FTX.US President on Bitcoin, Altcoins, Crypto Regulations
Welcome to the show brett good to see you. Yes, all right! Well, taking a look at bitcoin, people did notice large sums of bitcoin moving on ftx us uh the other day, and there were a lot of questions about what that was all about sure. So the great thing about bitcoin, obviously, is that people can track all the transactions that are happening on the blockchain. Of course, that comes with the peril of people seeing whats going on and making assumptions about what the activity is. So, in this case, they saw a large amount of bitcoin be moved out of an ftx wallet, and that was just a standard reconsolidation of wallets that happens on ftx periodically to improve performance. There are these things called utxos or unspent transaction outputs, resulting from lots of small and large deposits that occur within ftx and occasionally to improve performance. Well, do a consolidation of all those while amounts together and thats what people saw, and there was some you know very unsubstantiated, rumors about hacking. None of that occurred well speaking of uh cryptocurrencies moving, we are seeing the solana network down. Is that impacting any trading going on in ftx? So it does impact? You know the ability to do blockchain transactions, for example, withdrawals deposits for seoul right now, while theyre having issues, but it doesnt actually impact the trading of the solana order book on ftx or ftx. Us, okay, and why is that? Because, within once you know, coins are on the exchange itself? All the on exchange operations are happening on the centralized platform, theyre, not blockchain transactions.
Right also, we saw a boost in litecoin the other day as well as bitcoin, because of this fake walmart news release. You know when things like that happen in traditional markets, there may be some circuit breaker or obviously we dont have that in the crypto markets. But i im just wondering your thoughts on that yeah, its tough. You know when you have a market like the cryptocurrency markets, which are definitely in the maturing phase. Theyre, not you know as well developed as the equity markets are youre going to see things like this happen and theyre unfortunate, these sort of fake news stories that cause you know, manipulation and prices, and you know we do hope that over time, theres more, you know Regulatory clarity for the exchanges to help enforce certain kinds of rules that would prevent these kinds of things, but also have the ability, for you know, enforcement action to be taken against perpetrators of things like fake news that are causing these kinds of price movements right. So gary ginzer making some remarks before the senate banking committee today saying that its in all likelihood, trading platforms and crypto are trading securities and should register with that. This is something you agree with. What i do agree with is that there should be regulation on the federal level for spock cryptocurrency exchanges, um exactly where that jurisdiction is going to lie between the sec and the cfdc were going to see. You know i read genslers comments this morning and it did seem like the chairman was willing to discuss the possibility of the cftc and the sec working together in some sort of joint jurisdiction capacity to figure out.
You know how do you regulate a spot, cryptocurrency exchange where some tokens might be securities? Some tokens might be considered more like commodities under the cftc regime. Its going to be interesting to see but im were looking forward to a lot of the regulatory clarity were hoping for coming out of the sec and chairman genzler and the cftc and chairman venom and is ftx in conversations with the sec or the treasury department about Regulation going forward in the sector were absolutely in conversation with the cftc and the sec talking with the staff in constant dialogue, both about you know our current exchange and also our future plans, and we think that is the only law way for long term exchange like Ours to really exist is for us to work cooperatively with them and collaboratively with them to figure out the next steps, any insight into what those conversations are like whether or not you know your positions on how the industry should move forward. The the main insight ill give is that i think that its a misconception that either agency wants to stifle innovation. I think they recognize. This is an important technology. Its here to stay. The asset class is a multi trillion dollar asset class. Its here to stay. They want it to exist, but they want it to be fair and orderly and they want it to be regulated, and we support that. And what can you say about your partnership or your rather, your acquisition of ledger x sure so we um recently announced that we are acquiring ledger x.
Ledger x is a cfdc, regulated futures exchange, derivatives exchange and clearinghouse, and so the goal here is that we would love to be able to offer derivatives through the ftx us platform to us, customers, both institutions and retail, and through the licenses, the dcm, cef and dcl License is offered by ledger x, in collaboration with them were going to be able to eventually and again all pending discussions with the cftc be able to offer these products like vtc and futures and options to our customer base. And how do you differentiate yourselves, i suppose with ftx versus ftx us sure? So, although theyre, ultimately you know, majority owns by sam bankman freed um their run as two separate companies with some shared technology, but ftx us runs entirely in the u.s u.s personnel. U.S servers us machines, we have completely separate order book liquidity and we need to for regulatory reasons, thats why right now, ftx us is just a spot, crypto currency exchange and, more recently, an nft platform, but were looking to offer derivatives. The only way we know that we can, which is by operating underneath the cftc regulatory regime and ftx of course, has raised a ton of money, 900 million, an 18 billion evaluation – and i see a lot of that going into the marketing. We got steph curry, uh tom brady and we uh also uh kevin oleary. We just spoke to earlier so tell me about this marketing push and what youre hoping to see uh the fruits of your labor in that regard.
So, as you know, ftx us is a pretty young exchange. You know were only about a year old and you think about us competing against some of the major incumbents in this space like coinbase and kraken, who have you know nearly a decade of experience, its an uphill battle to do customer acquisition and what we wanted to Do is get our names out there to tens of millions of users in a quick way, and one way to do that rather than you know, doing the sort of traditional method of going out and buying. You know google ads or facebook ads is. You know whats something that everyone in the country you know, watches or knows about well how about major league baseball? How about the nfl? You know how about kevin, oleary and so its through these partnerships that were able to sort of show people that you know we are a reliable um compliance, safe brands for people to trust their money with and the mlb agrees. You know tom brady agrees. Steph curry agrees corresponding with that marketing. Definitely seeing a growth of active users of general brand awareness of search hits um and so its definitely working, but we also like to work with these partners a lot of our charitable initiatives as well.