Speaker 1: Hey everyone. We're recording at Halburn's Access Summit at the
Speaker 1: New York Stock Exchange and joining me is Chris Russell,
Speaker 1: who is the head of Tokenization chief Information Security Officer
Speaker 1: at T zero Group. Chris, great to have you.
Speaker 2: Thanks for having me.
Speaker 1: Yeah, I'm excited to learn about T zero and all
Speaker 1: the great things you guys are doing. Let's kick it
Speaker 1: off with your background. Tell us about how'd you you know,
Speaker 1: where you grow up and how'd you make your way
Speaker 1: into crypto and working at T zero.
Speaker 2: Sure, so my career started off and actually in the
Speaker 2: intelligence field. I was in the US Army. He was
Speaker 2: a human intelligence collector. They taught me Arabic, they shipped
Speaker 2: me over the Middle East for a decade. But towards
Speaker 2: the end I was doing some fun things and some
Speaker 2: of that was finding people with placement access to systems
Speaker 2: that we wanted to you know, have some information off of.
Speaker 2: So the frequency in which we got caught, which was never,
Speaker 2: let me believe that this was probably a good good
Speaker 2: career to pivot into job security wise, because people are
Speaker 2: just really unaware of from a social engineering aspect, from
Speaker 2: an insider a threat aspect, and even from a tooling
Speaker 2: aspect what's going on with their networks and if they're
Speaker 2: really defended and what kind of information is leaving all the.
Speaker 1: Time, and how did you first discover crypto and made
Speaker 1: your way into the industry.
Speaker 2: So I don't remember the exact day or why, but
Speaker 2: I remember I was looking into mining crypto theoryum, bitcoin, whatnot.
Speaker 2: And I was working at a man detection response firm
Speaker 2: and every time I tried to load a wallet on
Speaker 2: or download something, the screen tools would just quarantine it
Speaker 2: and go, this is malicious. It would look at the
Speaker 2: peer to peer connections, you unsigned binaries and go, nope,
Speaker 2: this is bad. So I just piqued my curiosity of like,
Speaker 2: this isn't supposed to be a bad thing, Like why
Speaker 2: does scurity tools? Like what are they looking at the heuristics?
Speaker 2: So I started looking at it from a security tool
Speaker 2: perspective really first and understanding that. And when I looked
Speaker 2: at it, I was like, this is this is kind
Speaker 2: of cool tech underneath the crypto piece, the back end infrastructure,
Speaker 2: how it networks, the way GATH works. So that was
Speaker 2: what hooked me. It wasn't the necessarily the crypto piece itself.
Speaker 1: Oh absolutely, So give us an overview of t zero's
Speaker 1: services and the blockchain and tokenization infrastructure services you provide.
Speaker 2: Sure. So t zero has been around for a while.
Speaker 2: I've been there for five years now and hit the
Speaker 2: scene pretty hard with tokenisation of private securities. It initially
Speaker 2: was digitally enhanced securities, heavily regulated broker dealer space that
Speaker 2: we live in, so they allowed like a digital carbon
Speaker 2: copy of private securities being traded. But while I've been there,
Speaker 2: we've moved to a full service infrastructure for you know,
Speaker 2: regulated private securities, farting from transaging services to primary raises,
Speaker 2: to an alternative trading system and secondary trading and custodianship
Speaker 2: with our special purpose broker licensing. So you know, we're
Speaker 2: we're a place where you can modularly use one of
Speaker 2: those services or use it from front to front to end.
Speaker 2: And what we're trying to do is provide other companies
Speaker 2: the infrastructure so they don't have to go through all
Speaker 2: the licensing headaches and the finer exams that we do,
Speaker 2: and they can just use our piece and plug it
Speaker 2: into their applications and offer it to you know, the
Speaker 2: rest of the world.
Speaker 1: So what type of institutions are you using your services,
Speaker 1: and I guess the contexts in light of the complete
Speaker 1: change we've seen as far as the approach of crypto
Speaker 1: in the US.
Speaker 2: So right now, we've a joint venture called Link with
Speaker 2: some other parties and it's a Treasury Fund redemption. It's institutional,
Speaker 2: but we're trying to take what we're doing with institutional
Speaker 2: partners and try and also find you know, similar retail
Speaker 2: type products that we can offer. So ultimately, we're trying
Speaker 2: to get a multi asset platform where you know, retail, institutional,
Speaker 2: everyone can come, UH, have access to these private you know,
Speaker 2: private securities, trade them, get liquidity, moving it out with
Speaker 2: what kind of assets they want, and so a lot
Speaker 2: of transformations going on for the past couple of months
Speaker 2: since Alan took over as a CEO and UH, And
Speaker 2: I don't know if you've noticed it, but the past
Speaker 2: three four months has been pretty hectic in the space
Speaker 2: and everyone's starting to I think, open up, open up
Speaker 2: the doors for interoperability, yeah, and connectivity, and it's really
Speaker 2: getting exciting.
Speaker 1: I was going to ask you about that interoperability because
Speaker 1: there's so many chains and we've seen these issuers folks
Speaker 1: who are looking to tokenized assets. They're putting in on
Speaker 1: multiple chains, So are you supporting them in that way?
Speaker 1: And you guys select the chains you want.
Speaker 2: Yeah, we really want to be chain agnostic. So we've
Speaker 2: talked to a lot of l ones and said, hey, like,
Speaker 2: what stands you apart, what's you know what, what would
Speaker 2: make you attractive for an issuer. So we get them
Speaker 2: the right right utility they want. The chain itself doesn't
Speaker 2: matter as much for us. We're trying to support all
Speaker 2: of them, you know, as much as we can. So, yeah,
Speaker 2: they all have strengths and minuses, they both, they all
Speaker 2: have legitimate products have been built on them, and so
Speaker 2: our job really is just to make sure the assurers
Speaker 2: and the customers are kind of getting utility they want
Speaker 2: at the end of the day. And we can use
Speaker 2: any blockchain for that really.
Speaker 1: Oh absolutely. So have you seen increased demand from institutions.
Speaker 1: It seems like there's a tokenization race happening. All the banks,
Speaker 1: these financial institutions, they all have a tokenization or crypto strategy.
Speaker 2: Now, yeah, I think everyone's opening up their eyes of
Speaker 2: the fact that we all need to be interconnected in
Speaker 2: a way for this to really work for everyone. You know,
Speaker 2: Previously there's a lot of silos, a lot of you know,
Speaker 2: walled off gardens. These are my assets, these are my customers.
Speaker 2: And that wasn't really good for the customer, was it.
Speaker 2: You know, it wasn't really good for liquidity for anyone.
Speaker 2: It wasn't good for blockchain, right. The whole point of
Speaker 2: blockchain is to you know, ease friction, not create more.
Speaker 2: And so I think, regardless of why the race is happening,
Speaker 2: the interoperability, the connections, opening up the walls and realizing
Speaker 2: we need to make it more seamless for the customer
Speaker 2: is just going to be a net positive for everyone.
Speaker 1: You know, you guys are certainly pioneers in many ways,
Speaker 1: and digital ownership is something that's going to rise where
Speaker 1: people are going to put different things they own, insurance
Speaker 1: contracts and you know, even tokenized maybe rare artwork and
Speaker 1: things like that. Is that something that the folks you're
Speaker 1: working with are also looking to build the infrastructure to
Speaker 1: allow the average Joe and Jane to.
Speaker 2: Be absolutely Yeah, we're seeing and we've been seeing for
Speaker 2: a while, you know, the interest in artwork, collectibles, entertainment,
Speaker 2: intellectual property. But there those are a lot of those
Speaker 2: are would say very specific issuances with a specific product
Speaker 2: that the average investors like kind of wrapping their head around. So,
Speaker 2: as a couple people mentioned during the summit already, what
Speaker 2: we're seeing now is a lot of interest bearing treasury products,
Speaker 2: mutual funds, things that people I think can understand digest
Speaker 2: better as a more foundational piece of their investment. And
Speaker 2: then if this, you know, if where they invest allows
Speaker 2: them to look at these other interesting assets, that's what's
Speaker 2: going to come. I think. Sorry, leading with the unique
Speaker 2: niche ones probably didn't serve the space very well originally
Speaker 2: for real world assets, but I think they're coming along
Speaker 2: and they're going to mix in well with the more
Speaker 2: traditional investments.
Speaker 1: Yeah, and the education aspect is going to be big too,
Speaker 1: to educate the consumer what is this, how does it work?
Speaker 1: Why can you trust it? And you can even just
Speaker 1: have it on your mobile phone.
Speaker 2: In a wallet exactly. And I think people want to
Speaker 2: interact with real world assets a little differently than bitcoin. Yeah,
Speaker 2: so the wallets need to probably have some work upgrades
Speaker 2: so that you know, you're you want to invest in
Speaker 2: a real estate token, whether prospectuses, you know, all the
Speaker 2: paperwork for this investment, is it all on chain Is
Speaker 2: it all available? Can you see it from your wallet
Speaker 2: or do you have to keep going to these different
Speaker 2: places to check on you know, that creates that friction
Speaker 2: that they don't want. So we need to bring in
Speaker 2: the experience as much as we can. And it's a
Speaker 2: it's a lot of things for a lot of different
Speaker 2: asset classes. But when you just start bringing that into
Speaker 2: the investor's hands, so they feel empowered and they feel
Speaker 2: like they can make good choices on their investments right
Speaker 2: from their wallets.
Speaker 1: Almost right. You know, as you were talking about real estate,
Speaker 1: I thought of the folks of chain Link because I
Speaker 1: saw them put out a dynamic NFT for a house
Speaker 1: and that over time, as there's upgrades and things being
Speaker 1: done to the house, it's automatically updating all the information. Well,
Speaker 1: this upgrade was done, this was changed to the land,
Speaker 1: and so on and so forth. I can't wait for
Speaker 1: that day.
Speaker 2: Yeah, that's the kind of information and investors really needs
Speaker 2: to make informed decisions and understand. You know, if you
Speaker 2: can look granularly at what was built, what was put
Speaker 2: in the house, and you're like, you know what, all
Speaker 2: these appliances are ten years old, These are only ten
Speaker 2: rated appliances. There's fifteen thousand dollars specifically that I can
Speaker 2: calculate that are going to be needing to be upgraded.
Speaker 2: You know, that's a you know, a simple example, but
Speaker 2: you know you can you know, again, real investors want
Speaker 2: to have that level of detail before they get in
Speaker 2: on things. And I think the uh, the transparency that
Speaker 2: the blockchain is going to bring in these regards is
Speaker 2: going to help them.
Speaker 1: You know, we were talking earlier about interoperability and a
Speaker 1: multichain world. There's not going to be one chain to
Speaker 1: rule them all. Is it Also the same for wallets
Speaker 1: that these institutions, many of them already have mobile apps
Speaker 1: and the way to interact with customers. Maybe they integrate
Speaker 1: a web three crypto wallet and they educate their customers.
Speaker 1: The customers already have an affinity, you know, they love
Speaker 1: the brand. That's the way to bring in the millions
Speaker 1: or billions on chain.
Speaker 2: Yeah, I think people have to have the mindset, especially
Speaker 2: if we're talking about self custody of bringing your own wallet.
Speaker 2: You're comfortable with your wallet, you know. Look, we're not
Speaker 2: good as society with passwords, are we?
Speaker 1: You know?
Speaker 2: And then we're going to do private keys and then
Speaker 2: we're going to make people have multiple private keys. We
Speaker 2: need to think about the end user, what's realistic. And
Speaker 2: if someone has a comfortable setup with meta mask, then
Speaker 2: we need to meet them where they are and let
Speaker 2: them have that connectivity from the walts they understand and
Speaker 2: are comfortable with.
Speaker 1: Yeah, that absolutely makes sense, and I'm curious to see,
Speaker 1: you know, within the next five years, how that wallet
Speaker 1: system and ecosystem is built out. And if it's big
Speaker 1: brands like Apple or Amazon or whatever may be, they say, hey,
Speaker 1: you already have our app, We've integrated this wallet. There
Speaker 1: you go. But you can also we partner with this
Speaker 1: other company and you can use the same wallet for them.
Speaker 2: I don't know, I could conceivably see that very easily.
Speaker 2: And I think I've already seen hints from major corporations
Speaker 2: about their in their tone into blockchain for that very reason.
Speaker 2: And it's not necessarily that they want to be the
Speaker 2: leader in wallets necessarily, but they don't want to not
Speaker 2: have that functionality on their application or device or hardware.
Speaker 2: They want to, you know, again, let people connect what
Speaker 2: they want, have it in one place and not have
Speaker 2: to have some separate system. You know, it's about you know,
Speaker 2: it's about user adoption and keeping people on the apps,
Speaker 2: keeping people.
Speaker 1: On the phone, right, Yeah, you don't want to cause
Speaker 1: more friction and they get frustrated and all that. I'm curious,
Speaker 1: after the Genius Act passed last year, are you seeing
Speaker 1: a lot of developments around stable coins and demand for
Speaker 1: stable coins?
Speaker 2: Absolutely so, our chief legal off servan Ness Savino. Anytime
Speaker 2: something comes out, immediately digest it and puts it into
Speaker 2: terms that meatheads like meat can I can easily understand
Speaker 2: so we can operationalize it. And yeah, around three four
Speaker 2: months ago, I think the race to have stable coin,
Speaker 2: stable coin operability, and just again interoperabilion general has just
Speaker 2: really increased. We've had phone calls with you, i'd say
Speaker 2: competitors in the past that were like, you know what,
Speaker 2: this hasn't really worked for everyone to have a closed garden.
Speaker 2: Let's see how we can just offer more to everyone
Speaker 2: and you open up your doors, We open up our
Speaker 2: doors and everyone benefits from that.
Speaker 1: Oh. Absolutely, what's on your road map? You know, it
Speaker 1: seems like with market structure, it looks like it's going
Speaker 1: to pass this year. Do you anticipate a lot of
Speaker 1: demand and even more adoption.
Speaker 2: Yeah, So regardless of which direction the regulators go, we're
Speaker 2: in a pretty good position because we started off with
Speaker 2: the regulated route of having all the you know, special
Speaker 2: purpose book radio licenses for custody and all these other options.
Speaker 2: And if they lighten the requirements to custody and hold
Speaker 2: these things and create these things, we're still in a
Speaker 2: good position because that means we have more partners and
Speaker 2: more you know, rise and tide lift cell ships, and
Speaker 2: so our mentality is either way, we're we have a plan,
Speaker 2: and the plan is to be a multi asset platform
Speaker 2: that we don't necessarily they have to run everything. We
Speaker 2: don't have to be the crypto exchange behind it. But
Speaker 2: we want to offer to our customers and we want
Speaker 2: to give them a good experience. So we're gonna partner
Speaker 2: with someone who can offer the things they want so
Speaker 2: they don't have to have a separate one more log
Speaker 2: in to another platform. So we want to you know,
Speaker 2: maybe there's a couple of different crypto platforms, maybe you
Speaker 2: prefer this one. This all requires works, you can't deliver
Speaker 2: it all in one ear. But the goal is to
Speaker 2: be a multi asset, to make it pretty seamless, to
Speaker 2: remove the friction, and I think if we can do that,
Speaker 2: then everyone really benefits.
Speaker 1: Oh absolutely, Chris. I'm looking forward to the future updates
Speaker 1: around T zero. Thank you so much for joining me.
Speaker 2: Appreciate it. Glad to be here.
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