The Pomp Podcast - Frank Chaparro: Behind the Scenes of Crypto Media

Episode Date: September 24, 2018

Frank Chaparro is a Crypto-Journalist currently at The Block, a global community for Crypto enthusiasts. He previously covered the intersection of Crypto on Wall Street in Business Insider. In this conversation, Anthony Pompliano and Frank Chaparro cover the current state of Crypto Media, what it takes to develop sources, how you deal with sources who lie to you, what happened when the CFO of Goldman Sachs called Frank's article fake news, and who the most important people in companies in Crypto are.

The worst part about radio and podcasts is no one can tell how beautiful I look right now. That is true. That is very true. What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off The Chain, simply the best podcast in crypto. Let's kick this thing off. Frank Shaparo is a crypto journalist currently at The Block, a global community for crypto enthusiasts.

He previously covered the intersection of crypto and Wall Street at Business Insider. In this conversation, we cover the current state of crypto media, what it takes to develop sources, how you deal with sources who lie to you, what happened when the CFO of Goldman Sachs called Frank's article fake news, and who the most important people and companies in crypto are. I hope you enjoy this episode. Frankie Scoops is one of my favorites to interact with on Twitter, and this episode didn't disappoint. Anthony Pompliano is a partner at Morgan Creek Digital all opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management you should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy

but only as an expression of his opinion this podcast is for informational purposes only before we get started i wanted to tell you about our sponsor block estate a security token project in the 200 trillion dollar industry of real estate they've partnered with polymath and coinless comply api to create one of the first tokenized real estate funds and they have a unique buyback and burn model to learn more visit blockestate.com all right guys here we go we've got frankie scoops in the house today so let's uh let's just get this thing popping right off to start. Thank you for coming so much. Yeah, no worries. Pleasure to be here. We have gone back and forth on Twitter way too much. First time meeting in person. You've got

more energy in real life than on Twitter. So I'm excited about this. Big scoop energy. That's what they call me. All right. So let's go through your background. Most people don't know that how young you are and kind of how you got into the media side of crypto. Yeah, I am pretty young, which is surprising because of all of my mannerisms that would otherwise suggest that I'm like 67 years old. But it all started in college at WFUV. I got into radio, got into telling stories, got into the news. First in politics, so going down to City Hall, writing up stories on really pedantic City Hall type things that really started to bore me after a while. And I found a respite in writing about business news. And there's less

sort of vitriol in business news in a sense. And it's funny that I ended up finding my way to crypto because there's tons of vitriol in crypto. But the thing that I liked about business was it was a lot less bullcrap in a sense, a lot less fighting back and forth, a lot more building things and figuring out how we can build things that people want to buy. And so I ended up finding myself at NASDAQ as a marketing corporate communications intern. Really learned about capital markets for the first time, market formation, market structure, initial public offerings, the stock market, all those things that I really hadn't been exposed to in my studies because I was studying theology and sort of international political economy. And I fell

in love with the best part of my job when I was marketing at NASDAQ. It wasn't necessarily the job itself, but waking up in the morning, reading the Wall Street Journal, listening to Bloomberg Radio. And after that was done, I decided this is what I want to do. I want to tell stories that will make an impact on Wall Street and in the business world. And I had a great opportunity to intern at bi which started out basically they threw me uh you know they threw me into the wolf's den covering whatever i wanted talking to entrepreneurs um i think because of my sort of demeanor as a 60 year old trapped in a 23 year old body or a 23 year old trapped in a 60 year old body uh thank god this is podcast and not television because i have the face for the for

the former um and i really was able to build a name for myself and quickly after a couple months and especially after they brought me on full time i mean i was talking to people like the president of the new york stock exchange and the president rather the founder of iex and massively important folks on wall street and it wasn't until i came on full time that they sort of said all right we need someone to write about this bitcoin thing and i said bitcoin crypto i mean i want to be taken seriously as a financial journalist i don't want to write about magic internet money all day yep and their response basically was well you're going to be writing about magic internet money all day because um the thing's exploding this was right around may 2017 right after i'd graduated

from fordham and they needed uh someone to really uh pick up the coverage because the thing was exploding as far as impressions were concerned in terms of the editors asking questions you know i remember someone came to me um at business insider at the time and said what is ethereum we need someone to write about what ethereum is because the the google trend traffic is is off the charts and it was at the off the charts if you remember you know it's down now along with the price um and so really just dove into the thing um and and the rest is sort of history but it was really accidental in a sense being at the right place at the right time and it was over the course of the next i'd say six months as the thing exploded was finding a niche at the intersection

of of this crazy crypto world and wall street what are the people on wall street doing and at the time they really underplayed it so we're talking september october november right around the time when Jamie Dimon called this thing a fad right I was thinking all right but what are they doing with it and I thought the place that made the most sense to go to were the exchanges because when we think about blockchain technology and where it can have the biggest impact obviously on capital formation so the IPO process could be disrupted by something like an ICO or an security token offering, an STO. And obviously, trading can be impacting. You have things like decentralized exchanges that supplement matching, bringing together buyers and sellers. And so I

wanted to see if they were positioning themselves, places like NYSE, NASDAQ, CBOE, CME, how they were positioning themselves to take advantage and monetize this this revolution in a sense and at the time i mean no one really they didn't seem like they had an idea right we're looking at it we're thinking about it we look at all technologies but really i mean now we know a year later right they were all in and they were all in for a while right and so at the time when i when i was thinking about the impact that futures could have bitcoin futures on the market i went to all the analysts who cover the exchanges so you know the the investment banker the investment bankers who are writing up stock report analysts for their you know asset management clients to see how they can

uh you know the ones that set the price targets right for your listeners who might not understand what what investment bankers some of them do and i went to them and said listen what do you think the revenue opportunity is here bank of america put out a report at the time this was around november october um that said that one bitcoin futures could help dampen volatility which kind of didn't really happen if you think about it but also there was a 10 revenue something for exchanges so i went to uh other folks covering the stock and they had not only did they really not understand what bitcoin was but they hung up the phone on me they said this is ridiculous The exchanges aren't going to do anything in this space. I don't see what the opportunity is here. How off they were. Here we are now with back with backed with with Nasdaq potentially looking to do something with cryptocurrency exchanges.

They're supplying market surveillance technology to, I think, at this point, five cryptocurrency firms. And so it really is a horse of a different color. And to really bring the point home of how much it's changed since I first started covering it, I remember asking a year ago a very high up executive at one of the exchanges, how big of an opportunity is this? And basically, he echoed the same thing that Jamie Dimon said. It's a fad. It's dangerous. Here we are now.

Here we know that they're all in. They're all in. Yeah. So, OK, so let's talk about, you know, the state of the media in crypto, right? So I kind of bucketed in a couple of different categories. So you've got kind of legacy media, which is CNBC, Bloomberg, you know, mainstream media, et cetera. Then you've got what I would consider crypto specific media, which is the, you know, coin

desks the um you know ccn's coin telegraph etc and then you have this like citizen journal uh journalists right which are like all the people on twitter reddit medium etc that are basically reporting the ground truth how do you see those three interacting and like what is the state of each one of them well i think it's interesting because as far as legacy media is concerned i think there are so many topics that journalists have to cover that it really just does become about the price and how traditional institutions are viewing this space right and it's all sort of in that lens which underserves a lot of the folks who have been in it for a really long time since you know 2008 since the beginning or maybe since 2012 and so that in and of itself you know

up until I'd say a year ago where you have some really fine journalists at places like Bloomberg and Business Insider and the New York Times, up until a year ago, most of the stories either had to do with price or the culture of these cyber punks, et cetera. That's changed. And I think we've seen a lot of legacy media really dive into this and pick apart issues ranging from technology, trading, and others. But that gap from the beginning, where a lot of this was sort of viewed as a fly by night sort of thing allowed for a lot of these medium type folks to come up a lot of vloggers a lot of podcasters a lot of writers um who are also trading this stuff and and investing in this stuff um to fill a gap and really get granular on the technology side

um and i think now you have all you have those types of folks along with traditional media but at the same time and this is a recent phenomenon too a cambrian explosion if you will of crypto media publications that to be honest and to be frank no pun intended the pun was very much intended there are a lot of these crypto publications that don't know how journalism works they don't know how sourcing works and there's a lot that i think you know i'm very skeptical of who these crypto first publications outside of coin desk i mean they have great folks working on great stories but outside of that i'm very skeptical of where they're getting their information of uh from and and the due diligence they're doing um to really make sure the information

they have is precise and well sourced you know so let's talk about this though right uh a bunch of us on twitter have lovingly started calling you frankie scoops right yes because you continue to publish scoop after scoop after scoop as my ego grows and grows and grows uh but but let's walk through like the anatomy of a scoop right how do you should we go through one that you help me with that's probably not for the best uh so let's talk through like how you find sources right how do you actually um develop that source learn to trust them get information from them and eventually publish something well that was the best thing right about the intersection that i was at no one in well i don't want to say no one because that's a blanket statement but very few journalists

i think we're actually looking at well let's talk to the market structure crypto expert at this wall street firm as opposed to you know the crypto first firms like you know uh block blockchain um or you know a circle or a or a coin base i thought let me go to the chicago-based market making firms uh new york stock exchange let me find their bitcoin guys their crypto guys because no one's probably really talking to them because the attention is all on the crypto side uh the crypto first side of things and so that's really your approach was let me go to the established legacy players, the Wall Street type institutions. And if I start there, it's kind of a trickle down from, you know, the well-established, well-known players all the way down to the individual

startups. And that's exactly what happened. So I started with like, you know, let's say the head of digital assets at X Wall Street firm, and they were able to connect me and grow my base with actually the crypto first guy. So I started at Wall Street and then exactly as you sort of described branch my way branch myself out um to those other folks and so it's all about i mean the question is you know how do you build trust how do you make sure folks know that you're not going to burn them and that you're not going to i mean it's very easy right you know to talk to a journalist in one sense um but but it's a scary thing you know you don't want to lose your job and you just need to make sure that you know i need to make sure that the person i'm talking to

knows that they can trust me and then i'm not gonna one tell them tell people things that they tell me off the record or on on deep background i'm not going to associate it with them um and it's about relationships and friendships and getting to know them on a personal level going out for a cup of coffee or a or a drink of some sort and really forming a a um a relationship of shared information. I know things about the industry, have some insights, some might call them insights, that can help them at their job. So is this like, let's say you call up head of digital at a bank or wherever, first call, you're asking questions that you want answers to that you can then use as information for a story? Or is it more of, hey, call them up. I want to get to know

you. I think that we can build this long lasting relationship. Yeah, you don't want to just call them and be like, Hey, listen, I know you're building this thing. You got to tell me everything you know about it. That's going to scare them. Right. You know, you kind of want to grease the wheels, the old foot in the door phenomenon, you know, how the wife and kids, I mean, I'm being tongue in cheek, but it's serious. That's part of, that's part of the process. And, and so a lot of the time I hear something from someone like Anthony Pompliano, such and such as building is being built at x company and i think that's interesting i can't just go write the story right because anthony might not know what the hell he's talking about you're gonna you're gonna

make me lose all of my friends over yeah right right now see this is this is this is fake news anthony's anthony's not that helpful don't worry um but hold on so when you call these people though because this is an important part right so you call them and you get information sure how do you know that the information is true and do you have to go get it from multiple people to confirm it? Or how does that process work? So the first thing I think about when I go into any call, right, is why would they tell me this? And how do they potentially benefit from telling me this? Yep. So I'll give you an example. And this is, I think I can give this example. So when I broke that CBOE was really getting close to, or at least telling its market making clients

that it was getting close to launching Ether futures. Yep. I mean, I knew this was something that would move the price. And so the first market maker who told me, right, I'm thinking, huh well they want to tell me this maybe they have amassed a large position in ethereum and they would benefit from such a story and so i think a lot of people in the crypto world don't think that really good journalists think about these questions they just want to get the story out but this is something that's really really important to me and so yes so just because such and such market maker told me that this was something that they had told him or her uh i didn't go off of just that one source and uh because of those questions that you have to think

about and so i went to another one got the same exact story all the details need to line up because imprecision even if it's a sentence can radically change a story and radically can impact uh someone's money and you know no one gets a story right all the time uh i reported it was a really gangbuster report on fidelity and their crypto efforts and everyone knows that abigail johnson's really big into crypto i had first reported they were hiring uh from internal and this is this is you know when folks send me stuff from inside the company it makes the story process so easier because it's just you look at the documents you read it and you write it up and so it's like you have you've got paper evidence yeah paper evidence that makes it great because

you know i don't have to i can't point to my nameless source i can just point to what i have in my hand and so the the job ads basically said we're hiring for crypto custody uh and and uh for a for projects related to digital asset exchange yep so i followed up that report because obviously people when you put something out like that they want to talk to you or they want to give you more information to the story and so i found out basically that um they had a vc prop fund under a British subsidiary, um, from which a number of folks, or that was created by a number of folks at the firm who had left. And I'm sure a lot of your listeners who know who these folks are at Castle Island Ventures. And so basically from, I think I talked to at least five or six people

for this story. I mean, I really wanted to make sure I was getting it right because this isn't something that Fidelity wants to talk about. And companies typically don't want to talk about things and companies typically only want to tell you what they want to talk about which is the hardest part of the job and so the the mistake i made right was that i had reported that the fund had shut which was the language that was used by all my sources now fidelity calls me the next day and basically says the fund is inactive now it kind of sounds like the same thing right yep but it's that sort of precision that as a journalist um you know you don't always get it but you want to get it every single time because the difference there is shut means is inactive in perpetuity

right it's over sure and inactive could mean we have money still sitting here we're not currently deploying it but we may restart at some point exactly which is an important distinction and you know as a journalist you know you're not always going to get it 100 right but those are the questions and those are the those are the details very specific details that you always want to go after and so a long way of answering your question but tying back to crypto first media a lot of the coin desk wannabes of the world are not i think precisely tackling stories in that way where they're thinking about um how they may be approaching it in a way that doesn't get um at those tiny details that at the end of the day seem super tiny but make a huge

difference on the impact so let me ask this question um does anyone ever lie to you like like tell me like the horror story right uh you're you've got a source you've built some trust with them they say hey frank you know i've got this awesome piece of information and they lie honestly that typically doesn't happen so it's not the folks that i've had established really great relationships with who will lie to me maybe they're they're just confused you know maybe typically and that's why you go to other people it's something like you know they heard something from a company but it's they heard it a little bit off most of the time it's the companies themselves that will literally lie to my face or you know try to spin me in one

direction or the other and so one time i was reporting you know mike dudas i want to i want I want a good story. I want a good story. This is a good story. So Mike calls me the LinkedIn assassin because I'm always reporting on folks from the crypto world going to Wall Street, or rather the other way around, people from Wall Street going to crypto. I think I reported on five at least from New York Stock Exchange going to Coinbase, which the assault just continues. but um so there was one hire from a a traditional wall street firm a really senior guy was going to a really well-known cryptocurrency uh company okay and so i had recruiters are the best sources by

the way because they know where people are going and they know for a fact um that that these things are happening uh and so a really well-known uh excuse me so a recruiter told me about a very well-known guy making this move and so i knew without a doubt but went to the company and basically they said this isn't true which puts me in a tough position because i have to think all right i only have this this one guy who without a doubt knows but they're basically telling me this hasn't happened and on this one i didn't go with my gut i wrote the story but just set it aside and said i'll wait and a couple i think it was four or five weeks later so wait so you wrote the story but didn't publish it and you like put it in the drawer for later yeah

because i was only like 95 certain and if there's that five percent uncertainty that's sitting like in my in my gut right and so basically i i went to the company i said this guy's coming on as exposition is what my source tells me and they said well well i mean we've talked to him we've talked to a lot of people you know the classic of course then uh yeah but he's not he's not hired right now. So I was like, are you going to hire him? Uh, well, no, we may not. We talked to a lot of people. And so that level of sort of doubt, uh, was enough to make me, uh, hold off for a little bit. Um, so they end up, someone at the company ended up calling me, uh, four or five weeks later saying, Frank, that thing you were looking into four weeks ago, it was happening.

And so, I mean, that's what confused me with when we put out that story on Goldman's ambitions and everyone on crypto Twitter sort of coming after me and saying, oh, well, the CFO said what Frank wrote. Yeah, we got to back up and set this. So you wrote a story that said Goldman is, I believe your story said Goldman is going to shut down or is not going to launch the crypto trading desk that they had previously said they were going to do. So that was what a lot of folks... Is that the takeaway people had? That's the takeaway people had. But the story itself was a little more detailed. And it was that custody has moved up the line.

And the trading of... As a priority inside the bank. As a priority inside the bank. And the trading of physical Bitcoin has sort of moved down the list. But they're trading, obviously, a ton of different derivatives tied to crypto. And they're trading futures, obviously. And so I think a lot of people interpreted the story as them completely scrapping all trading of all types of crypto related assets, which obviously we did not report because that's not true. But I think a lot of people interpreted that as being the case.

And so the CFO basically of Goldman said that our report or he alluded to the report. Actually, he didn't really. He basically said that this sentiment is fake news. And a lot of people took that as meaning that my report or Business Insider's report was fake news. So you wrote this report. Everyone goes wild on Twitter, you know, mainstream media. People start trying to correlate the story with the price movement, which is ridiculous. And so CNBC, for instance, they reported that Bitcoin tanks $500 a coin after Business Insider report about Goldman's crypto strategy.

when bitcoin tanked an hour and a half before any of you know before our report went out and so this just speaks to the the degree of misinformation and i think when mike was on he he spoke to a lot of these issues and that's part of the reason why i'm joining the block is to create and help create a center a hub for people to go to where they can get out of this like ridiculous um misinformation chaos absolutely uh to actually find some sound reasoned uh news and information but what is it like when you write a story and somehow gets convoluted into this thing and then the cfo of goldman has to respond and he says it's fake news like what do you do do people start calling you saying like congratulations hey you screwed up like like what is that response

from people? And what do you do? Yeah. I mean, what did I do? I mean, I tweeted about it and I said, well, this is exactly, um, I was disappointed in the response because it, he obviously didn't read the original story or he didn't frame his comments in a way that said, Hey, it's not just this one report. It's the sentiment out of it. So he wasn't necessarily precise, but you know, i made the case clear listen you know this is what our report said and actually marty said after the fake news comment he said oh you know maybe uh trading of actual digital assets has moved down the list and custody has become more important our strategy might have changed which is exactly what the story said got it um and so everything in this world as you know uh emotions fly high

and they and they come down in like a week or not even a week a couple days before we move on i want to tell you about our sponsor block estate a new security token project in the 200 trillion dollar real estate market they've partnered with polymath and coinless comply api to create one of the world's first tokenized real estate funds tokenization is the process of creating a digital token that represents ownership in a real world asset you've heard me say it before but a clear use case for this is real estate block estate aims to bring increased liquidity to this massive market. We're really, really thankful to the Block Estate team

for their support. So we'd appreciate if you checked out their website at blockestate.com to learn more. If you're intrigued by what they're doing, feel free to reach out to them or give them a tweet on Twitter. Thanks so much. Crypto is the greatest human psychological experiment

I think that we'll probably see in our lifetime because not only is it all happening in relatively real time, there's prices attached to it and it's very, very well documented. in terms of everything that's being created online and that's what makes it so fun to cover and and part of the reason why i love writing about the space originally what what really attracted me to it wasn't necessarily this any sort of political underpinning you know there's

a lot of libertarians in this space it wasn't a technology underpinning there's a lot of really smart computer scientists in this space who love the idea of of putting a monetary system in place that's coded impenetrable etc i mean it's insanely groundbreaking computer science um that didn't attract me either it was really the passion and energy and liveliness um and getting to tell stories for those types of people that are unbridledly insane it's epic yeah it's really is yeah so all right so let's go back to uh somebody tells you some sort of information for a story right they're a source and they provide you this information and it ends up being wrong whether it was malicious or not what do you do after that

story is either published or you get you know kind of confirmation that it was incorrect do you go back and say to them hey you told me something that was wrong do you just drop it do you burn them like what is the the the response to that i don't know if i've ever have written a story that's been dramatically incorrect to the point of having to go back to someone and take him down. Like, what's going on? Yeah, no, it's typically before the story will go live

where someone might tell me something that's inaccurate. But again, you know, I've never had a source really tell me something that was inaccurate. I have people sort of dance around the truth. You know, but that's just part of the job. That's part of the excitement, you know, and makes my job fun. You know, it starts with someone telling me something and having to find connect the different dots together. And it's typically in that process of connecting the dots that you find people being inaccurate or untruthful.

And all of that typically shakes out before any stories is up. For sure. You know. So let's talk about a couple of things that are happening in crypto, because I think you have a really interesting perspective in that you get to talk to all kinds of random people, right? Everything from traders to people at legacy firms to crypto natives, kind of the whole gamut. Let's talk about the ETF, right? So ETF has gotten a ton of attention and seems like price goes up, goes down based around these applications, you know, denials, potential approvals. What's your take on, you know, does the ETF actually matter?

And if so, what would the impact be if and when it gets approved? I have come to the conclusion that I think the ETF matters for the space, but it doesn't matter for the price. I think it doesn't matter at all for the price. I thought it did. I thought it could have a big impact. But going back a little bit to the run up we saw in December after futures launched, I think a lot of that was driven by this idea that we'd have an ETF in a couple months. Literally, people thought that, all right, we've been moving at a breakneck pace and it's going to continue unabated. And, you know, here we are months and months later with no ETF in sight, probably won't get one in 2018, maybe not even the first half of 2019.

There's a lot of work to be done in getting that off the ground, which we can talk about, but it's not going to happen. Now, I don't think that's as important, though, because when you look at the crypto ecosystem as a whole and you think about how much work we have to do on the actual digital assets themselves on scaling, on getting a DAP on Ethereum or an EOS that is actually used by people, not just 9000 active users a month, which I think is the DAP usage or maybe it's a day on Ethereum. we need something that's actually scalable actually as use cases not just for nerds like us but for grandma and grandpa in iowa that they can understand i was at token fest this past weekend and there was a really cool company on one of my panels and they're sort of trying to position themselves as a decentralized rival to google and you know it's a bit tangential but basically i asked them all right why would my grandma care why would my grandma want to stop using google to use this thing so she can get tokens like that doesn't make sense to normal

people and we need to or those companies rather need to make sense of their projects to regular people and so that's the impediment we need to get over a a use case for crypto that makes sense to the masses not an etf and so i think if we got an etf tomorrow maybe the price would rally a bit But I think that's all going to go down because you're going to think, all right, now regular investors have access to this market. But it's the same thing as if, you know, you have an amusement park. This is a really stupid analogy. People tell me I'm really bad at metaphors, but I think this is a good one. It's like having an amusement park with some cool rides that are like different than other amusement parks, but they're not really there yet.

Right. And so you have the ticket guy and they're all just normal ticket booths. You have to go to the amusement park to get your ticket. And so an ETF equivalent for this amusement park is, all right, now you can buy your tickets online. All right, but if you can buy your tickets online and there's not that many cool rides that excite you, you're not going to go to the amusement park. Likewise, if you have an ETF, but there's nothing that you think is that great about crypto or you don't understand it, right? If there's still that educational barrier, you're still not going to invest in the ETF. Yeah, it's changing the mechanism or pathway to owning the asset. that it's not actually changing the asset itself or making it more valuable.

Exactly. And it's not making it more understandable to regular people. You know, there are a lot of people out there that are making really great, that are doing a really great job laying out how Bitcoin could be the digital gold or a rival financial structure and other cryptocurrencies and digital assets that can also make major moves into chipping into existing businesses, whether it's data storage or search um but that yet has yet that has yet to be sort of deployed and truly tested i think until we see that i don't think an etf will make a difference and

it's also ironic i think that that we're waiting so much for wall street to release complex derivative products and and and other things as opposed to waiting with bated breath for what what what's going on inside ethereum and what's going on inside a lot of these projects that's where i think we should focus our attention um ironically although i love watching the developments come out of wall street and this is something that i've sort of been tackling with the past couple weeks i think it's less important but it is really it is important but it's less important um an etf is important for the for the ecosystem but i think it's less important um so okay so let's go from wall street versus like crypto adoption to uh the regulatory environment right

so there's all these like lobbying groups working groups that are popping up that are either led by wall street you know executives uh or crypto native companies individuals that are trying to bridge the gap of understanding education for regulators and lawmakers right are these things good? Are they just doomed to fail? How do you see the working groups and the lobbying groups actually having an impact with the regulations and the regulators themselves? So Mike Novogratz had something really interesting to say about regulators' impression of this space, And I think it's really smart and true. And it's that this market for so long was so retail driven up until the end of last year. And while there were folks at Wall Street firms looking at it, a lot of it wasn't public. Right.

And so there was no you know, back in the housing crisis, regulators could go to their guy at Morgan or Goldman and say, what's going on on here with these mortgage backed securities? and you didn't really have that with crypto because it was so retail driven and so now they're playing catch-up they're trying to figure this space out they're giving it a chance though they're not completely um sending it off to other countries as far as regulatory arbitrage is concerned yep they want to see development but there's a lot of unanswered questions especially around the etf how can we make sure that these markets aren't being manipulated and when so much of the action is in is in asian countries so much of the volume and turnover is in asia and you don't have market data sharing agreements between exchanges you don't have a finra equivalent

you don't have um you don't have a guarantee right that that these markets are operating um along they're just in a standardized safe way exactly we don't know what we don't yeah we don't know what best execution is we don't know how we don't have those market safeguards that we have in equities but to be fair right equity markets had 250 years to develop so it is kind of like comparing apples and and as um lynn martin at ice uh said to me in an interview once comparing apples and neon fluorescent signs which is true um and we'll get them to be apples and apples probably one day um but but there's a lot of questions that the regulators have thrown to the crypto world and they're not being answered so on market uh manipulation if we can get the

exchanges to sort of cooperate and collaborate to create an sro which the winklevoss is uh gemini's gemini exchange has has sort of tried to spearhead with their um um their working group that they've created but you know you have coin coinbase creating their own with circle and uh genesis yep right and i'm just here thinking why are we getting them all together it's it's just too much of a in from my perspective it seems like the winklevoss uh gemini exchange wanted to get something that that could help you know because the regulators wanted an sro type thing and so here they are they go all right we'll create this thing uh to help get their etf on the ground and coinbase probably sees and goes well we're not going to join you know we're not going to follow

Gemini's lead. We got to create our own thing. And it's just troubling to me because we should all just be working together, right? We should all be trying to get to that common goal and purpose, which is sound markets, creating the standards for those sound markets and educating market participants and non-market participants alike on why this is a valuable space that you should put one to five percent of your assets in absolutely so as this happens right we need technologists obviously to build technology standards etc and one thing that i think you and i agree a lot on is like there's a full-on assault by technologists on wall street and financial markets right you know the the wall street legacy organizations institutions for a

long time have dominated that world and they do things in a very specific way technologists happen to think a little bit differently, build things a little differently, and kind of have a different set of ethos and perspective. And we're seeing this clash, right? And it's really the technologists attacking the financial markets and the Wall Street institutions. How do you see that from your perspective, right? As you talk to a lot of these Wall Street institutions, like what's their take on this? What I think is really interesting, if you want to look at something that can prove or can support a bullish thesis on crypto right now price obviously is out of the argument um um scaling doesn't look as great and there's a lot of issues but if you want something that

looks good look at the talent assault look at how many folks from traditional wall street i can list them off have either dived into crypto themselves or have been taken um from a wall Wall Street firm to the crypto world. You had a guy like Jamie Selway, who left ITG to be head of institutional development or sales, I'm not sure what the precise title is, to go over to blockchain. You have a person like Christine Sandler leaving New York Stock Exchange to go to Coinbase. Eric Shrove from New York Stock Exchange went to Coinbase. Hunter Murgart went from, I think he was a sales trader at Barclays. He'll probably listen to this and tell me if I'm wrong, went to Coinbase. You had a guy like, I first reported, a 25-year veteran trader who last was at Credit

Suisse going to Kraken for their OTC desk. I mean, the assault is unreal. And so you have to think, I mean, they're probably making great salaries, right? But there is this sweep that proves, I think that there is a vision that they see and there is efficiencies that can be driven by this technology and potentially maybe even a revolution. Yeah. I mean, look, forget all the money for a second, right? I really do think that a lot of these people are leaving because they're going to something that's more exciting, more powerful, and it's a global phenomenon, right?

And so the whole idea of like the virus is spreading really has become this thing of where the idea of what Bitcoin, digital assets, decentralized finance, et cetera, has spread and captured the mental energy, right? And it's a thing where once people get exposed to it and they understand it, they can't stop thinking about it. They can't stop trying to figure out how to solve some of these problems. Do we get inside of an institution that's a legacy, you know, Wall Street place, just isn't going to cut it for a lot of them.

And so they've got to go find somewhere else. That's what they're doing. Totally. But at the same time, I mean, you see a company like ICE launch back and I'll tell you, folks inside Coinbase tell me that they think that's, you know, across the crypto exchanges, they're not chasing the competition in that respect, but they do see a serious competitor in fact. And that's because, you know, the trading market structure element of this is so integral to building a sound market, whether it's, you know, crypto or otherwise. And so

long story short, you see tons of institutional firms looking at how they could break in, whether it's Goldman on custody, Numera on custody, ICE obviously on custody and potentially trading. And that's the story across the street. Absolutely. That makes complete sense. All right, let's do some rapid fire questions here. And then I'll ask you one non-crypto question

that I've been thinking about a lot. And I'll let you ask me one question to wrap it up. What's the most controversial thing that you believe in crypto? So the thing that you believe that the most amount of people, when they hear it, will disagree with you. i guess probably the etf thing i don't think we should be worrying about that as much as we do

maybe that's not controversial but i'm sure someone might say that there's a good amount of people that disagree with you everybody like is obsessed with this etf you're not i'm not obsessed with it all right be cool when it happens abe will probably argue otherwise he's all in on it um okay so uh what is the most important or interesting company in crypto that people might not be talking about that people might not be talking about uh i reported on a fundraise out of chicago a company called ccx and this this company is an institutional platform for for spot and derivatives and they have hedge funds knocking on the door and so what's interesting about them one they raised 15 million in a bear market which speaks to a whole nother conversation about

how you know the public markets for crypto whether it's icos or otherwise really really bad but companies are still raising millions of dollars. Anyway, what's interesting about them is the majority of the firms, or no, sorry, not the majority, but a large percentage of the firms that are knocking on their door from the institutional side have never traded crypto before, which is really insane. And so clearly they've got something going on there,

CFTC regulated platform, that I think is really interesting. And they have a suite of heavyweight ex-Wall Streeters, a guy named sam teagle who i first reported left jump trading um that he was recently brought on and um they got a really cool guy um running the show who's like 25 super smart and so it's a company pay attention to all in all right man we're gonna take your word for that one uh you've got a magic wand and you can wave it and change one regulation what do you change one regulation that's i think i i mean we're probably on the same boat as this i think the whole thing around um the fact you have to have 250 000 accreditation laws i would i would bring down a little bit i

wouldn't eliminate them i don't think but i think especially someone who's who's younger and and has some extra cash there's no reason why a computer scientist at harvard who may not have 250 000 net worth shouldn't at least take five grand and invest it in a venture capital project he thinks is interesting. I think that's absurd. Yeah. I mean, look, and it's not so much eliminating accreditation laws. It's just switching what the criteria is. So today we have wealth as a signal for intelligence, which is ridiculous. And I've gone on and on about this. I don't need to touch on it anymore. But if we can go from a wealth criteria to a knowledge criteria, I actually not only think that one, it is more inclusive of the general population,

but two is actually probably makes it less risky and a more sound market because everyone is more intelligent. There's tons of people with 250,000 now where they were stupid. Absolutely. Name like five for sure. All right. So, uh, this is the first time I'm asking somebody a non-crypto question, but something that I've been thinking a lot about and I just knowing you, you will have a great answer for this. So, uh, lots and lots of people are interested around aliens, right? And, uh, let's, let's go ahead and just, uh, we'll say that, yes, there is some sort of living, organisms outside of earth. So there's aliens somewhere. Do aliens have pets? So are there alien animals or are there just alien humans? It reminds me of that South Park episode where

earth is like a show where they put a bunch of different species on one planet and like, you know, we're all like going after each other, starting wars, eating each other. Jokes on us. So maybe we're, maybe we're the pets. You think we're the pets? Maybe we're the pets. All right. I love that answer. The way that this came up was we were talking about aliens one day and I said, you know, we always talk about aliens like as human equivalents, right? They're going to show up and we can talk to them, hang out with them. They might attack us, whatever. I said, well, what about all the animals, right? And what has that played? Do they have animals? Yeah. I don't know, but maybe we are the pets or the animals. Or the show. Yeah. Well, we're definitely

a show. I don't know who's watching, but we're definitely the show. Um, all right. So, uh, let every guest ask me one question. What, uh, what question do you have for me? That's a great question. What question do I have? What, um, what company do you, I'd like to know what company you think is the most exciting right now? Ooh, what company do I think is the most exciting? Uh, I'm going to break from the question. Morgan Creek. Yeah. Take Morgan Creek out of it. I'm actually not going to go with a company. I'm going to say that it is a, it's Bitcoin, right? And the reason being uh i think that people uh are bored by bitcoin and i was making the argument to a friend the other day uh bitcoin as an investment opportunity bitcoin as an economic you know

development bitcoin as a kind of you know a threat to uh sovereign backed uh currencies etc it's too boring right it's kind of come and gone in terms of the excitement of bitcoin and so now we see everyone going into everything from all of the kind of derivative trading to you know what wall street wants to do to enterprise blockchains utility tokens i see there's also other like fun sexy stuff going on but if you go back to bitcoin i still think it's the most interesting most important development in the space and if it is successful right so it is a complete binary bet in the sense of like a true venture capital bet if it works it is going to be insanely valuable even from here if it doesn't work it's going to zero right and so that binary aspect of it

scares a lot of people, right? But if it does work, it is probably the greatest technological development of the last, I don't know, 500 plus years, right? And the reason why I think that it's so important is because it is so simple, right? There's almost beauty in the simplicity of Bitcoin and what it is, what it is trying to accomplish. All of the intellectual Olympics that happen on twitter and these other mediums they kind of just skip over it right because it's like oh yeah bitcoin's a thing it was one of the first you know applications and so like let's go talk about everything else that you know we're going to try to figure out well if you go back to that and you really sit and think about out of every single thing in crypto what has the potential

highest impact in a whole different different ways you cut it bitcoin's still probably the most interesting most important thing we just don't spend as much time thinking about that because of all the other sexy, cool things to talk about. And that's why we're here. Literally why we're here. Man, listen, this was so much fun. I really appreciate you coming on. It was a pleasure.

And doing it on short notice and stuff. So we'll have to do it again. Definitely. Thanks so much. All right. Thank you. Thanks again to our sponsor, Block Estate. To check out their tokenized real estate fund, you can check out www.blockestate.com. Hey, everyone.

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