Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Jesse Powell: How Kraken Accelerates Cryptocurrency Adoption

Episode Date: November 13, 2019

As the cryptocurrency space has grown, exchanges have become the dominant juggernauts of the industry. One of the earliest and most reputable exchanges is Kraken. From the company's formation in 2011, Kraken has grown to 4m users and almost 1,000 employees.We are joined by Kraken Founder and CEO Jesse Powell. We dove into the history of Kraken, their values and the vision that's driving them.Topics covered in this episode:How selling virtual goods for games led Jesse to discover BitcoinWhy cryptocurrencies will lead to a better financial systemHow Kraken launched and ended up getting strong traction in EuropeThe challenges and changes of the regulatory environmentHis thoughts on DeFi and decentralized exchangesKraken's approach to listing assets on the exchangeHow to create a strong culture in a distributed companyHis vision for Kraken to become a general trading and investment platformEpisode links: KrakenHow to Grow A Decacorn | Crypto Podcast | KrakenHow to Trade Crypto On KrakenKraken on WikipediaKraken Exchange TwitterJesse Powell TwitterSponsors: Cosmos: Change the future of finance at the SF Blockchain Week Defi Hackathon – $50,000 prize pool for winning teams - https://epicenter.rocks/sfcosmosTrail of Bits: Trust the team at the forefront of blockchain security research - https://trailofbits.comThis episode is hosted by Sebastien Couture & Brian Fabian Crain. Show notes and listening options: epicenter.tv/313

This is Epicenter, episode 313 with guest, Jesse Powell. Hi, welcome to Epicenter. My name is Sebastian Kujo. Today our guest is Jesse Powell. Jesse is the CEO and co-founder of Cracken. Cracken was founded in 2013 and has since become one of the largest crypto exchanges in the world. I met Jesse briefly at SF Blockchain Week and I thought that he was a really down to earth kind of guy. And we'd never interviewed him before. So it seemed like the perfect. opportunity. I really enjoyed our conversation with Jesse because he's someone who has a lot of context for what's happening in the space since he's been in an ecosystem for so long. And also,

he's someone who thinks deeply about the state of money and the role of money and government in our society. So I hope you'll enjoy this one. Brian and I went really deep with Jesse talking about the state of the ecosystem and the role of Cracken in that context. There's something else I'd like to bring up before today's interview. Recently, we implemented a small change where I started talking about our sponsors at the beginning of the show rather than in pre-recorded ads played during the interview. And what's been interesting is getting everyone's feedback on this, you know, what seemed like a small change. And I want to thank everybody who reached out to us and gave us their feedback because it's been really helpful to understand the

outcome of this experiment. The feedback's been kind of mixed, but I think there's two key takeaways after doing this for a few weeks, and I want to share them with you. The first takeaway is that people seem to like having me talk about the sponsors at the beginning of the show. It sounds more organic. It feels much more natural to me. And I like to be able to tell you about our sponsors and have that flexibility to update you on what they're doing week over week, you know, tell you about blog posts that they may have released or events they might be going to or product updates and things like that. And so it just feels like a win-weigh. win for everyone to be able to tell you about the sponsors and having them be part of the conversation

that we have every week. At Epicenter, we've always been very selective about our sponsors. We only work with companies whose products we use or who we think are providing value to the community. And I'd rather be able to tell you about them in a way that feels natural than in a pre-recorded segment that gets plopped into the middle of an interview that you get tired of hearing after a while anyway. So that's the first takeaway. And the second takeaway is that the intros are getting way too long. I mean, people have been coming up to me and telling me like, dude, what's up with these 20 minute intros? They're way too long. And I get it. People just want to get to the interview. So moving forward, you should expect the intros to be much shorter. We'll have a very brief

introduction about the guest. We'll have brief housekeeping to tell you about things like events we're going to. So we'll just give you a link and you can go to it if you're interested. Then we'll talk about our sponsors and get to the interview. And all the other conversations that we usually have during the intro, whether that's debriefing a recent event or, you know, talking about the key takeaways in an interview, I think we'll move that off of the podcast. We'll move that into another format in another place where if you're interested in that kind of stuff, you can listen to it.

But at least, you know, those who are here for the interview and that's what that's what most people are here for, you know, they can press play and within a few minutes get to the content. So I want to thank you for your patience and thanks for your feedback. And once again, if you have feedback or if you have any thoughts on this, shoot me an email Sebastian at Epicenter.tv, S-E-B-S-T-I-E-N at Epicenter.TV or just send me a message on Twitter. So with that, I'd like to now tell you about our sponsors for today's episode. As you know, Cosmos was recently the sponsor of the Defy Hackathon at SF Blockchain Week. Sunny and I were both there.

It was a huge event with over 600 participants. And what was really cool was to see projects leveraging IBC to create interoperability bridges with other zones in the Cosmos ecosystem. Now, you might remember that before Cosmos launched, there was this thing called Game of Stakes, which was an adversarial test net challenge where all the validating. got together and participated in a test net in order to learn about how this new proof of stake network was actually going to work because this had never been done before. Well, similarly, with IBC, an interoperable network of blockchains has never existed. So they're now doing Game of Zones, which will be a TestNet challenge once again that will create an opportunity for everyone to

learn about the nuances of the IBC protocol. So Game of Zones is due to start in December or January, They haven't quite committed on the start date yet, but they should be coming out with that soon. And the Interchained Foundation is providing 100,000 atoms in a prize pool. So unlike Game of Stakes, there won't be just one winner, but rather a multitude of challenges and prizes attached to them. So to learn more and start discussing with the Cosmos team and other teams in the ecosystem, go to cosmos.network slash GOZ, and you can join them. the riot chat there to get the conversation going. You should also sign up for the newsletter

where I'm sure they will be updating everyone on the progress of gaming zones and you can sign up at cosmos.network to scroll down to the bottom of the page. You'll see the sign up form in the footer. I would also like to tell you about trail of bits. You know, keeping your smart contracts secure is a big undertaking and you need to work with experts to do this. You can't just leave this to anyone. smart contracts can hold a lot of value and any hack or major vulnerability could cause you and your project a lot of reputational damage or worse. And Trail of Bits is really at the forefront of security research. And boy, it's really hard to keep up with everything that they're putting out and writing.

So since I've last told you about Trill of Bits, they've put out two new blog posts. One is on security assessment techniques for Go projects. So if you're a Go developer, you really want to check out this post. I mean, most of it goes over my head. But I'm sure that if you're an experienced Go developer, you will learn a lot from this post. And the other which came out as I'm recording this is about test case reduction. So test case reduction for humans, for machines, and all about implementing best practices when doing test cases. So once again, if you're a developer and you want to learn more about these talks,

topics, go to their blog, blog.trialibits.com. And if you're interested in working with TrillofBits, you know, there are a number of things that they can do for your and your team. Of course, they can audit every aspect of your project. They check your smart contract code, but they also help you implement best practices around things like DevOps and key storage and even your user-facing applications like your website and your app, your mobile app. They can even put a software security expert at your team's disposal. So if you don't want to hire someone to do software security, at least give yourself the benefit of having someone at your disposal who can answer your questions when you need them. It's absolutely pivotal if you're

building any smart contract infrastructure. To learn more about Trail of Bits, go to Trail of Bits.com, and if you decide to reach out, make sure to let them know you heard about them on Epicenter. We'd like to thank Cosmos and Trail of Bits for those support of the podcast. And with that, I'd like to bring you our interview with Jesse Powell. We're here with Jesse Powell. Jesse is the co-founder and CEO of Cracken. And we're very excited to have the opportunity to interview Jesse today. Jesse, thanks for coming on the podcast.

Absolutely. Thanks for having me, guys. So starting off, I think your origin story has been told many times. But just for some context here, tell us how you first got involved in crypto. Yeah, so I just randomly read about it sometime in early 2011. It was probably like March 2011. And there's just some blog. I don't even remember which one it was.

Some article about Bitcoin. And I just thought, well, that sounds really interesting. You know, I already was in the business of dealing in virtual goods for about the last 10 years at that time. You had a company selling virtual items and currencies for online games like World Warcraft Gold and Diablo swords and all kinds of stuff. we did about 20 different games. So when I read about Bitcoin, I was like, oh, maybe we can sell this Bitcoin stuff on our website, along with all this other stuff we're already selling. You know, it's just another virtual currency.

But then as I got more into it, you know, I became, you know, more aware of like what it really was. You know, it was much more than just another kind of World of Workcraft gold. And I had been familiar with other things in the past, like e-gold. And, you know, I knew about Liberty Reserve and I knew about these other sorts of forms of digital payments that were all, like, kind of very sketchy and subject to be shut down by the government, you know, at any time. So, you know, and this is like one of the problems for World Warcraft gold as well. I think, you know, even though World Warcraft had maybe tens of millions of players, you couldn't really rely on it as a bank account because, it was centrally controlled. There's just one guy who could shut off your account, you know, any time.

And you'd basically lose your whole savings without recourse. So, in fact, that did happen to people occasionally. You know, the real appeal of Bitcoin was that this was totally decentralized and there was no way to shut it down. And, you know, actually, as I was learning about Bitcoin, I got more into just how does the money system actually work, you know, how's the Fed work? How does Fiat work? just apparent that this system was a scam.

You know, fiat currency just lose value over time until they eventually blow up and are replaced by something else. So, you know, I think that the dollars is about, you know, on schedule to blow up sometime soon. So, you know, I think Bitcoin was just appealing in that if you could actually have a global currency that was not controlled by anyone, that was finite, that was predictable. you could maybe solve a lot of the world's problems, you know, that are kind of created through this inflation process, you know, which basically finances endless wars and ridiculous, unsustainable policies and things like that, you know, like what would happen if a government was actually forced to balance a budget, or people actually forced to be made aware of what they're actually financing, you know, and also if people weren't forced to really think hard about the

investments they're making, you know, just to have a store of value, you know, like, you can't just leave your dollars in a bank account if you want to store your value. You have to actively think about putting your money into something else that is not going to depreciate at the rate that the dollar's depreciating. And I think for most people that are living just paycheck to paycheck, like, that's just not something that they really want to think about doing, you know, I think people ought to be able to just leave what they earn in the bank and have that not just depreciate over time. So Bitcoin was appealing to me for many reasons. And, you know, I haven't even gotten into like all the reasons why I think just practically as a currency, it was good. And,

you know, it solved a lot of payment problems that we were having at that virtual goods business, which were like just dealing with credit cards and chargebacks and micro transaction fees. And, And international customers or customers who were kids and didn't have credit cards. So just kind of the ungated nature of Bitcoin solved a ton of those problems. So it was just like the value proposition of it was obvious to me back then. And I just kind of dove in. Yeah, it's interesting. I mean, I think we've done a few interviews with people where they kind of came from this, you know, this virtual good space.

I remember also Brock Pierce, right? I think he also came from this area. Yeah, actually no Brock from the business from back. Yeah. What did it kind of look like when you started taking Bitcoin seriously? Did you initially try to sell it through that website, or did you, you know, pretty, or like, how did that sort of lead into working on in exchange? Yeah, we didn't actually ever start selling it through the website,

although we did start using it to buy gold and other virtual goods from our suppliers. And so, you know, there are probably a lot of guys out there who sold us something, sold this World Warcraft gold or something, you know, back in 2011 who, you know, are sitting on a mountain of Bitcoin now. You know, so we did that and that was huge because we were having to jump through many hoops to send money to China back then because of the cap. So there's like a $50,000 cap per person per year that you can convert from dollars into Chinese Yuan. And we were buying like $100,000 a week of World Warcraft gold from China.

So that was like two new people every week that we needed to find to do this trade. But after we could start paying for some of it in Bitcoin, that obviously alleviated some of that. So that was great. But yeah, we never started selling it on that website. I started doing some mining, started doing some trading on Mount Gox. We actually set up a forum where we tried to encourage gamers to use Bitcoin to trade for virtual goods. I didn't really catch on. I think it's probably a little too early.

Eventually, after Mount Gox got hacked in June of 2011, an old friend of my, Roger Veer happened to be living nearby Mount Cox at the time. He was also in Bitcoin at the time. This was like two weeks after I got into Bitcoin, Roger sent me a message. saying, hey, have you heard about Bitcoin? And I was like, yeah, I've been like, you know, totally in it, like doing nothing else but Bitcoin for the last two weeks. And then we kind of just like, you know, nerd it out on Bitcoin. And he, so he fortunately was just like living next to Gox when they got hacked back in 2011, like for the first time that we know of. And he went over there to find out what was going on. You know, there was like two guys in the office. One had just been hired yesterday.

And they obviously, like, needed some help. So he calls me up and asks if I can come out to Tokyo to help them out. And I did. I was on the next plane to Tokyo. Is there for like a week and a half just helping them kind of get back on their feet? And came away from that experience thinking, okay, there's got to be more than one exchange. And I think we could do it. And we've got to do it like in a really legit way. I think if we're ever going to bring Bitcoin to the mainstream. And we've like, we've got to connect to the legacy system. We've got to get regulators comfortable, banks comfortable. we've got to sort of build this bridge to the new world. And once we get everyone over the bridge,

maybe we can light the bridge on fire and burn it. But we've got to get like everyone to the other side. And you're not going to do that by being this kind of like dark market like back alley exchange. It's trying to like skirt the laws and serve some niche like gambling market or something. So, you know, from the start, we had the approach that, okay, we're just going to do this like totally legitimately. we're going to be extremely careful about security. We're going to be extremely careful about our compliance responsibilities and basically just like be an exchange that would be sort of a good example, you know, for the regulators in the

traditional industry and get them comfortable with the prospect of Bitcoin being out there and traded. So, you know, I started the company with a guy who's our CTO at the virtual goods business, who was like the best hacker I've ever met. and also as a hobby was like writing bots for for trading stocks and stuff like that so sort of like the perfect guy to start in exchange with and if I didn't have somebody like him I probably would not have started the exchange just because of the complexity involved and the risks involved and especially the security stuff it was just extremely difficult so yeah you know I asked him

if you wanted to do it if you wanted to start an exchange and he was game so we went for it we got started in 2011, finally actually launched the exchange in 2013. We're actually delayed by like six months because early in 2013 in the United States, FinC released some guidance that basically said, like, explicitly cryptocurrency is regulated and you need to be doing KYC and all this other stuff. So we ended up having to postpone the launch to build in all these compliance tools that we didn't think we were going to need yet. I remember a bit, right, that you actually started working on it really early on,

and then it took quite a long time to launch. Did you end up also launching in Europe first? Was that right? Yeah, so it was just sort of by coincidence or necessity that we launched in Europe first. We unfortunately were not able to get a bank account in the United States for years, actually. We'd found like a small bank, and we quickly got. of outpaced their processing ability. I mean, like, their wire transfer department was basically, like, you know, two guys.

And once our transfers started to pick up, you know, we were basically, like, 100% of their wire transfer business. And they said, like, look, we're going to have to, we're going to have to hire, you know, like 10 more people to do all your wires. And we can't really, like, justify doing that because we don't know if this is just like, a, you know, like a fad or something, a blip. You know, we can't, like, add 10 people to the payroll and then, you know, have to fire them like two weeks later.

So, you know, they were also kind of concerned about, like, the risk profile of the business. And so they shut off our account. So, you know, that was kind of short live. We didn't really have availability in the U.S. or for U.S. dollars for very long. Did it occur to you? Just say, like, maybe we need to buy a small bank and just, you just, you know, piggyback that license and sort of grow.

Because it seems like, you know, if the company is able to do it, like that might be a good route to go down. Yeah, I mean, back then, that was not an option. We just didn't have the money to do that. But later down the line, yeah, I mean, we could, we could potentially do that today. The reason not to would be, I mean, things have developed a lot over time.

So I think for the most part, like banks are getting softer and more willing to work with Bitcoin companies. But you're always at risk of your intermediary banks, not wanting to process your transfers. So, like, if you're sort of like the crypto bank, if you're like, that's your business and they know that's your business and you don't really have, like, other business outside of that, I think it's easier for them just to say, like,

this is a high risk bank. They're doing high risk business, the compliance burden on us, you know, we think with, with like processing these transactions is too high. We're not going to process your transactions. And so, you know, unless you're one of the major kind of like nodes on the banking network, you're going through these intermediaries. And I mean, even even the major nodes effectively can block your transaction. So it's not just like having a bank account. It's not really like a peer to peer system. So yeah, you've got to deal with all of these intermediary banks who effectively are like running compliance checks on you.

The bureaucracies run deep is what you're saying. For sure. Yeah. I mean, every hop in the network is basically required to like police you, unfortunately. You know, so we actually kind of launched in Europe first just by chance. I mean, we were able to get the bank account with Fedor Bank in Germany very early. And I mean, that was just by luck. and also by luck for us, Mount Gox was the only other Euro market at the time.

And when they collapsed in 2014, we basically absorbed that entire euro market business. So that's kind of how we got started in Europe. And eventually, you know, the U.S. opened up and other parts of the world opened up. So it sounds like it was a combination of good timing and also a little bit of good luck. Yeah, absolutely. that the business took off so strongly in Europe. Cool. Well, there's so much to cover on this side,

but I think this part of your story has been covered quite extensively, numerous other podcasts and online. So, you know, we do want to spend a considerable amount of time with you talking about the ecosystem and sort of like where you see things at the moment and how you see things moving forward.

I think that's really the valuable insights that we're trying to bring in the audience. You know, a lot has happened since 2011 since those first years when you were getting involved in Bitcoin and since Cracken has been founded and has grown to becoming one of the largest exchanges in the space. But looking back on the last year, I mean, we can use this to frame the discussion. What do you see is the most significant shift that has occurred in the last year or so with regards to the crypto space in general?

Good question. I feel like we keep going through these cycles of Bitcoin blockchain, Bitcoin blockchain, I think we've seen regulators take notice finally. I think Lieber is a big part of that. But you see more governments kind of coming around and getting a handle on, you know, what, like, crypto means for them and what choice in currency potentially means for their money. So I think, like, that's sort of like the theme of at least like the second half of this year. I think it's going to be interesting to see how this plays out.

But I think the cat's out of the bag, you know, the private currencies or corporate currencies and cryptocurrencies are all just going to be a thing. And people are going to have choice in which currencies they use. And I think it's going to kind of force the hand of governments to become, to make their currency more competitive, basically. And, you know, I think that'll mean tokenizing. I think, you know, it sounds like we're probably going to see something kind of. coming out of China, like a tokenized government-backed currency. And maybe that will force the hand of the United States as well in other countries to tokenize at least their currencies.

Whether that's a good thing, I don't know, right? That's kind of scary. I mean, personally, I like using cash. If I can't use cash anymore and I have to use this government currency, which is on some blockchain, which is completely transparent, you know, that's kind of scary. So we'll see where this goes. But, you know, hopefully it's sort of just, it serves as a game. gateway drug to people getting into true crypto like Bitcoin, which can be more private.

And obviously, you know, just better, better in the long run. Yeah. I mean, that's what I'm seeing for this year. There's obviously all sorts of different things going on. It's great to see that crypto keeps growing. There's some very cool stuff happening in Wyoming where the governs past 13 blockchain bills, which make, you know, working there. which make being a consumer there much safer and more understandable.

And, you know, they have clarity about how things work. So I think we'll also see more governments try to do that to give themselves sort of an economic leg up on the competition in terms of like where people locate their businesses. Yeah, totally. One thing I'm curious about your thoughts on. So you're obviously very, you know, kind of like mission-driven. and you're committed to Bitcoin and cryptocurrencies and, you know, kind of like the change they can bring to the world. And, you know, at the same time, you have in an exchange, right, you have this model that you give up custody, right? So you have this natural tension in a way of like the

one of the core ideas of crypto assets is that you kind of control your own assets and then. And so how do you kind of like reconcile that? Was that like, when you, you know, like, when you you, when you started cracking, is this something that, you know, concerned you? And, like, how was you thinking evolved around this asked, just this question of, like, who custodies the funds, who has kind of, like, control of the private keys in the end? Yeah. You know, I think we all know what the consequences can be of not holding your private keys. But, you know, I see this, the current state of things is sort of, uh, the, the bridge state, you know, like I, I don't, expect and I don't hope that, you know, it's going to be like this forever that the exchange has to

be a centralized custodian. I hope that, you know, eventually we get to some sort of hybrid model where people can hold their own keys and they can still make trades somehow, you know, with some sort of maybe a credit relationship or, you know, maybe trades slow down substantially. But, you know, they have full control of their keys through the whole process and it's just more like atomic swaps happening on the blockchain. I think there'll be developments in the tech along the way. I think this is just sort of like a necessary point where we're at right now and it's convenient. And I think, you know, my primary sort of concern at the moment is just getting the most people possible into crypto. I think we really need to hit this like critical mass

before the government governments around the world, you know, decide that they could do something about crypto if they wanted to. You know, I think just growing the size of the network is really important in doing it quickly is really important. And I think to do that, we just need to provide the best user experience that we can. And that is not, unfortunately, going to be everyone has to control their own private keys. And, you know, you've got to, like, I don't know, find ways to get into Bitcoin that aren't, you know, through centralized services. You know, so I think I hope that, you know, longer term, people don't have to keep their money on the exchange. But for now, I think it's just necessary for the user experience to get people on.

You know, you need exchanges to, in other sort of broker-type businesses to offer Fiat Rails. So somebody has to integrate with the banking system to get people on and off in a convenient way. And, you know, unfortunately, like, the centralized wallets are far more convenient than a decentralized wallet. if you're actively buying and selling. But I think the user experiences are getting better. And hopefully over time we just see kind of a shift away from the centralized services onto people holding their own keys and their own wallets. And the cold storage stuff is getting better and easier to use.

But I would still say for most people, if they're not holding a ton of money, it's just probably easier to use a centralized service. because you also have the risk that you will somehow screw up your cold storage and lose your keys. And, you know, that's not a very good user experience either. Quite a few centralized exchanges, you know, most notably Binance, but I think also like BitFenex at some efforts around that to, you know, I've been working on creating decentralized exchanges. Is that something that, like, do you also imagine in the future that maybe crack in itself would become more with decentralized exchange, or maybe is it something that you guys also have, like, work going on

in that direction? Yeah, we've got, like, some research going on in that direction. Nothing, like, actively in development yet. But, yeah, I would like to see us at least have an option to do your trades in a way where you maintain control of your keys to do the process. You know, like I said, there's some hybrid models out there. You know, the trade-offs, right now. Like the dex is not super great. Yeah, yeah. But yeah, I think eventually, you know, it could be that we completely

swap out the current like custody and matching system for a decks. And then we're just sort of like a customer service and banking gateway sort of layer, you know, on the decks, which would be great. And that'd be fine. You know, I think there's still

there's still a lot of value that we can provide even, you know, in a decks type of world. I'm curious on your previous point, I thought it was a very interesting point, right, that we basically want to get to enough adoption so that like a government crackdown becomes really hard and, you know, you kind of can't stop this momentum anymore that the space has. Like, what do you think the scale that we need to reach for that is necessary? And what do you think are some potential risks if we don't reach that scale and then the

governments really do start to try to like crack down aggressively on crypto. Yeah, it's a good question. I don't know kind of where that tipping point really is. I mean, you can kind of look back at like what happened with PayPal and I guess like to some extent what happened with Uber, you know, and there's just like get big fast kind of strategy where like even if you're breaking the law all along the way, if you get big fast enough and you have enough users who have become dependent on your service, you can leverage those users to lobby the government,

to allow you to keep doing what you're doing, even though, like, technically, it might have been illegal this whole time. You know, like, maybe you get the law changed or some exception made or whatever. And I don't know, like, where that is for Bitcoin. I don't think we're anywhere close to it, you know, unfortunately, at least in the United States, right? Unfortunately, like the countries with, I think, the most power over, you know, the most users of Bitcoin are the countries where the use case for Bitcoin is, I think, like, not as strong, right? Like, it's probably strongest in a place like Venezuela, but the Venezuelan government doesn't really have that much authority, like, internationally. You know, whereas, like, in the U.S. and in Europe, the governments have tons of authority internationally, and the use case is not that strong because people have tons of other. are great working payment options and, you know, it's easy to buy gold and whatever else.

You know, there's, you can invest in stocks. It's not, you know, people generally have access to all sorts of financial products. So, you know, I think, like, I don't know what it's going to take to get people in these countries more interested, but probably, you know, I think we're, we're just starting to see the cracks in the system, you know, people worried about stuff like the repo market and just the system. potentially breaking down at some point, you know, I think Brexit as well as like another kind of sign that like maybe things aren't, aren't going to be the same going into the future. They're easily accessible. And in these places, like Bitcoin doesn't really have a use case.

Where we're seeing a proper use case for Bitcoin as money is in places like Venezuela, like, you know, where like there's a good product market fit there. You know, if you look at Bitcoin as a product, there's a perfect fit in a place like Venezuela. Are you more of the opinion than that, you know, there needs to be sort of a radical shift in our economic landscape in order for Bitcoin and crypto in general to gain traction and succeed in places like the U.S. and Europe, is it going to take like a massive financial shift, like a massive financial crash, for instance, for that, for people to wake up to the fact that, you know, their money is unsound and that there are alternatives out there like Bitcoin and crypto?

Unfortunately, I think so. I think people tend to, you know, look for ways to alleviate their pain. And, you know, this is why, like, Uber is so successful, just like it's so hard to get a taxi in the United States, you know, almost anywhere outside of, like, New York City, that the Uber experience was just like a life changer. And that doesn't really, you know, exist with crypto right now. Like, there's not a use case for me. me that's like changing my life with crypto. Although, you know, I think one thing that is increasingly reinforced is that this notion of like digital privacy and, you know, there's just like data leaks constantly happening that there is a cost to entering your personal information into the computer every time you buy something online. Right? I think this is, this is like a very strong use case for people in the Western world who generally have access to financial services. Yeah, but it's a different use case, don't you think? Because like financial sovereignty and privacy, although they may overlap at some point, you know, they're a little different. So I see one as,

you know, the use of blockchains to build something like, you know, a decentralized social network or like something like status, right, where one's data is encrypted and they can communicate with their friends and family, like, in an encrypted manner, like, people's bank account and their ability to, like, transact and know that they're going to have enough money to eat more. Like, that's a different thing. Yeah, for sure. Where do you see people's, like, because I mean, I think that for the financial sovereignty application, it might take a drastic event, like, for that use case to emerge as, like, the one thing that people flock to on the, privacy side, I think that might resonate with a lot of people in the crypto space, but

outside of that, the majority of people are still using Facebook, et cetera. Unfortunately, it seems like maybe people just don't care about privacy. And then, you know, then I don't know what it's going to take. I mean, even, I even question whether a financial, a major financial collapse kind of issue, you know, unless it's at the scale of like Venezuela, would be enough. I mean, you just look at like the adoption of gold as well, right? Like people could have bought gold before there was Bitcoin. And, you know, I could probably like 1% of the people that I know had gold, you know, before Bitcoin.

So, you know, I just, I think most people are going through life. I'm just thinking everything's going to be okay. It's working now. If there's a problem, I'll deal with it when the problem is at my door. So, you know, I don't know, honestly, I don't know what it will take to get people to become better prepared, I guess. You know, the idea of crypto as kind of better money and a better store of wealth and, you know, as a protection from this potential, you know, let's say collapse of the U.S. dollar or other fiat currencies. Do you think that will be the primary way of crypto getting mainstream adoption? and maybe the primary use case, or do you feel like there are other use cases that might be,

you know, one where a lot of the value is being provided for crypto, or maybe that end up being a sort of gateway to get people to adopt decentralized technologies and crypto assets? Yeah, I think there could be some other sort of gateway things. You know, I think that these like stable coins actually could be a good gateway. Like if we can get merchants to adopt stable coins, that could be a gateway in. You know, I think also if we see more fracturing within the EU and if we see more national currencies emerge, that could play a part, right? Like, I don't want to constantly, like, change currencies, you know, three times in one day as I'm traveling through Europe.

So maybe, you know, something like that, some new, like, reintroduced friction in payments somehow could cause. to be more adoption, if not of Bitcoin, but of some sort of multinational stable coin kind of thing. I think stable coins are a great gateway. I think they're also probably more acceptable to merchants who don't want to take volatility risk. So I hope that we see the proliferation of stable coins and of their acceptance as payments. And then once everyone has a stable coin wallet or whatever, you know, if the Square app is taking stable coins, square cash or, you know, other PayPal or whatever, if they can support a stable coin balance, then, you know, maybe they'll support a Bitcoin balance at some point as well.

And people will just realize, like, why am I holding on to, anytime I'm holding onto a balance that I'm not ready to use, I should just be keeping that in Bitcoin because, you know, my Fiat coin or whatever's going down. But, you know, other blockchain use cases that I think are interesting are just like the tokenization of assets generally, which once tokenized, you can use as collateral for all sorts of stuff. So like if let's say you could like tokenize your house, you know, that's useful in that maybe you can you can sell your house without having to deal with all this crazy escrow and title

insurance and all of this stuff. You can track the ownership. And you could post your house, you know, conceivably like, with. anyone, you know, some sort of like multi-sig contract as collateral for something and, you know, then get it back when you're done with that contract. So I think there's like really cool, or like just really cool defy stuff that's coming. I think there's also cool like provenance stuff, like, you know, tracking the the authenticity of luxury goods, for example. So yeah, I think there are other other use cases for blockchain that will maybe expose people to.

to crypto. I'm not sure that these things like necessarily translate though to to seeing, you know, the value prop for Bitcoin. I kind of see like holding Bitcoin is like holding gold and just because you're doing all sorts of other things doesn't necessarily mean like, you know, you want to hold gold or Apple stock or, you know, anything else. If, you know, if you're living paycheck to paycheck, you're not really thinking about making investments. So you mentioned a defy thing, which has been a bit of a, you know, I think a lot of attention is gone into that. know in Ethereum has become kind of the most, the most adoption is around Defi use cases with things like Maker or Compound. And, you know, I think we're starting to see sort of the earliest

signs of Defi in other ways to, whether that's with cross-chain stuff or, you know, people trying to move maybe Bitcoin off the Bitcoin chain. What do you, what do you think is the value that Defi will bring to sort of a wide range of people? and maybe like i mean the tokenizing of assets is and so is increased asset utilization do you think that's kind of the thing or do you see other yeah well i think the main appeal is that it's it's not centralized and you know you don't have to get k y cd to to now like earn a return on your ether for example you could be someone in the middle of nowhere with with no bank account no financial access, you know, completely shut out of the system. And now you have a way to

to participate, you know, in investing in stuff. And even like just low risk stuff, you know, like you just want to, you want to hold your ether, but you know, your long ether, but you want to put it to work somehow and get a return on it. I think that's super cool. And I think just the more we see of that, you know, I don't think we're ever going to beat the old system at their game. You know, I think the best thing to do is just like, you know, stand up the new system. And there are billions of people who are excluded from the existing system. And also there's just the amounts of money that people might have to invest or to stake

or whatever could be just not worth a centralized business dealing with. You know, but if you can stake like, you know, $10 or something like that, you don't have to go through KYC process, deal with customer support, you know, walk into a physical location, whatever. I think you get much more participation at a smaller scale. So you kind of like get the last mile like, you know, these billion something people who are just working with amounts too small or they don't have KYC or whatever. They're excluded from the system.

So I think the impact of that, those people coming into the system will be huge. and I think they'll kind of start to provide this, you know, they'll kind of bootstrap the network and we'll see more liquidity come in. And I hope that, you know, eventually we sort of have just stood up an alternative system and people can kind of leave the old system and just use the defy stuff because it's super cool. I totally agree. I feel like it is basically just, you know, from the ground up, new, better. more open, more efficient, more transparent financial system. But one of the big challenges around it is that you have all of these existing regulations, right? And they, you know, especially when you start talking about defy, they seem to apply,

or at least the regulators probably think they apply. And even though they don't really fit well into it or it's kind of incompatible in a way, right, like the old-fashioned regulations. and then these new networks, new technologies. How do you see that playing out? And what are your thoughts on the regulatory environment, maybe especially in the U.S.? Yeah, I think the defy stuff could be tough with the regulators.

You know, like we've already seen at least one decks settle with the SEC. And, you know, a lot of these projects are still highly centralized in terms of like who's developing them. they're very transparent about who is writing the code. You know, they might have people out there representing the, there might be like an actual company behind the DFI product. So these are obviously like points of weakness, you know, when it comes to the regulators.

And I think, you know, it might take like a real kind of Satoshi type of person to, to launch a contract that isn't really tied to anyone's particular identity. And then you might need, you know, for a while some anonymous maintainers of the contract so that it's not something that can be attacked by regulators. But, you know, I think in the U.S., yeah, this is obviously a problem. I think the regulators, fortunately, it seems like they've kind of just been going after the lower hanging fruit and going after the obvious scams. But at some point, yeah, you could see them coming after basically software developers for writing this software that allows people to do things, which might be illegal in some particular jurisdiction.

You know, it wouldn't be the first time we've seen this. And it has one great thing about the new laws in Wyoming, actually. they make it explicitly not the developer's fault if something illegal is done with their software. However, you know, that's just in the state of Wyoming. It doesn't cover the federal laws and doesn't cover federal enforcement or international enforcement. So, you know, I think that probably we will see, if they do end up cracking down on some of these DFI products, I think we'll probably see them relaunch more anonymously. So I don't really see it being an issue like long, long term, unless they get really serious about sort of shutting down all of blockchain tech, you know, with like a firewall around the country or something like that.

Yeah, but they could they could theoretically enforce some form of action on exchanges not to engage with like these defy contracts, for example. like should one of these defy contracts exist, they could force companies like Cracken not to allow customers to withdraw their funds there, which would, you know, of course people could circumvent that, but that could be one way to hinder such a thing. I'd like to bring it back, though, in the context of regulation and specifically with regards to Cracken and like the exchange space, you know, a lot of the big exchanges, main exchanges like finance and who will be are outside the U.S., a Polonex is now shutting down U.S. operations. Give us your thoughts on what this means for Cracken and also how this relates to the U.S. regulatory

landscape. Does the U.S. have a competitive landscape for exchanges, or will we see all of the major players basically move outside the U.S.? Well, the U.S. is a huge market, so I don't think you're going to see everyone leave the U.S. We're committed to staying inside the United States as long as it's reasonable. But, you know, it's 20% of our business and 80% of our compliance costs. So, you know, it's very expensive to do business in the U.S. But, you know, part of our mission is to bring everyone into crypto.

You know, we're not going to do that by abandoning the United States. We've chosen to leave New York because of the Bit license, which was just way over the top, way too onerous and burdensome to deal with and attempted to regulate our entire global business. So it just didn't make sense there. But, you know, I totally understand why businesses are getting out of the U.S. We're now like 11 years into Bitcoin and we are still lacking clarity on many fronts. the regulators here are very active in cracking down. You know, there's just so much more you can do outside of the United States. I can see how, you know, for the sake of simplicity and just the cost savings,

you would just want to leave the U.S. and just say like, okay, we're just not going to deal with that because in almost every way, it's an exception to the rest of the world. You know, almost any product you would want to list would be legal everywhere else. almost any product you want to list would be illegal in the United States, and there may not even be a license available to you to list that product. So it's just so much easier to exclude the United States. But for us, we're playing the long game. We're trying to bring people into crypto, and we're committed to working it out here.

And so do you think Cracken will – because another thing that you see doing, right, is that there's just a segregation, right? And you have basically sort of different products. So you have like an American product and the international product. And many exchanges now seem to also get into, you know, some adjacent businesses, whether, you know, that's lending or maybe staking. I mean, you guys even have derivatives now as well. So do you think, like, how, where do you see cracking going in that regard? Yeah.

So we plan to launch staking. But, you know, we would also like to launch other products. you know, especially if we can provide it in the interface to other DFI products that are out there. I think that'd be really cool. I'm curious, how is your staking offering going to look like? Basically, it's, you know, I should invite you to the beta. But basically it's, you know, you have your balance. You effectively, like, fund your staking wallet.

You commit to staking for X period of time. And then you basically get like your share of the pool of what the rewards were. at the end of the period. And there's also a way to unbond, like, you know, for penalty and stuff. Okay. So, you know, just basically taking the entire balance on the exchange and then staking that or, but people explicitly opt into it. Yeah, you have to opt in.

Although it's possible that there could be, I guess, some, some coin, which has, like, basically no unbonding period or like no slashing risk or, you know, something like that where maybe it would make sense to just like automatically do it for people. But yeah, as it is now, you have to explicitly stake your coins. Well, one other thing that I would love to to kind of dive into a bit is so Cracken, right? You started this as a, you know, once upon a time and it was a tiny startup. And now it's become a large company, right? I think with around like, how large is Cracken now?

And just in terms of maybe users and number of employees. Yeah, the number of accounts is something like 4 million. The number of employees is just over 800. And so in scaling that company, what has been the most, you know, the most interesting lessons and the hardest things? Oh, there's been tons of, tons of tough things with growing a business. And, you know, this gets as the company grows,

it's just more and more just kind of like people-related issues that come up. as you get larger, you know, you just kind of like, I guess you also have these like effects of the network, which are bad in some ways, you know, just that like the bureaucracy grows, like the layers increase and more people need to give approvals on things or they're just more people having more interactions with other people who they don't really know. There's more opportunities for miscommunication. There's more opportunities for, you know, like HR complaints, just for things to fall through their cracks, I guess. You know, and it's, it's a very different dynamic, you know, than when you had an office with, like, five people in it, right? And, like, everyone knew what everyone was doing and everyone was kind of, like, a generalist. But I guess, you know, like, one of the tough things that I've noticed over time is just, you know, some of the guys that came in really early who, you know, not everyone grew at the pace of the company, right? So you have, like, some guys who maybe came in early, they were really good at doing something. but the needs of the company kind of outpaced their personal development. And you have to hire somebody like on top of them.

And that could be uncomfortable for people. You know, some people roll with it and are good. But yeah, not everyone deals with it very well. There are also people who just love working at like an early stage startup and have not, you know, felt like, okay, now the company is like 800 people. It just seems like things move more slowly. you know, it's not the kind of place they want to be anymore. So you deal with that too.

I mean, the things changing over time. I'd say like that's kind of difficult. We've tried to hold on to like the same culture through the whole time, you know, which is really focused around, you know, the experience of both the customer, you know, like our values are really keep the customer secure, give him excellent customer service. And also internally at the company, we want to basically treat our employees. is the same way. We want to keep them very secure and we want to give them basically like great service as as employees. So most of the guys in the company, I'd say are like ideologically driven by

the mission. And that's fantastic. You know, sometimes it's like a double-edged sword. We have definitely had people who've said, you know, like, I have tolerated us doing KYC on people, you know, for X years. But, you know, this new level of KYC, I just like can't handle. So, I've got to leave the company or I'm going to, you know, like become suicidal. So, you know, this is like, it's great to have people that are like so passionate like that. But, you know, at the end of the day, we've got to run a business and we just have to do things a certain way, you know, to survive and to continue to drive the mission forward. You know, like scaling. Fortunately, there are tons of great tools now for remote companies.

You know, G Suite has come a long way. Slack is great in some ways, some ways not so great. But, you know, these online collaboration tools are really, really good. I think it's really easy to run a company remotely now. If you're doing it kind of remote first, if you're thinking about the remote employees first, then I think it can be great, you know, like lots of people went from commuting for two hours a day to a commuting zero. And, you know, I think they're more productive this way.

you know, they also have more flexibility in what they do if they're taking care of kids or something like that. But yeah, I guess the company's changed a lot over time. You know, I end up dealing with like just kind of a lot of structural kind of related issues, you know, now that I didn't before, which are like interesting problems to solve, especially like in a remote environment. You know, I think we're solving kind of a lot of things for the first time. You know, there aren't many companies of this size who are as remote as we are. So there's sort of like interesting business problems to solve on top of all the crypto stuff. Yeah, that's, I mean, it's really impressive that you guys have managed to grow this large and maintain that remote aspect.

So I mean, epicenter is a remote company. We're less than 10 people. And I find sometimes a little bit difficult to manage. But yeah, like, I mean, the tools exist. All that sort of infrastructure stuff I think is there. And, you know, we were mentioning before the show, like, you know, kind of naming off some of the big startups out there that are also. I think like the infrastructure side is probably, you know, somewhat mature. But one of the things I think that's probably, that I'd like to ask you about is, you know,

how do you maintain culture in a fully distributed company where people maybe are not interacting physically as much where, you know, like culture is very much about people and connections between people. How do you guys manage to, you maintain the culture in this context? Yeah, good question. So, you know, our online chats are very open. You know, anyone at the company can contact me at any time. I'm constantly, like, chiming in on all sorts of topics.

And I'm pretty open dialogue with the whole company. We try to, you know, I personally try to talk to everyone in the company as if they're a peer. You know, I think that that kind of, like, vibe, like permeates throughout the company where everyone, we sort of just see it as kind of like an idea's first kind of thing and a meritocracy and that, you know, if anything is open for discussion, you know, if you have a good idea, put it out there and, you know, it'll be considered. And I think we've just got like a really good dynamic there.

We do a lot of retreats. So we'll have teams who will get together, you know, at least like twice a year to do, you know, just a in-person kind of meet-up, which could be a different place every time. You know, we've had guys going to Mexico to Bali to Thailand, you know, all over. They basically get to choose where they want to go. So it's kind of like a fun. It's not exactly a vacation because they usually end up doing a ton of work while they're all together. But it's a great, like, bonding experience.

And it gives people FaceTime and they're always coming back away from these things, like, you know, much closer. I think that this component of it is really key, this like physically getting together once in a while. Because when you're just online, you know, unless someone is really hyper with the emojis, it's just like kind of hard to know what someone's vibe is, you know, like, are they saying that in like a mean way? Like what was their tone when they said that? I don't, you know, I don't know. But like if you meet them, you kind of like get a feel for who they are. And then you start to like give them the benefit of the doubt, you know, that they're a cool person. and we we connected you know in person and there's no reason why they would be like being mean to me

so i would say like if you're running a remote company these definitely do like these retreats as much as you can at least you know if not at the whole company level altogether try to get the teams together to do this once in a while yeah yeah that's a great point i think i think we should do this more often too yeah i mean so with course one i said the other company i started to we do every three months have like religiously exactly on the three months cadence. It's also a remote team. I mean, it's much smaller. It's just seven people, but that we all get together in one place and work for one week.

And I think it's absolutely crucial. I think emojis are very underestimated as a means to convey, you know, true. It's a true sentiment in remote companies. We met actually for the first time here at SF Blockchain Week as we're recording this I'm still in San Francisco, flying out a little bit later today. But you were on stage with Charlie Srem and you guys did a live podcast recording, which was kind of cool. And I didn't catch all of it because I was like running around and seeing.

But I did catch one thing, which I thought was really interesting. And that was that you guys have an ideological purity test when interviewing certain candidates for certain positions. Absolutely. So tell us a bit about this. And how do you maintain sort of a fine balance between like, like people's intentions. And what's the test?

Yeah, what's the test? And then like, how do you, how do you maintain a balance between people's intentions and, you know, sort of like their political positions and how do you, you know, how do you navigate that and make sure it doesn't like cause problems within the company? Yeah. Well, I think if any, if anyone is a statist, they're not going to work out here. But, you know, we, this is like especially, a crucial component of the, um,

the customer service function. Everyone who goes through the customer service interview gets the ideological purity test. And we think it's very important for this role because these guys are on the front lines interfacing with clients all day, every day. And I think that they're not only representing Cracken, but I think they're representing crypto as well. and to the extent that they can talk to people who often come to us just very general questions, I think, you know, part of our mission is really sort of as missionaries to proselytize

crypto, you know, to preach the word of crypto and to get more people excited about it, to bring people into it, to give them a good experience with it. And, you know, I think if you just see yourself as, well, I'm just a customer service agent, I'm only here to answer questions about like why, you know, why the button's not working now or whatever, then, you know, you're really, you're not operating at kind of full potential. You know, I think there we missed opportunities there. So that's a big one for us. You know, we just, we want those guys to really, to really walk to talk. So how do you test for that?

So there's a bunch of questions we give people, you know, there's actually like a very, a very tough. just kind of general crypto trading knowledge test that people also get when they are applying for the customer service role. But the test is a bunch of questions about, and it kind of varies depending on who's interviewing, but it's about, you know, sort of like, what are your views on fiat currencies, what are your views on taxes, the state, how do you think Bitcoin is going to improve the world? Do you think the world would be a better place if, you know, we just had Bitcoin and no fiat currencies?

What do you think, you know, the appropriate amount of use of force by the government is what do you think about, you know, the endless wars that, you know, the U.S. is launching internationally? There's all sorts of questions kind of along these lines of sort of, in many ways, it's sort of like a test of your degree of like libertarian thinking. or your degree of understanding of Austrian economics and your sort of passion for crypto. I think like these libertarian ideas are,

they permeate through the crypto space, but they're much stronger, I think, in the U.S. context than, say, in European cultures. Yeah, for sure. Yeah, I mean, if you're interviewing someone from the Nordics, you know, for example, they might be fully happy with the tax that they're paying and all of the great social services that they receive. So you're not hiring Nordics is what you're saying.

No, actually, we have a few. You know, you can be totally fine with the system. You know, I think that it's just kind of like about your attitude for it and like understanding of it. And whether, you know, I do think that there are taxes that people can voluntarily opt into. You know, basically it's a service fee. You can look at it as a service fee. And if I were moving myself from California to a Norvik country, I would be seeing it that way, right? I'd say, okay, like, this is what my tax bill is going to be?

What are the services that I'm getting for this? You know, like, what's the trade, basically? What am I paying for? What am I getting? Yeah. I mean, there's a lot of other things that go in there, too. I think, like, this quality of life, you know, general sort of like infrastructure in the company. I mean, this is, I mean, being in the U.S. right now has been really interesting.

So I live in France. Brian is in Germany. I think in the crypto space, we're probably like the most like definitely in the podcast space, the most like EU maximalists that are like Europe centric. I wouldn't call myself like EU maximumists. Not not. Not EU maximus, you know, like sort of like adhering to the ideas of sort of like, you know, Europe and being in the US, because I don't travel here very much, has really sort of open my eyes to like a different perspective. And I'm not exactly sure that I'm fully on board with all of it. I mean, like, you know, in France, we pay a lot of taxes. But I'm like generally fine with paying those taxes because I know that like I can take the GGV and like be anywhere in the country in like three hours. The metro system in Paris is like phenomenal.

I've got like great health care if I lose my job. Like I'm basically good for two years. Like all these things, right? You know, talk to people here, you know, in the crypto space, especially in the U.S. and the general feeling is like, well, you're getting screwed in France because like you're paying 50% tax or something like this. I think like culturally it's it might be challenging to get everybody to align right on like on these kind of things. Yeah. I think, you know, what you're talking about in France is just the quality of the deal.

And I think most people in America feel like they're not getting what they're paying for. Like California doesn't have rail system that goes from San Francisco to Los Angeles. That's ridiculous. like all of the power lines are still above ground and, you know, constantly causing these wildfires. There's just like, you know, the infrastructure is deteriorating, like the state of public education is terrible. We see like trillions being spent on like offensive like military actions and stuff. It's just like, you know, where is the money going? Yeah, no, totally.

I think that's one of the things that stands out, right? Because in the end, the tax level is actually is about the same, right, in the U.S., at least when you get to. As in Europe, right? Because you can also get, let's say, if you're a place like California, especially. And then if you're a place like San Francisco, right, you have maybe the most wealthy place in human history in the world. And it's just the public infrastructure is so terrible. And it's the roads are broken. The airports run down.

Like everything is. And so, yeah, you definitely like, where does this money all go? Like it doesn't. So I there's an entire hour-long conversation at least just on this topic. I want to bring it back to Cracken real quick because, I mean, one of the things that I think stands out about Cracken compared to some of the other exchanges, it's been a little bit more conservative with regards to the tokens that it lists. You know, if you compare it to something like Binance, do you have any criteria for like how you guys go about thinking about the tokens you list and how is that evolved over time? So basically we keep like a short list at all times of the tokens that we're kind of interested in. And these tokens can be proposed by anyone in the company.

And we kind of run it through a formula basically of we look at stuff like what do we think the revenue is going to be from adding this coin. We look at kind of like second order stuff. Like if we don't list this coin, how many customers are we going to lose because we didn't list that coin? list that coin, right? Like, who's going to take their entire portfolio and move it to another exchange where they can trade everything they want to trade? What is the, you know, is there some sort of like good PR, good marketing around this? Is this coin? Maybe it's not a coin that is actually going to be heavily traded, but it's kind of like a darling of the community for some reason, or it's like maybe very interesting technically. Maybe it's something that like

the devs are really interested in working on. we look at obviously like the compliance implications of it you know is it do we think it's a security do we think it's somehow you know otherwise regulated or even like privacy coins in many places are not are not legal at the moment so we also look at like the technical lift is it a very early stage coin that's like making you know hard forks every two weeks it's going to be like have a high maintenance cost anything else you know potentially dangerous about it you know that we wouldn't want to deal with. And obviously, like, whether or not we think it's actually got some sort of, like,

longevity to it or whether it's a scam, you know, obviously we don't want to list anything that, you know, is just going to blow up, you know, in six months. We want to list projects that we think actually have some merit and have some longevity to them and are actually, like, working from a roadmap, developing stuff, actually, like, building something. Yeah, all of this goes into, you know, basically like a scoring system. And we have a committee of people that review the tokens and kind of look at all this stuff and come up with the ranking and goes into the dev queue. And lately we've been getting out about three a month on average.

We've got a bunch more in the pipeline. And there are a bunch of cool coins coming up in the future as well. They just haven't launched yet. So that's sort of how it works. Are there any instances where projects have paid you or can pay you to list or is that something you don't engage in at all? We don't do that at all, not even in like convoluted ways where, you know, they're promising us to do X volume or where they're, you know, paying us buying fee credits over over two years. You know, nothing like that. Basically, we take like no form of compensation whatsoever.

We feel like, you know, well, we could. and it's offered all the time. We don't want to put ourselves in, you know, a position of having a conflict of interest with our clients. We don't see our clients as the product, you know, that is to be sold to the highest bidder, you know, fleeced by whoever's willing to pay us the most. You know, we really want our clients to feel like we are kind of protecting them from, from a bunch of garbage that's out there.

We're not selling them out. We're making money off the trade fees. that's very transparent. You can see how much money we're collecting. That is the only way that we're collecting money. We're not selling data. We're not taking listing fees. We make money off of you in one way,

and that is the transaction fee on your trade. And I think by providing that sort of safe space and having a threshold for like the quality of tokens we're wanting to list, I think people feel more comfortable with us. They trust us. And I think in the long run, that's going to be very important. kind of overlaps a little bit with the way that I think we run this podcast, is we try to adhere to some degree of integrity with regards to the projects we

have on the show or that sponsor us. And so, yeah, I think that's a great approach. Yeah, and just I think I mentioned that before the show, but I want to mention here too is that, yeah, I've been, crackens definitely in my main exchange that I've used since, I think, over five years now. So, yeah, thanks. And I've been a great fan of it. Well, maybe a final topic here.

I would love to hear a little bit about sort of your vision for Cracken, you know, in the future. I mean, what do you see the company look like in three, five years down the line? Yeah, good question. I guess to some extent it's going to depend on how the regulatory situation plays out in places like the U.S. And I guess we might see some kind of like multinational collaboration on regulation, which could change things. Basically, we're expanding as a general financial services company. So, you know, along the lines of staking, hopefully we can launch other types of products that people are interested in. We can expose people more to defy. We can list more tokens. It'd be great to start

trading other types of assets like just direct Forex or even to give people a way to trade stocks, I think would be really cool. So we're working on all that kind of stuff. you know, hopefully the company continues to grow. I don't know if I mentioned, you know, we also own CryptoWatch, which is, you know, building all sorts of cool stuff with charts and, like, basically, like, allows you to hook up multiple exchanges and view your kind of consolidated portfolio and stuff, which is sort of, you know, we're hoping it kind of becomes like the Bloomberg terminal of crypto. So we're continuing to push that.

We're also building other tools. Like CryptoWatch actually also comes now with, like, a crypto finance Google Sheets thing. which basically lets you like pull tons of crypto data into Google sheets. We're working on the stuff just to make like, you know, tax reporting easier. Just getting the data where you want it easier. We've got the OTC business. We've got the index business, obviously futures. Maybe we'll get into options.

You know, there's infinite financial services out there, I guess, that we could launch. So I think more products, hopefully better products, hopefully more funding gateways, internationally. That's a big focus for us is connecting up to local funding services so that people don't have to send wire transfers from wherever they're at. Ideally, they have like a local funding option that they can use to fund their Cracken account. More internationalization. So like better translations, more translations. We've got a number of license applications in around the world. So I think we'll become more heavily liked. licensed to do more stuff.

All of these new lines of businesses that you've mentioned, like, for example, the ability to trade stocks and stuff, do you see this as a response to, you know, some of the other participants entering the market? Like, for example, I Toro has come into the crypto market, heavily, heavily funded. They're spending millions of dollars on marketing. How does Cracken continue to be competitive? and to be relevant in a space where massive, quote-unquote, traditional finance actors, although, you know, Ito is sort of a bit outside of that.

How does Crackton continue to be relevant in that context? Yeah. Itur has got such great ads. I think, you know, yeah, so it is in some ways, you know, a response to that. Although when we started the exchange, we thought anything could really happen in this space. You know, we built it from the beginning with the idea in mind. that, you know, it could be something terrible happens with crypto and we can't trade crypto anymore. So, you know, we also thought from the beginning, we think, you know, name coin was already there,

like ripple was already there. We thought, okay, there's going to be a bunch of these assets. We want to basically build kind of a general purpose system for trading anything. And so we've always had it in mind that we would trade stocks, we would trade Forex or other commodities. But yeah, more recently, I mean, you see guys like Robin Hood offering exposure to Bitcoin. It's not really trading Bitcoin. Like you can't withdraw it. You know, it's not like physical coin, but you get price exposure, which is I think what most people care about. Yeah, I think you'll, you'll start to see this sort of, I guess, like these businesses converging on sort

of the same feature set eventually or like very close. And, you know, for us, we kind of started with crypto and we're moving more towards now like doing other sorts of assets. It's going to be a necessity. I think people want to trade as much as they can in one place. And so I think to remain competitive giving them that selection of things to trade is important. I also think that people want to be diversified and not just in crypto. So you know, you might want to hold some Apple stock. alongside your Bitcoin.

So I think being able to offer that in one place is important to people. Also, you know, just for capital efficiency, if you have your stock and your crypto in one place, your sort of total account equity is more. You can get more margin. You can get more leverage or, you know, whatever. It's just, is it much more convenient to have it all in one place. So I think that's like inevitable.

I think you'll see many, many other exchanges in the space kind of move in that direction as well. Well, I think that one of the things that sets you apart and gives you a great advantage is, you know, your longevity in the space and also your ideological purity to some extent. And, you know, I say that's for you, but also sort of for the company and what you guys are building. So thank you so much for being on the podcast today. It was really terrific.

Great to meet you in person last week. And hopefully the next time we do this, we can also do this in person. That would be awesome. Yeah, thanks guys. Yeah, thanks so much. Thank you for joining us on this week's episode. We release new episodes every week. You can find and subscribe to the show on iTunes, Spotify, YouTube, SoundCloud,

or wherever you listen to podcasts. And if you have a Google Home or Alexa device, you can tell it to listen to the latest episode of the Epicenter podcast. Go to epicenter.tv slash subscribe for a full list of places where you can watch and listen. And while you're there, be sure to sign up for the newsletter. So you get new episodes in your inbox. as they're released. If you want to interact with us,

guests or other podcast listeners, you can follow us on Twitter. And please leave us a review on iTunes. It helps people find the show, and we're always happy to read them. So thanks so much, and we look forward to being back next week.