32:04.440 --> 00:32:08.799 went completely the opposite as the previous administration. That's not what a presidential transition 436 00:32:08.880 --> 00:32:12.880 is supposed to be about in this country. You know. It's supposed to 437 00:32:12.920 --> 00:32:16.880 be that me or you or anyone as a business is able to understand the 438 00:32:16.960 --> 00:32:21.759 laws and rules, abide by the laws and rules, and regardless of who's 439 00:32:21.799 --> 00:32:24.319 in the White House, we can still do business without those rules changing. 440 00:32:24.799 --> 00:32:28.079 But we're not seeing that so anyway, that's the one thing I would like 441 00:32:28.119 --> 00:32:31.279 to see. I think it's going to continue to cause some delays on getting 442 00:32:31.400 --> 00:32:36.279 you know, regulation fully sorted out here in the US. Yeah, and 443 00:32:36.599 --> 00:32:40.400 look, I've seen some pro crypto democrats like Richie Torres and Darren Soda. 444 00:32:40.400 --> 00:32:45.640 I've spoken to a couple of them, but Elizabeth Warren, unfortunately, her 445 00:32:45.000 --> 00:32:49.759 voice and marketing, if you want to put it that way, outweighs you 446 00:32:49.799 --> 00:32:53.240 know, what they've been saying, and that's been a challenge. But hopefully 447 00:32:53.359 --> 00:33:00.119 we have some pivots towards crypto and we get some things through now. In 448 00:33:00.160 --> 00:33:06.319 the bitcoins body taps, I noticed that bitgo is the custodian for Valkyrie, 449 00:33:06.519 --> 00:33:10.079 and I believe hashtags are there others. Those are the two so far, 450 00:33:10.799 --> 00:33:15.039 and we hope to have some news about others and not too distant future. 451 00:33:15.119 --> 00:33:20.960 But yeah, look, I mean it makes sense if you're a custodian of 452 00:33:21.000 --> 00:33:23.200 anything. I'm sorry, if you're an etf issuer of anything, you know, 453 00:33:23.200 --> 00:33:27.400 it makes sense to use multiple custodians, and of course they want to 454 00:33:27.400 --> 00:33:30.599 do that. So the first wave, a lot of people ask me, 455 00:33:30.640 --> 00:33:35.599 like, why did Coinbase get so much of it? Remember, like we've 456 00:33:35.599 --> 00:33:38.759 been trying to get an ETF through for almost ten years now. So the 457 00:33:38.799 --> 00:33:45.559 immediate focus of all of the ETF issuers was how to get first in line 458 00:33:45.720 --> 00:33:47.880 and how to make sure that you remove all objections. So, you look, 459 00:33:49.000 --> 00:33:52.279 they register with the SEC, the SEC has comments and questions, they 460 00:33:52.319 --> 00:33:55.240 go through this. What's easier, you know, figuring out one custodian or 461 00:33:55.240 --> 00:34:00.200 two custodians. Of course, you put as few possible objections in it as 462 00:34:00.200 --> 00:34:05.240 possible, and you pick the one that's already a publicly listed company, regardless 463 00:34:05.240 --> 00:34:07.920 of whether the technology is stronger or not as strong. And you know, 464 00:34:08.000 --> 00:34:14.800 look, the bigdo technology up against any other custodian always stands head and shoulders 465 00:34:14.800 --> 00:34:19.280 above. Obviously I'm pimping my own game here, but even against Coinbase, 466 00:34:19.719 --> 00:34:22.000 I stand behind this fact. Look, we do this two out of three 467 00:34:22.000 --> 00:34:25.840 technology across everything that we do, and those zero compromises. We're never using 468 00:34:25.880 --> 00:34:30.519 the single sig wallets, which apparently you know, some of the other big 469 00:34:30.559 --> 00:34:36.679 custodians do, and there's a reason for that. It's really really important in 470 00:34:36.760 --> 00:34:39.360 terms of getting insurance, having the right controls, no single point of failure, 471 00:34:40.480 --> 00:34:45.760 physical problems of like not being vulnerable to a single site being attacked or 472 00:34:45.760 --> 00:34:51.199 overrun by a small militia. Now there's talks of bigcoin ets being approved in 473 00:34:51.239 --> 00:34:53.280 Asia, such as Hong Kong and so forth. What are your thoughts on 474 00:34:53.280 --> 00:34:57.159 that. Do you think we see that this year? And given that you 475 00:34:57.199 --> 00:35:00.920 have licenses in different parts of Asia, are you looking to to facilitate custody 476 00:35:00.920 --> 00:35:05.559 there as well? Hi everyone, part of the interruption. I'm Tony Edward, 477 00:35:05.559 --> 00:35:07.679 the founder and host of the Thinking Crypto podcast. I have a you 478 00:35:07.840 --> 00:35:12.079 favor to ask you. If you haven't subscribed as yet on YouTube or the 479 00:35:12.079 --> 00:35:15.159 podcast platforms, hit that subscribe button, hit the thumbs up button, hit 480 00:35:15.199 --> 00:35:20.719 the notification bell on the YouTube platform and on Spotify or Apple or wherever you 481 00:35:20.760 --> 00:35:23.639 get your podcasts, please leave a five style rating and review. It supports 482 00:35:23.679 --> 00:35:28.519 the podcast. It allows me to bring great quality content to you. Thank 483 00:35:28.559 --> 00:35:30.000 you for your support, and I'll let you get back to the content. 484 00:35:30.719 --> 00:35:36.000 I think Hong Kong's moving pretty fast. I think they're sincere, and I 485 00:35:36.000 --> 00:35:42.400 think they see an opportunity to start to win market share globally that they have 486 00:35:42.480 --> 00:35:45.039 to act now. So I think that's going to come very quickly. And 487 00:35:45.079 --> 00:35:49.440 then, yes, of course, part of why we're doing this globally is 488 00:35:49.480 --> 00:35:52.480 because you know, look, there's a lot of assets outside the US. 489 00:35:52.519 --> 00:35:55.519 There's more outside assets outside the US than inside the US. I think this 490 00:35:55.599 --> 00:36:00.920 is one of the things that people you know think about. You know, 491 00:36:01.159 --> 00:36:07.239 while the US sorts out how to participate in digital assets, foreigners outside of 492 00:36:07.239 --> 00:36:10.480 the US are like, I don't want to put it in America. You 493 00:36:10.480 --> 00:36:13.840 guys need to sort that stuff out. I'm going to keep it in Europe. 494 00:36:13.880 --> 00:36:15.880 I'm going to keep it in Asia until you do. Look, if 495 00:36:15.920 --> 00:36:22.000 the US had a friendly climate towards crypto, even if it had some wrinkles 496 00:36:22.000 --> 00:36:27.280 in the first few implementations, we would breathe bringing all of these assets into 497 00:36:27.280 --> 00:36:30.119 the US right now. We would win. There's no reason we wouldn't win. 498 00:36:30.239 --> 00:36:36.239 We have absolutely the most stable political system, absolutely the most stable financial 499 00:36:36.280 --> 00:36:39.039 system in spite of all of its flaws. The stock markets, of course, 500 00:36:39.039 --> 00:36:45.079 are already here. So we're missing out on opportunity by not being clear 501 00:36:45.239 --> 00:36:47.480 to just say, hey, we welcome it, bring it in, we'll 502 00:36:47.480 --> 00:36:52.280 figure it out. So other nations, Hong Kong and others are doing just 503 00:36:52.360 --> 00:36:54.639 that. They're like, all right, US doesn't want to do it, 504 00:36:54.679 --> 00:36:59.880 we'll do it. And of course we know that there's an ongoing political rivalry 505 00:37:00.000 --> 00:37:02.840 between the US and China, so this is going to play out economically too. 506 00:37:04.480 --> 00:37:07.719 M M. My question for you just came to mind. Do you 507 00:37:07.719 --> 00:37:13.480 think part of the pushback on crypto and slow to get regulations out and so 508 00:37:13.559 --> 00:37:20.760 forth. In addition to it's all new, but also it removes the control 509 00:37:21.039 --> 00:37:25.960 and the visibility around fiat currencies, which the government, you know, they 510 00:37:27.079 --> 00:37:30.719 control the money, they can control how things go with the economy, and 511 00:37:30.960 --> 00:37:36.199 we see they pull different levers with rate hikes and printing money when they need 512 00:37:36.280 --> 00:37:42.559 to write. But now that for example, is they're able to track it 513 00:37:42.599 --> 00:37:45.079 maybe a bit better with these ETFs because it falls under the equities bucket. 514 00:37:46.639 --> 00:37:51.880 That's that's kind of what's happening that they're like, hey, we can't control 515 00:37:51.920 --> 00:37:55.360 this thing. We can't see where money's flowing. Money's going into stable coins, 516 00:37:55.400 --> 00:38:00.320 money is going to bitcoin. People are self cussing, we can't that 517 00:38:00.559 --> 00:38:05.239 or control it to a certain degree. But if it's an ETF wrapper or 518 00:38:05.280 --> 00:38:08.960 some financial product that falls under the equities bucket, we can. And I 519 00:38:09.000 --> 00:38:13.079 don't know if I'm off base here, and I hope I'm articulating that well, 520 00:38:13.119 --> 00:38:17.199 but a bit of the pushback into delays because of that money is power, 521 00:38:17.280 --> 00:38:22.960 right, This is a phrase that's been around long before bitcoin. And 522 00:38:23.039 --> 00:38:28.920 yeah, people are concerned about maintaining the power of money. So I'll give 523 00:38:28.960 --> 00:38:31.920 you you two thoughts. Number one is on the ETF. Remember they they 524 00:38:32.000 --> 00:38:37.559 rejected in kind deposits of matrolls, right, this is a first. All 525 00:38:37.599 --> 00:38:43.840 other ETFs have the ability to do in kind, you know, create some 526 00:38:43.880 --> 00:38:47.000 redemptions I guess they call it. But and that's a really important part of 527 00:38:47.079 --> 00:38:54.559 actually having a tight spread between the ETF price and the underlying actual price. 528 00:38:54.639 --> 00:39:00.159 And yet so from a pure investor protection point of view, of course you 529 00:39:00.159 --> 00:39:04.039 should have in kind creates interdemptions. But they didn't go with that, and 530 00:39:04.119 --> 00:39:07.559 I think part of that is because they feel they don't have a good handle 531 00:39:07.599 --> 00:39:12.800 on how to do sanctions controls on bitcoin generally. But I'll give you a 532 00:39:12.800 --> 00:39:16.360 second example, which is really I guess more abstract, but about what happens 533 00:39:16.960 --> 00:39:25.079 when fiats lose control of their monetary system. And we haven't seen this tremendously 534 00:39:25.079 --> 00:39:30.440 in the United States, but every FIAT operator, of course, has to 535 00:39:30.480 --> 00:39:31.800 think about this. So we could just go back a couple of years. 536 00:39:32.719 --> 00:39:37.480 Of course, we had the COVID years. Every country printed a lot of 537 00:39:37.480 --> 00:39:42.039 money, right, so the supply of all the currencies went way up. 538 00:39:42.880 --> 00:39:45.199 That created a set of problems, and then we started to see inflation. 539 00:39:45.360 --> 00:39:50.119 And so then you see the federal reserves also try to shrink that back down 540 00:39:50.480 --> 00:39:53.199 by increasing interest rates. As soon as interest rates here in the United States 541 00:39:53.199 --> 00:39:59.760 went up, the dollar got way stronger against a whole bunch of international currencies. 542 00:40:00.159 --> 00:40:01.880 Is because not only is it a dollar, which is already the reserve 543 00:40:01.920 --> 00:40:07.199 currency, but now it's returning five percent. So all this money from other 544 00:40:07.239 --> 00:40:13.960 currencies floods into dollars those guys who were already having weak financial systems. So 545 00:40:14.000 --> 00:40:16.840 I'm talking about Argentina, I'm talking about Venezuela, I'm talking about Turkey. 546 00:40:19.039 --> 00:40:23.840 They start seeing massive inflation, and if you wouldn't call it hyperinflation, I 547 00:40:23.840 --> 00:40:28.599 think it's pretty close to it. All right, So what happens in those 548 00:40:28.639 --> 00:40:34.280 countries, Well, the leaders of those countries are now in trouble and they 549 00:40:34.320 --> 00:40:37.679 see their citizenry starting to try to get out of their fiat and move to 550 00:40:37.800 --> 00:40:43.920 dollars. And as they do that, their currency gets even weaker. So 551 00:40:43.960 --> 00:40:46.039 you see a pattern. It's always the same. So first they'll make it 552 00:40:46.079 --> 00:40:51.599 illegal to hold dollars, and so now the people can't hold dollars. Does 553 00:40:51.599 --> 00:40:54.559 that stop them? No? Like, unfortunately, the people are just you 554 00:40:54.559 --> 00:40:59.480 know, there's victims, right, They're trying to preserve their value so that 555 00:40:59.519 --> 00:41:00.719 they can pay their rent, buy their food, and send their kids to 556 00:41:00.760 --> 00:41:05.199 school. It's basic stuff. And the government can come in and say you 557 00:41:05.239 --> 00:41:07.800 can't have dollars. But if the only choice is to hold this cash, 558 00:41:07.880 --> 00:41:12.360 which you can see is going down in value on a daily basis, you're 559 00:41:12.400 --> 00:41:16.440 gonna do something. So this pattern has played out in all those countries. 560 00:41:17.039 --> 00:41:21.320 We've seen tether, you know, and you know, people have a lot 561 00:41:21.360 --> 00:41:25.239 of questions about tether. I mean, obviously it's sustained over a long period 562 00:41:25.320 --> 00:41:30.280 of time, it's been impressive and its growth. But if you think bitcoin 563 00:41:30.320 --> 00:41:35.480 in crypto is complicated, imagine overlaying a layer of stable coins from you know, 564 00:41:35.559 --> 00:41:38.400 kind of an unregulated player. The people in these countries are so desperate. 565 00:41:38.800 --> 00:41:42.360 Not only are they ready to move to digital assets, they're ready to 566 00:41:42.360 --> 00:41:44.960 move to this single tether, which they're not even sure exactly where it's back. 567 00:41:45.760 --> 00:41:47.480 And I'm not trying to say that I'm making bad decisions. They're making 568 00:41:47.480 --> 00:41:50.559 a good decision. What they're looking at is they're like, well, that 569 00:41:50.559 --> 00:41:53.039 thing's holding the value of a dollar, and my local currency is like going 570 00:41:53.039 --> 00:41:57.519 to zero, So what am I going to do? All right? So 571 00:41:58.679 --> 00:42:04.079 back in the mind I think for FIAT leaders is like, I like to 572 00:42:04.159 --> 00:42:06.519 have my money. I can print it when I want it. I can 573 00:42:06.559 --> 00:42:08.920 do politically what I want to do. I know it has side effects. 574 00:42:09.599 --> 00:42:15.239 How do I not lose my ability to print money? And if I allow 575 00:42:15.280 --> 00:42:21.760 something that's got an actual static supply like bitcoin or gold to be used too 576 00:42:21.880 --> 00:42:25.320 much in my nation, do I lose control of my power? So, 577 00:42:25.360 --> 00:42:29.239 like this is the libertarian argument. I mean, I think it's a lot 578 00:42:29.320 --> 00:42:32.679 about why we are here in the bitcoin space. I'd like to be a 579 00:42:32.719 --> 00:42:37.960 little bit more balanced, I guess on the political part of like, you 580 00:42:37.000 --> 00:42:42.239 know, is it purely one way or another? The folks in power are 581 00:42:42.280 --> 00:42:46.360 not going to easily give up, and they will not let the currency simply 582 00:42:46.400 --> 00:42:50.519 move. So there's battles to be fought. Some of those are being fought 583 00:42:50.559 --> 00:42:53.679 in the early skirmishes. I think where we're at right now. In the 584 00:42:53.800 --> 00:42:59.880 end, I think there's no doubt that digital assets bitcoin are going to win. 585 00:43:00.480 --> 00:43:04.199 They have to win because it's the people. Remember back to that example 586 00:43:04.239 --> 00:43:08.159 I just gave. If you're just a citizen in a country that has overprinted 587 00:43:08.159 --> 00:43:13.280 its money supply, you don't have a choice. You can't use the fiat. 588 00:43:13.360 --> 00:43:15.960 It doesn't work, it's broken. You have to move to something else. 589 00:43:15.039 --> 00:43:17.400 You're looking at two options right now. I think it's either gold or 590 00:43:17.400 --> 00:43:22.400 bitcoin. Bitcoin's better than gold in almost every way. When it comes to 591 00:43:22.400 --> 00:43:25.400 a currency, you can hold it yourself, it can't be stolen, it's 592 00:43:25.440 --> 00:43:30.760 a lot lighter weight, it could be funged, it's fungible into without every 593 00:43:30.760 --> 00:43:35.880 other bitcoin, it can be divisible into tons of little, tiny, tiny 594 00:43:35.920 --> 00:43:43.000 parts, so it's just not counterfeitable. Also very important gold tons of counterfeit 595 00:43:43.079 --> 00:43:45.599 out there. And then lastly, the supply is even better at bitcoin. 596 00:43:45.880 --> 00:43:50.239 As you know, as the price of gold goes up, the mining operations 597 00:43:50.800 --> 00:43:52.800 beef up and they mine more gold, so the inflation of gold goes up. 598 00:43:53.760 --> 00:43:58.920 All right, Anyway, those big advertisement I guess for bitcoin. But 599 00:43:59.039 --> 00:44:02.320 yeah, I think this is this is an undercurrent of what's going on politically 600 00:44:02.320 --> 00:44:07.280 for sure. So Mike, when the Big One's body tess were approved, 601 00:44:07.840 --> 00:44:12.480 did you start seeing increased demand for your services? Where you getting more phone 602 00:44:12.519 --> 00:44:16.840 calls? I'm curious if you know institutions were like, oh this is this 603 00:44:16.920 --> 00:44:22.840 is interesting that you know Big One going mainstream and so forth. I think 604 00:44:22.880 --> 00:44:25.320 I think there's two competing factors here. Yes, Actually, over the last 605 00:44:25.800 --> 00:44:30.760 six months, things have been really accelerating. We're definitely coming into a ball 606 00:44:30.880 --> 00:44:36.239 market, certainly relative to where we were the last couple of years. Our 607 00:44:36.280 --> 00:44:39.960 revenues have increased, our customer client bases growing very quickly right now, and 608 00:44:40.000 --> 00:44:46.039 I'm hearing that from other CEOs. I think the ETF backdrop has helped with 609 00:44:46.119 --> 00:44:50.559 some of the narrative and the messaging, But the ETF itself, I think 610 00:44:50.599 --> 00:44:54.519 we haven't seen it actually fully pick up steam yet. So remember the biggest 611 00:44:54.519 --> 00:45:00.280 funds in America, the pension funds. They're likely to part this paid in 612 00:45:00.320 --> 00:45:02.239 digital assets by way of an ETF. It fits within their model, they 613 00:45:02.280 --> 00:45:06.079 can use their existing structure, they can get their heads around the risk. 614 00:45:06.480 --> 00:45:12.679 A whole bunch of reasons. I don't believe those parties really materially changed their 615 00:45:12.719 --> 00:45:17.719 thought process around Bitcoin until the ETF was actually launched. That is, they're 616 00:45:17.760 --> 00:45:22.039 not. It's been ten years, right, so and there it's been up 617 00:45:22.079 --> 00:45:24.519 and down on whether there's an ETF. They were waiting until it's really done 618 00:45:24.559 --> 00:45:29.440 and it's really operating. We're now at that stage, which means they can 619 00:45:29.519 --> 00:45:34.880 now go into the next evaluation, which is putting together the whole case for 620 00:45:34.920 --> 00:45:37.159 should it be part of their portfolio, figuring out how they will do that, 621 00:45:37.960 --> 00:45:40.559 mitigating all of the risks that go along with it, running through the 622 00:45:40.559 --> 00:45:50.039 committee after committee. These guys run very strict, very organized investment processes. 623 00:45:50.159 --> 00:45:52.679 They don't just know say ah, great, I can do an ETF now 624 00:45:53.360 --> 00:45:57.480 by me one hundred million. No, it's a very very methodical process. 625 00:45:57.800 --> 00:46:01.679 So those processes are started, and I think we start to see that happen, 626 00:46:01.880 --> 00:46:07.760 you know, really take effect mid to late this year. Yeah, 627 00:46:07.760 --> 00:46:12.760 it's it's interesting and on a personal level, I've been getting more phone calls 628 00:46:12.880 --> 00:46:16.440 from family members and friends, many of who've seen the news around the ETF 629 00:46:16.480 --> 00:46:20.719 approvals, like how do I invest in bitcoy and tell me more? It 630 00:46:21.039 --> 00:46:24.880 seems like a psychological barrier has been broken down and they're seeing these big names 631 00:46:24.920 --> 00:46:30.480 launching the ETF. So it's it's I'm excited for this upcoming bull market. 632 00:46:30.239 --> 00:46:34.880 Certainly true. I mean, obviously a tremendous amount of credibility comes to the 633 00:46:34.880 --> 00:46:37.440 space when you know Blackrock and Fidelity. And by the way, there's a 634 00:46:37.480 --> 00:46:40.480 lot to talk about Blackrock these days, but I think Fidelity and I'm not 635 00:46:40.480 --> 00:46:44.800 trying to diss on on Blackrock. BlackRock's doing a great job. I really 636 00:46:44.840 --> 00:46:50.039 appreciate all that they're doing too. Fidelity has been tuning this this horn for 637 00:46:50.599 --> 00:46:52.320 ten years now, no, no, a little less eight, right, 638 00:46:52.719 --> 00:46:55.360 but they've been in it for a long time. They saw the promise of 639 00:46:55.400 --> 00:47:00.599 this early, they built Fidelity assets. They've just been you know, taking 640 00:47:00.639 --> 00:47:06.599 along slowly, consistently making their products better. So book hats off to both 641 00:47:06.639 --> 00:47:09.320 of those guys. Yes, they definitely lend a lot of strength. Franklin 642 00:47:09.320 --> 00:47:14.239 Templeton also, of course, wisdom true, all of these guys are great. 643 00:47:14.639 --> 00:47:16.400 Yeah, some of the biggest names. So, Mike, I got 644 00:47:16.440 --> 00:47:20.960 to ask you, Uh, you guys are doing great. I believe your 645 00:47:21.239 --> 00:47:27.159 last valuation was like one point seventy five billion. Are you you have plans 646 00:47:27.199 --> 00:47:30.599 for this upcoming cycle to go public? What can you tell us there? 647 00:47:31.079 --> 00:47:35.079 We're happy to continue operating for quite some time. Look, I mean, 648 00:47:35.760 --> 00:47:39.679 IPO is probably a destiny at some point for the future of ITICCO. I 649 00:47:39.719 --> 00:47:46.039 think we wouldn't want to try to to go public under under this administration right 650 00:47:46.039 --> 00:47:51.079 now. I think I think there's probably still a lot of headwinds for crypto 651 00:47:51.119 --> 00:47:54.079 companies, but also there's a lot of benefits of being a private company. 652 00:47:54.119 --> 00:47:59.440 And I think until all the regulations are kind of sorted out here in the 653 00:47:59.519 --> 00:48:02.280 US, we're happy where we're at. We're growing, we want to provide 654 00:48:02.320 --> 00:48:07.079 great value to our clients, and not having the distraction of public markets I 655 00:48:07.079 --> 00:48:12.880 think is actually a real benefit for us. Final question here, anything else 656 00:48:12.920 --> 00:48:15.559 you have on your roadmap? Obviously you guys are doing a lot. There's 657 00:48:15.599 --> 00:48:17.960 a lot of great things, but anything you can give us a hint on 658 00:48:19.039 --> 00:48:22.880 that maybe down the road, well, I think we talked about some of 659 00:48:22.920 --> 00:48:24.679 it with the Go network. You know that really is kind of one of 660 00:48:24.679 --> 00:48:30.239 our big endeavors. It's not a it's not an all wrapped and done in 661 00:48:30.239 --> 00:48:32.320 twenty twenty four things. This isn't, you know, a five year endeavor. 662 00:48:34.239 --> 00:48:37.440 You know Bickos started out, I mean just to kind of reiterate it, 663 00:48:37.519 --> 00:48:39.840 like you know, all about this technology security. It was initially it 664 00:48:39.920 --> 00:48:43.960 was multi sig, which is today the gold standard of how you secure this 665 00:48:44.000 --> 00:48:45.920 stuff. But today it's not just multi sig, it's multi sig, MPC, 666 00:48:46.119 --> 00:48:51.000 threshold signature schemes, smart contracts. There's a lot that we do in 667 00:48:51.039 --> 00:48:53.880 that space. We are the largest wall as of service provider bar and on, 668 00:48:54.000 --> 00:48:57.480 and this is where we hold one key or clients will two keys, 669 00:48:57.480 --> 00:49:00.440 so it's self custody to you, but you get all the best benefits of 670 00:49:00.480 --> 00:49:05.159 that security. And we're the only provider that does that two of three everywhere 671 00:49:05.480 --> 00:49:07.719 you know fireblocks and others that are doing these three of three systems, which 672 00:49:07.760 --> 00:49:12.760 means you have to go figure out how to protect against loss. So we 673 00:49:12.800 --> 00:49:16.079 protect against theft and loss with the two of three system. Anyone that's using 674 00:49:16.119 --> 00:49:21.119 three out of three is only protecting against theft, doesn't protect against loss. 675 00:49:21.159 --> 00:49:24.119 You have to go figure out, you know, resolve the puzzle of how 676 00:49:24.159 --> 00:49:28.920 do you not have a single point of failure when there's a backup key somewhere. 677 00:49:28.960 --> 00:49:31.320 So we got the wall as a service component, the custodian with the 678 00:49:31.400 --> 00:49:36.119 largest independent custodian in the world. We're going to continue to grow that now 679 00:49:36.159 --> 00:49:40.079 with our international capabilities. And then the next phase is the GO network, 680 00:49:40.280 --> 00:49:44.239 which is really trying to figure out how do we build market structure in a 681 00:49:44.280 --> 00:49:49.199 sensible way that's better than what we have in traditional markets, faster, it's 682 00:49:49.280 --> 00:49:52.480 real time. And then of course we've got a partnership with Copper already in 683 00:49:52.519 --> 00:49:57.840 play. We hope to get that launched and operating this year, but there'll 684 00:49:57.840 --> 00:50:02.320 be other custodians that will be coming into We strongly believe that we should continue 685 00:50:02.320 --> 00:50:07.280 down this decentralized endeavor, even though we're known for the centralized custy. I 686 00:50:07.320 --> 00:50:13.960 guess one last point on this, why have all three keys stored in the 687 00:50:14.039 --> 00:50:16.440 US, right? We can now start to split those across jurisdiction, so 688 00:50:16.519 --> 00:50:19.559 you can put one in Germany, put one in the US, put one 689 00:50:19.559 --> 00:50:24.039 in Singapore, and have the benefit of qualified cust in the US, and 690 00:50:24.079 --> 00:50:29.719 then kind of in aggregate, but have the protection against any jurisdictional things that 691 00:50:29.760 --> 00:50:32.239 may happen which may not be what you want to have happen for your keys. 692 00:50:32.280 --> 00:50:37.840 So we're trying to continue to push that decentralized front, recognizing, of 693 00:50:37.840 --> 00:50:39.880 course there's times when people want to hold your you, to hold your keys, 694 00:50:40.360 --> 00:50:44.480 you to hold their keys for you, But how do we make it 695 00:50:44.519 --> 00:50:49.159 so that's still no single point of failures, even down to the regulatory or 696 00:50:49.239 --> 00:50:52.840 legal level. Yeah, absolutely, Mike. Always a pleasure, always great 697 00:50:52.880 --> 00:50:57.599 information, and I'm looking forward for the future updates around BICKO. Thank you 698 00:50:57.639 --> 00:51:00.960 for joining me. Congrats on all your success too, Tony. Really love 699 00:51:00.960 --> 00:51:16.400 to seeing your podcasts. Keep both the great work.