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<v Speaker 1>Hey, folks, we are recording at Chainling Smart Cohn event

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<v Speaker 1>and joining me is a Philia Snyder who is the

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<v Speaker 1>co founder of twenty one Chairs.

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<v Speaker 2>Aphilia, great to have.

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<v Speaker 3>You, Thank you start traving me.

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<v Speaker 2>Phillia told us a bit about yourself in twenty one Chairs.

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<v Speaker 3>So I started twenty one Chairs with one of my

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<v Speaker 3>best friends almost eight years ago. It's actually going to

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<v Speaker 3>be eight years in early November.

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<v Speaker 2>Wow.

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<v Speaker 3>And we started the business mostly to help out our moms.

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<v Speaker 3>My mom introduced me to crypto in twenty thirteen. No way, Yes,

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<v Speaker 3>I have the wonderful claim of being orange pilled by

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<v Speaker 3>my mother and not the other way around. And she

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<v Speaker 3>completely understood everything about the space.

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<v Speaker 2>Wow.

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<v Speaker 3>She got it immediately.

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<v Speaker 2>I got to meet your mom.

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<v Speaker 3>She's amazing, but she got it. She was like, you know,

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<v Speaker 3>we're in a geopolitical anomaly. Swift is not going to last.

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<v Speaker 3>MERK spends too much money hedging, but global trade is

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<v Speaker 3>here to stay. We need a global reserve currency. Have

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<v Speaker 3>you heard of a thing called bitcoin? I'm like, excuse me, no,

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<v Speaker 3>what are you talking about. But at the time, there

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<v Speaker 3>was no way for her to invest in the product.

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<v Speaker 3>She didn't feel comfortable managing keys, and so she never did.

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<v Speaker 3>And then a few years went by and this problem

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<v Speaker 3>still existed, and my co founder had a similar issue

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<v Speaker 3>with his mother who was Egyptian and trying to make

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<v Speaker 3>investments of her own, and we decided we were going

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<v Speaker 3>to solve this problem for them, and so we set

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<v Speaker 3>out to build twenty one Shares, which has become one

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<v Speaker 3>of the largest global issuers of cryptoetfs. We make up

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<v Speaker 3>north to thirty percent of market share in Europe, managed

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<v Speaker 3>about twelve billion dollars in AUM globally across the US, Europe, UK, Switzerland,

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<v Speaker 3>the Middle East, Australia, and Brazil. So we have one

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<v Speaker 3>of the largest footprints in the space and we've been

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<v Speaker 3>building ever since.

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<v Speaker 1>So that's incredible that you were in so many markets,

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<v Speaker 1>and we know the United States was lagging behind a

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<v Speaker 1>lot of the other markets.

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<v Speaker 2>So what's it like to finally.

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<v Speaker 1>Have ETFs in the United States that you were able

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<v Speaker 1>to launch.

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<v Speaker 3>So one of the interesting things that's been happening over

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<v Speaker 3>the last couple of years is you're starting to see

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<v Speaker 3>the US market catch up, and most recently even saw

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<v Speaker 3>this with the universal listing standards that are coming out

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<v Speaker 3>that are allowing more ETFs to launch, and what I'm

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<v Speaker 3>hoping is that soon we'll be able to offer our

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<v Speaker 3>clients in the US the same products that we do

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<v Speaker 3>in Europe, where we have forty plus products covering all

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<v Speaker 3>sorts of different assets, actually including chain link.

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<v Speaker 1>Yeah, so let's talk about or double click into the

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<v Speaker 1>SEC's recent updated a generical listing standards. So from your

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<v Speaker 1>perspective as an issuer, does that make your life easier?

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<v Speaker 2>Is it make the process faster?

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<v Speaker 1>So?

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<v Speaker 2>Yes.

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<v Speaker 3>It's part of a broader trend though, of regulatory normalization,

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<v Speaker 3>where the relationship between digital asset firms and their regulators

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<v Speaker 3>essentially in every market is getting to a much more

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<v Speaker 3>normal place. What I mean by normal is a clarity, transparency,

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<v Speaker 3>a clear understanding of what it is how you're supposed

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<v Speaker 3>to do things, as opposed to constantly needing to adjust

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<v Speaker 3>for you know, an exception or a one off. And

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<v Speaker 3>actually it brings the market much closer, the American market,

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<v Speaker 3>much closer to what we had in Switzerland quite some

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<v Speaker 3>time ago with a similar set of constructed rules. But

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<v Speaker 3>it's really just one piece of this broader puzzle where

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<v Speaker 3>we're seeing it with many different pieces of legislation, both

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<v Speaker 3>in the US and abroad, pushing towards a place where

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<v Speaker 3>people can now really understand how crypto is going to

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<v Speaker 3>be regulated and therefore build their businesses accordingly, which is

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<v Speaker 3>ultimately better for everybody.

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<v Speaker 2>Absolutely.

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<v Speaker 1>So with these new guidance and clarity, if we want

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<v Speaker 1>to use that word, because it's the bill that's coming up,

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<v Speaker 1>of course, are you envisioning that a lot of the

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<v Speaker 1>trad FI ETF products that exist outside of crypto will

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<v Speaker 1>now be created for crypto assets?

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<v Speaker 3>So I think you will start to see more product

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<v Speaker 3>and more creative product. And that's actually part of the

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<v Speaker 3>foundation of our merger with falcon X, is this bringing

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<v Speaker 3>together of a one stop shop that can really offer

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<v Speaker 3>more interesting, more creative, more groundbreaking products to our customers.

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<v Speaker 3>And twenty Winters as a firm has actually launched about

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<v Speaker 3>sixty products that were global firsts in their categories right

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<v Speaker 3>whether in different geographies or different underlying assets, and we're

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<v Speaker 3>expecting to continue to do that and the partnership with

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<v Speaker 3>falcon X really allows us to accelerate that process, as

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<v Speaker 3>does this regulatory backdrop that we're operating against.

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<v Speaker 1>Oh, for sure, are you blown away by the success

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<v Speaker 1>of the crypto et apps, I mean just launched, you know,

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<v Speaker 1>within the past year or so, and we're seeing amazing

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<v Speaker 1>success across the boards.

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<v Speaker 3>It's been amazing. It's been a long time coming, but

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<v Speaker 3>it's been amazing and I think it will continue to

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<v Speaker 3>be because there are more people like my mom. Yeah,

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<v Speaker 3>my mom is actually exactly who you want. Do you

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<v Speaker 3>want somebody who understands our philosophy as a space, understands

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<v Speaker 3>the use case, wants to participate. How do you make

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<v Speaker 3>it possible for that person of participate, how do you

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<v Speaker 3>make them comfortable participating? And the answer is simplifying the infrastructure,

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<v Speaker 3>which means ETFs are going to continue to be a

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<v Speaker 3>major on ramp for people who are just interested in

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<v Speaker 3>exploring the space.

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<v Speaker 1>Yeah, and what are your thoughts on the Trump administration

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<v Speaker 1>opening up investments in four to one case different assets,

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<v Speaker 1>which includes crypto is an excuse my lack of knowledge

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<v Speaker 1>around this, but it's very beneficial for ETFs and things

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<v Speaker 1>like that.

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<v Speaker 3>It all comes back to the same thing, which is infrastructure.

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<v Speaker 3>And the end of the day, twenty one cheers and

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<v Speaker 3>falcon X in a lot of ways are infrastructure first companies.

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<v Speaker 3>We're seeing a moment in time where we can really

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<v Speaker 3>streamline how people get access to investment products. And when

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<v Speaker 3>you think about a four oh one K, at the

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<v Speaker 3>end of the day, it's just another rapper, sure, And

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<v Speaker 3>people who have those rappers and want to invest in

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<v Speaker 3>them are not going to be managing their own keys,

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<v Speaker 3>their own coins. That's not the structure, and the asset

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<v Speaker 3>managers that offer those products may not want to do

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<v Speaker 3>that themselves either. So I think you're going to continue

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<v Speaker 3>to see adoption of ETFs because what it does is

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<v Speaker 3>it shifts who has to actually run the infrastructure to

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<v Speaker 3>facilitate the investment from either the individual or the wealth

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<v Speaker 3>manager to a specialized player who really knows how to

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<v Speaker 3>deliver that value, and that typically helps foster and speed

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<v Speaker 3>up adoption of of these products.

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<v Speaker 1>Oh for sure, I mean the ETFs of being in

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<v Speaker 1>success And to your point, even my own parents who

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<v Speaker 1>are interestedting crypto, ETFs are easy wrapper that they're familiar

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<v Speaker 1>with the process versus going on coinbase.

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<v Speaker 3>But exactly exactly, it's a tough ask for somebody to

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<v Speaker 3>open a new what they perceive of to be really

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<v Speaker 3>a new bank account just to make one investment. That's

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<v Speaker 3>a tough ask for people.

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<v Speaker 1>For sure, and are you working with or in the

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<v Speaker 1>process of educating rias and wealth manager about your ETF

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<v Speaker 1>products and are they receptive now?

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<v Speaker 3>Yeah, So we've been doing that for years and twenty

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<v Speaker 3>one Shares as a business has always led with clarity,

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<v Speaker 3>transparency and education. We both want to make it possible

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<v Speaker 3>for people to buy the products. We also want to

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<v Speaker 3>make them comfortable in buying the products, and those are

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<v Speaker 3>actually two different things. And we've been on this road

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<v Speaker 3>of educating different investor bases around how they can allocate

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<v Speaker 3>to this space for a long time. What we've seen

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<v Speaker 3>is there's a spectrum to institutionalization and I think people

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<v Speaker 3>often miss that, which is you can have either an individual,

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<v Speaker 3>which I think most people understand. You can have a

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<v Speaker 3>brokerage who's going to allow that individual to execute. You

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<v Speaker 3>can have an investment advisor who, if their client asks them,

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<v Speaker 3>will let them buy the product. That's mostly where people

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<v Speaker 3>are at today. The idea that that investment advisor is

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<v Speaker 3>going to give you advice on a crypto allocation, for

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<v Speaker 3>the most part, hasn't really even begun, let alone what

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<v Speaker 3>would be considered much more institutionetionalized players thinking about like

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<v Speaker 3>insurance or pension plans or government funds or endowments. That's

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<v Speaker 3>really the upper end of what institutionalization looks like, and

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<v Speaker 3>we're in the very very early innings of what that

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<v Speaker 3>will be, which is why the success of the ETFs

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<v Speaker 3>today is so interesting.

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<v Speaker 2>Yeah, are their plans.

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<v Speaker 1>Look, there's a lot of crypto assets out there right

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<v Speaker 1>and we're still waiting on the market Structure bill to pass.

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<v Speaker 1>But are their plans to expand the portfolio of ETFs

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<v Speaker 1>around different all coins. It may be too early to

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<v Speaker 1>answer to that, but I'm curious, you know, how you

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<v Speaker 1>guys are planning as more clarity comes.

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<v Speaker 3>So I think if you look at our products suite

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<v Speaker 3>in Europe, that will give you a lot of the answers.

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<v Speaker 3>We offer forty different underlying assets. We have index products

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<v Speaker 3>and we've been running a lot of these four years. Actually,

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<v Speaker 3>the first product we ever brought to market, all the

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<v Speaker 3>way back in twenty eighteen was a index product. It

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<v Speaker 3>wasn't a bit QUINNYTF, it was actually a crypto index. Wow,

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<v Speaker 3>bring a bitcoin ETF to market until a bit after that,

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<v Speaker 3>and I think you were hoping that the same thing

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<v Speaker 3>will be able to occur in the US market. That

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<v Speaker 3>we will be able to really see clients have the

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<v Speaker 3>same level of access they do in Europe, and that's

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<v Speaker 3>my expectation for where the market is going.

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<v Speaker 1>It's exciting to see all the building and innovation, and

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<v Speaker 1>you guys are ahead of the curve in many ways

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<v Speaker 1>building that index product because that is you know, the

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<v Speaker 1>majority of investors, they're not they don't have time to

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<v Speaker 1>pick stocks or stuff, but they.

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<v Speaker 2>You can invest in an index.

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<v Speaker 3>Yes, yeah, and I think that is We've seen that

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<v Speaker 3>in every other asset class, that that is what investors like,

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<v Speaker 3>and I think you're going to continue to see that here,

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<v Speaker 3>which is we will there's some people who love picking stocks,

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<v Speaker 3>and we'll always want to pick their own stocks and

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<v Speaker 3>that's wonderful, but there are a lot of people who don't,

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<v Speaker 3>and I think you will see increasing popularity in some

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<v Speaker 3>of those types of products over the next several years

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<v Speaker 3>as interest moves from being a very bitcoin heavy story

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<v Speaker 3>to being a broader story.

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<v Speaker 1>Talk to us a bit about staking, because that's been

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<v Speaker 1>a recent addition to certain ETFs with the SEC it's

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<v Speaker 1>still some approval still needed.

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<v Speaker 2>And so forth. But are you guys working or anything

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<v Speaker 2>like that.

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<v Speaker 3>So we've offered staking atfs since twenty nineteen. Wow, so

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<v Speaker 3>we've been doing this for a long time. We brought

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<v Speaker 3>the first staking atfs to market in Europe. We were

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<v Speaker 3>some of the first, like big institutional clients for staking

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<v Speaker 3>products with our providers, and so I'm really excited to

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<v Speaker 3>see that expanding and continuing to see market normalization that

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<v Speaker 3>just because you're in one jurisdiction versus another, you can

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<v Speaker 3>access a similar type of product, and I think that

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<v Speaker 3>is very much the theme for crypto markets right now.

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<v Speaker 3>We are normalizing our relationship with regulators, we are normalizing

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<v Speaker 3>our relationship with asset allocators, and we are becoming part

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<v Speaker 3>of this global ecosystem as an industry. And it's really

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<v Speaker 3>interesting time. And it's actually that timing that made the

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<v Speaker 3>merger with Falconex so interesting.

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<v Speaker 1>Absolutely, it may be too early answered his question, but

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<v Speaker 1>there's a race to tokenize different assets equities, money market funds, gold,

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<v Speaker 1>precious metals, real estate much more. Do you think those

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<v Speaker 1>assets might find their way into ETFs eventually?

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<v Speaker 3>So I think you need to look at it as

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<v Speaker 3>a wrapper, Okay, Right. ETFs are just a rapper. You

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<v Speaker 3>can think of them like an empty box. You can

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<v Speaker 3>put anything you want in the box and trade it.

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<v Speaker 3>That's actually how ETFs work, and you can think about

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<v Speaker 3>it like imagine like a gift box that you can

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<v Speaker 3>buy and you can put anything in it. You can

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<v Speaker 3>put a PlayStation in it, you can put anything you want,

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<v Speaker 3>and an ETF's work exactly the same thing. You've put

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<v Speaker 3>anything inside that wrapper you would like to. Tokens are

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<v Speaker 3>just a different type of rapper. So imagine an ETF

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<v Speaker 3>is a blue box and a token is a red box.

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<v Speaker 3>You could theoretically put a red box in a blue box,

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<v Speaker 3>but I don't know why you would like it. Depends

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<v Speaker 3>on what the use case is. Why do you want

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<v Speaker 3>to do that?

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<v Speaker 1>Right?

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<v Speaker 3>Obviously, for things like investible crypto assets, so you know Bitcoin, Solana, ethereum,

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<v Speaker 3>people are looking for that exposure and so the rapper

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<v Speaker 3>provides that functionality. When you think about tokenization, the question

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<v Speaker 3>is you're providing access to that product in a different

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<v Speaker 3>way for a different audience. And I think that is

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<v Speaker 3>something we will continue to see both from a distribution perspective,

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<v Speaker 3>but also from a settlement's infrastructure perspective. Tokens are just

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<v Speaker 3>much much much more efficient as financial instruments. From a

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<v Speaker 3>settling from a clearing perspective, and so I think you

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<v Speaker 3>will start to see more and more TRADFI assets on chain,

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<v Speaker 3>including ETF's, being put into tokenized formats. And I'm my

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<v Speaker 3>perspective is I'm actually not even sure the end users

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<v Speaker 3>will know. They will know, not necessarily because this is

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<v Speaker 3>back end infrastructure for brokerages, and I think that is

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<v Speaker 3>very much the direction of travel. And that's what I

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<v Speaker 3>mean when I say TRADFI on crypto rails.

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<v Speaker 1>Yeah, that definitely makes sense. And it's amazing, affiliate the

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<v Speaker 1>amount of trad fi institutions that are entering the crypto market,

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<v Speaker 1>all the big banks, the big Wall Street firms. What

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<v Speaker 1>do you think about how they've all started jumping into

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<v Speaker 1>this race and they're all trying to tokenize, launch stable coins,

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<v Speaker 1>trading ETF's custody and all that.

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<v Speaker 3>It goes to show you that we're at that inflection

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<v Speaker 3>point where this now makes sense and the technology is

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<v Speaker 3>mature enough to actually support those types of use cases.

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<v Speaker 3>In the very early days of building the company, we

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<v Speaker 3>went and tried to pitch some very large allocators and

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<v Speaker 3>they told me things like, if I can't put five

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<v Speaker 3>hundred million to work, I don't without moving the market,

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<v Speaker 3>like I'm not going to do this, This doesn't make

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<v Speaker 3>sense for me, Like I need to write bigger checks

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<v Speaker 3>than that. And these were like large I think, like

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<v Speaker 3>you know, large pension funds or even UH endowments and

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<v Speaker 3>things exactly governments and things like that. So one of

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<v Speaker 3>the issues that I see is that we're finally at

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<v Speaker 3>a scale where these technologies can actually be used in

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<v Speaker 3>that way. And it goes to this idea that we

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<v Speaker 3>will have a world where it is easier to transfer

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<v Speaker 3>value in the format of a token than it is

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<v Speaker 3>in the format of an otherwise created security. And that

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<v Speaker 3>has much more to do with infrastructure than anything else.

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<v Speaker 3>And so when you see all of these large financial

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<v Speaker 3>institutions building out that infrastructure, whether it is whether it's

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<v Speaker 3>custody services, staking services, trading services, investment solutions, it's just

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<v Speaker 3>part of the trend moving us towards what ultimately was

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<v Speaker 3>the vision for crypto, which is we want to run

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<v Speaker 3>the world's financial rails.

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<v Speaker 1>It's funny, it seems like blockstream rails are going to

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<v Speaker 1>be powering all the markets eventually, economy and certain parts

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<v Speaker 1>of the government. Yes, it's exciting CD innovation. That's happening.

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<v Speaker 1>We touched on it a bit earlier, but the Market

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<v Speaker 1>Structure Bill is coming up. Everybody is waiting for that

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<v Speaker 1>because it's going to give clarity and what you can

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<v Speaker 1>do can do and what the regulators.

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<v Speaker 2>Need to do.

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<v Speaker 1>Do you think we see that pass by Q one

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<v Speaker 1>twenty six and what impact do you think you'll have

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<v Speaker 1>on the market? Oh?

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<v Speaker 2>Our question?

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<v Speaker 1>I know.

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<v Speaker 3>So. Look, I think timing is always tricky, especially with

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<v Speaker 3>like the way the US government's been functioning. I think

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<v Speaker 3>the timing of knowing when bills are going to be passed,

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<v Speaker 3>I couldn't tell you, But I think what's really interesting

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<v Speaker 3>is that you are seeing this trend not just here

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<v Speaker 3>but globally. This isn't an America's story. This bringing of

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<v Speaker 3>clarity is not an America centric issue. You're seeing it

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<v Speaker 3>in many jurisdictions. In fact, in most major jurisdictions, you're

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<v Speaker 3>seeing this real push towards having regulatory clarity, knowing who's

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<v Speaker 3>in charge of regulating these assets, defining them in some way.

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<v Speaker 3>And the way I typically conceive of regulation is sort

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<v Speaker 3>of like a layer cake. The bottom layer is how

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<v Speaker 3>do you define what you're regulating, who's in charge of it?

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<v Speaker 2>Sure.

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<v Speaker 3>The second is what are you actually what are the

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<v Speaker 3>rules of the road, And then the last is figuring

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<v Speaker 3>out how that's going to fit with every other piece

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<v Speaker 3>of financial regulation out there. And so, for example, if

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<v Speaker 3>we're going to create crypto's new asset class, that's amazing,

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<v Speaker 3>what does that mean for equities? What does that mean

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<v Speaker 3>for fixed income? How is it going to change the

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<v Speaker 3>definition of these other things? And I think what we're

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<v Speaker 3>seeing is that first layer, who's in charge? How do

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<v Speaker 3>we define this? Who's in charge? Has finally started to

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<v Speaker 3>really take shape on a global basis, and we're starting

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<v Speaker 3>to see what those rules of the road are going

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<v Speaker 3>to be so that we can eventually get to a

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<v Speaker 3>place where crypto is just another part of the existing

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<v Speaker 3>and financial system as opposed to this super special thing

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<v Speaker 3>on the side, which is actually not to anybody's benefit.

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<v Speaker 2>Yeah, well said.

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<v Speaker 1>And even the coordination of the world governments on how

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<v Speaker 1>they can at least have some synergy in how they

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<v Speaker 1>view this asset class.

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<v Speaker 3>That requires harmonization. Yeah, that's actually the European word for it,

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<v Speaker 3>is you have to harmonize regulations across the Eurozone. But

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<v Speaker 3>given the way crypto markets work, you will need to

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<v Speaker 3>actually harmonize a lot of this legislation on a more

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<v Speaker 3>global basis to make sure that it works together in

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<v Speaker 3>some way. And I think that's what we're seeing is

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<v Speaker 3>there's as that clarity is coming through, As we're starting

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<v Speaker 3>to see global standards for how you can do these

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<v Speaker 3>things emerge, we will start to have a much clearer

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<v Speaker 3>way to build sustainable real businesses in this sector, which

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<v Speaker 3>is ultimately what we need to have staying power through

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<v Speaker 3>market cycles.

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<v Speaker 1>Oh, absolutely, final the question for I let you go,

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<v Speaker 1>what's on your roadmap that you can share?

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<v Speaker 3>So you know, obviously we just announced the acquisition by

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<v Speaker 3>falcon X, so sure one of the things that we're

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<v Speaker 3>really excited about is how these two firms together are

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<v Speaker 3>going to build a one stop shop in crypto strength

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<v Speaker 3>and derivative strengthen trading strength and regulated product and how

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<v Speaker 3>we're going to be able to use that as a

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<v Speaker 3>cornerstone for bringing more creative, more innovative products to market,

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<v Speaker 3>stay on that bleeding edge while doing things faster, better

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<v Speaker 3>and more cheaply than trad five players and then other

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<v Speaker 3>players in the market. So I think, really that's what

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<v Speaker 3>you can expect from us.

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<v Speaker 1>Well, I'm looking forward to the updates. We keep an

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<v Speaker 1>eye on twenty one shares. Thank you so much for

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<v Speaker 1>joining me, Philli, thank you.

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<v Speaker 3>For having me.

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<v Speaker 1>This episode is brought to you by Proppy, which is

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<v Speaker 1>leading your charge in putting real estate on chain. Propy

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<v Speaker 1>Propy token since twenty eighteen. So Propy is a licensed

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<v Speaker 3>Two