He's saying he should have questioned this sooner.
He should have questioned some bank men freed.
We can all look into the rear of what we should have done.
But. Should you as an industry have been
pushing and probing deeper and harder with Sandbank, I'm afraid?
I mean, hindsight's 20 20, right? Yeah.
Obviously, the industry, whether it's regulators, whether it's users, whether
its partners should have questioned RTX moves, I guess with with a pinch of
salt, because I guess if it's too good to be true, it's probably not true.
And the size and the way that FTSE used social ways to verify their legitimacy,
whether it's working with top NBA players, whether it's working with
global brands, sponsors for Formula One, you really see that there's a social
element to whether they're legitimate or not, as opposed to public companies
where you'd be able to see the financial health of the companies, actually.
And I think the investors are ones that should have done a lot more due
diligence before because FTSE raised loads of capital.
They had one round where 420 million dollars were raised, out of which 300
million were used by the founding team for personal reasons.
So lots of fraud happened. Just be very careful.
Yes. Just before you jump in on this, we just
need to be very careful when you use the word fraud because you need to give us
the evidence of what you believe fraud is.
So we'll come back to that in a moment. Yes, charities.
Yeah. I was just about to say investigation is
still ongoing and much still to be determined on FTSE.
But in terms of the implosion itself, Paul Allen had a cataclysmic impact on
the crypto space. Before we get to the opportunities that
that brings with it, could you give our global audience a bit of insight on how
Coin Mino was affected, either in terms of headcount, in terms of liquidity or
any other observations on counterparty risk?
Yeah. Sure.
I mean, as part of coin means we use multiple liquidity providers, we use
about 40 exchanges. So we were not negatively affected by
the FTSE issue. FTSE weren't an investor in COIN MENA
using LME does venture arm. About a year ago.
So now we have about 3 percent ownership.
That's my LME. Then we ask to buy back those shares by
the liquidators so that we will that process will take its path.
But I guess risk management is something that is heavily underrated in the world
of crypto. And it's going to you know, we were
fortunate to have those in place where we didn't have exposure to the FTSE
fiasco from a liquidity standpoint. So you're optimistic that you'll get
your share of the company back? One of the things that Sisi brought up
with his lender last week was about proving to the world your liquidity.
One exchanges could add liquidity. A brokerage is liquidity, proof of
reserves and proof of liability. Will you?
What will you do to deliver proof of reserves?
Proof of liability to the market place? Actually, we think of it actually a
little bit differently than by NASDAQ, FTSE and others.
We believe that custody and execution liquidity should be separate.
So that coin means we use bit go, which is a regulated custodian that doesn't do
any trading. Any liquidity.
Their only goal is custody. So it's going mean customer funds are
stored at bit go and we execute trades with other counterparty.
So we believe that exchanges that do liquidity and execution of trading
shouldn't be the same entities that do custody.
And I think that in the coming five years, we'll see significantly more
stringent regulations about the separation of custody.
If you look at how traditional markets have operated historically, that's one
thing that crypto can definitely learn a lot from traditional finance.
TIL I understand you're a private company still, and so there might be a
reluctance to reveal too many numbers, but I'm still going to push you on that
in terms of scale. What kind of consumer base are you
looking at? How many customers do you have?
How do you see that going into 2023? What kind of investments are we looking
at? Just as some number.
Sure, I'll give you the numbers. No worries, we.
We operated last year, we started operating last year.
And during the bull market, we grew aggressively from a marketing
standpoint, going from about 2000 users to two hundred and forty thousand
verified users. Having said that, obviously retail
interest in the past month has went down, as you can imagine.
The recent events obviously have reduced interest in crypto in the short term.
We see that in the number of sign ups on coin mean and other exchanges play out.
We have about two hundred and forty thousand users.
They're more active when it's the bond market.
And obviously when it's the bear market, you have people either waiting and see
to to what's happened and others that have more long term output, long term
outlook are basically splitting their purchases over time.
Going back to the proposition as we understand it, just growing in size and
will have and has a dominant position in this marketplace.
And one of the ideas during that interview was a fund to save those
companies that go under a billion dollars is what's easy touted in the
interview with Haslinda Amin in a blog post, he said two billion dollars is
what it would take to give confidence back to the market.
Do you think a bailout fund will give confidence to crypto?
Well, you're smiling wryly. Should it be 2 billion?
Will you contribute towards this fund? Yes.
So anything that's positioned in a Samaritan way like this is to save the
industry. That's not something usually I buy into.
It's important to remember that FTSE. Also, we're supposedly bailing out other
companies. So I think it's times like this.
I guess it's important to wait and see before making any rash decisions to bail
out other companies. So I think by Nancy's moves to set up
that fund, there's probably more profit oriented than it is to to to like save
the industry. I guess as going Mina, we don't make any
investments in other crypto companies because of the counterparty risk.
Can we focus on just doing what we do and in a proper way from a risk
management standpoint. So we're great at custody, execution,
etc. Not at investment.
We. Yeah.
And I don't think crypto exchanges should be investing in others either.
Know from your 240000 active users, what have you noticed in the last couple of
weeks in terms of buying and selling patterns, is any particular crypto play
that's more involved than others? What are some of the conclusive trends
that you're able to make at this point? Yes.
The buy percentage has significantly skewed.
So it's usually around 60 40 on the buy sell side.
Now we're seeing closer to 65, 70 on the buy side versus 30 on the sell side.
We're seeing a lot more interest in Bitcoin specifically over the past
month. I guess
when times are turbulent, people move away from more risk on assets and in
crypto. Bitcoin is considered risk off.
So we see a bit more focus on that, which I think is a positive development.
You're a deep skeptic, which has come through and they say from from
financiers saving grace to the crypto industry.
So what what can you tell me? Well, if you project forward, you've got
FTSE X and you have three arrows here in the region are coming under pressure,
failing if you want. Do you think the virtual assets
regulatory authority is going to be a lot more aggressive in terms of KYC and
in terms of institutions before any new licenses are granted?
Do you think it's gonna be a clamp dying and a demand for information?
Yes. So I think it's very important to make
the distinction that these entities actually failed because of regulatory
arbitrage and issues that did not happen under voters.
Watch. We had issued provisional licenses to
get the ball rolling on on on regulations.
And I think that this will actually make voter and regional regulations stronger.
But Dubai has not been afraid of making big bets historically.
Right. If it's something that's easy, then
everyone would have done it. So I think that the Virtual Assets
Regulatory Authority wasn't established to govern entities in six months.
It's more of a long term play. It's.