I'm sitting here with Jason the CEO of Okay Coin, how are you doing today at the Future of Crypto event sponsored by Benzinga? I'm doing great. Thank you thanks for having me here! I Think a lot of people listening to this are gonna get an extreme amount of insight to what's currently happening in Crypto because obviously you have a pretty high up position in the world of crypto. I Want to start off with right now, especially with the contagion of FTX and all that. there's a lot of high level things of like was it theft, was it fraud and I don't think either of us are lawyers so let's not get into there.

But to your understanding, for people who want a little bit of a deeper dive into like how this played out especially FTX and exchange okay coin in exchange I Feel like you have special insight for that, to your understanding, how would you explain the situation? yeah I mean uh again. I know just as much as you do reading uh, what's been out in public everything's sort of, um, still being investigated, but to my knowledge, uh, it seems like they basically didn't do the core function of what they should do, which is protect your customers assets. Yes, and uh, you know, as an exchange, we obviously take customer deposits and then we make it available for use on the platform for trading for earning um, for withdrawals and deposits. but that first part, taking the depositors assets and keeping it safe and secure.

They seem to have failed at that part. and from what I've read, um, there were some really serious systematic both on a technical level but also from a governance and governance of human governance level failures that just allowed some of the uh I don't know who specifically to move money with uh, move customer funds off the exchange to their sister company, a trading company called Alameda. They also had uh, the lack lack of controls where you know there would be checks and balances on those types of movements in the first place. and I think um, you know, having been at Okay Coin and Run run this for almost seven years now, checks and controls systems, processes.

these are Paramount to protecting your customer funds right? We don't want Bad actors inside our company as well as outside our company to be able to get a hold of customer assets. and so that's that fundamentally is the failure. Uh, there you hit on a very interesting point. Uh, to my understanding of so many forms of markets, one of the most important things is risk management.

Like you have entire departments to do it and I wish it were a joke, but that almost seems to be literally non-existent at the Frankenstein combination between FTX and Alameda Like just all the risks are like, we don't even have that among many other things which it's kind of I Guess scary that it got to that point and just so everyone knows, obviously we're on the same page as everyone we are getting the information that I guess is publicly available and I would love to ask you this question about exchanges because right here I was listening to a Twitter space called that Sam Bateman free was on and someone brought up the terms of service and it said hey man, right here you said you weren't taking client funds and then he was like yeah but also if you look at the other part of terms of service, it said I kind of could and do you have any particular insights on that because like that thing is like we're signing in terms of service. but if you have things contradicting like where does that leave us yeah I mean uh, terms of service is obviously super important. Those are the agreements that uh, you as a business and the customer are entering legally into and I'll let the lawyer speak to what happens if you break those I think there are certainly some repercussions for that. Um, but as opposed to in terms of risk management, you brought up, um, number one.

you know exchanges should not be running a trading desk on the side like I don't know of anyone I I we don't do that I don't know why that's I mean I think this was back in 1920s when uh, Glass-steagall came into act. It was like Hey look Bank should not be yeah, Speculating on your content, We figured this out many years ago and to be clear, what happened here at FTX is not a failure of crypto. I think we need to be very, very clear. nothing went wrong with Crypto.

Crypto. The assets themselves, the networks, the protocols, everything worked just. it's fine. they were oblivious to the FTX Max Um and so again, this is a failure of corporate governance of a company sort of procedures and systems checks and balances.

None of that existed. And if you don't even follow your own legally binding terms of service I mean I don't know what else you know clearly doing other things wrong now. I Think you're a perfect person to answer this question because I was listening to a discussion between I think Brian Armstrong and Chamath Polyapatia and it seemed like Brian was of the camp of for years now. People within the industry such as you and your Vantage Point of it it seemed like he was always kind of scratching his head.

How was FTX pulling off so many things because you guys know your own books, You know what's going on, you know the health of your own business and it seems like he was confused knowing all of coinbases numbers of like how were they pulling off XYZ Is that a common sentiment that was held by like a bunch of people in The Knowing Crypto Where a lot of you scratching your head over the past couple years saying where is FTX coming up with this money or is that a thought held just by coinbase Brian Armstrong Yeah, I don't know what Brian Armstrong said specifically. Uh, but certainly you know we. We've been in the space for almost 10 years now. 10 years next year.

Um, and so we've seen competitors come and go and when people come up very quickly um and then really get to this that size that? FTX And certainly there are questions right? like how did they do things? Um, is there something that they're doing that we're not doing answer clearly. Yes, uh, um and so questions are asked. Um, but you know we don't get an inside look at what you know in hindsight. Now we do.

but uh, you know it's it's hard to meaningfully do much. Beyond just be like, hey, look, is there something we can learn for from or not right? And so we treat. You know, we obviously look at all of our competitors and see what they're doing. Um, yeah and just try to Again, we have.

We only have public information to work off of. Definitely to wrap this all up, Obviously we're speaking at a point right now where we're clearly in a crypto. winter like 2021 was amazing. Now we're kind of a year removed from the all-time highs.

What is your opinion? I'm not talking this week, this month, or even next year, where are you at mentally not even speaking for the business of you? A lover of the crypto world, where are you still on your long-term Viewpoint Like how do you like I guess mentally get over the downfall we're at right now. but like what keeps you going for like 10 20 years out for me at least I Like to take a step back. uh, you know. I've been involved in the crypto space um for almost 10 years now and I like to take a step back and just look, hey, look, Two years ago, Three years ago, five years ago, where were we? Um, and if you look today, where we are, we have, um, tremendous adoption of crypto.

Even if it's not, uh, quite, um, on the business side yet. But the mental adoption is is there right? Like you have governments, you have whole countries looking to adopt crypto, you have, um, new Industries sprouting from the basis of the technology and opportunities that crypto enables. and um, it's hard to see exactly how that plays out. But if you look at the trajectory of that, more people want to learn about crypto, more people want to access crypto developers, More and more developers are building on Crypto.

How can you not be excited about that? regardless of how the price action is right. and we've seen Bear Markets and Bull Markets come and go. But at the end of the day, the trajectory, uh, of what's being built on crypto and the adoption of that is just constantly going up. It's so interesting you brought that up.

So many people I've spoken with today. That's what they're focusing on. They're focusing on the buildings, They're focusing on the quality of the builders, the amount of Builders and the trajectory of them. And that seems to be a lot of confidence in the industry.

not necessarily like the current spot price of Bitcoin Good look at the industry look we're building, look at the technology and extrapolate that forward. So I appreciate your thoughts. Thank you so much, thank you so much.