The untold TRUTH of FTX, CELSIUS, & 3AC! (Lessons learned from all the Black Swans)
Is Binance Next?
Cyrus Fazel (CEO) & Alex Fazel (CPO) are founding members of SwissBorg crypto exchange.
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Timestamps:
0:00 – Intro
1:47 – Who are the Swissborg Brothers?
4:46 – Bitcoin saved our family
6:46 – Tell us about Swissborg crypto exchange?
8:03 – Lessons learned from all the Black Swans
11:59 – 3 Biggest problems (leverage, etc)
13:29 – Alameda asks for money
15:09 – Three Arrow Capital
20:52 – SBF was shady, but did you know direct fraud?
23:42 – 3AC asks to borrow money 1 month before blow up
26:10 – DeFi (what to look for)
27:28 – Nuri (crypto wallet) chooses Celsius for DeFi yield
28:52 – DeFi (what to look for) pt2
30:28 – Binance 100% SOLID?
39:40 – Where the industry NEEDS to go!
44:14 – Final thoughts
**Note: My overall opinion is that the name of the game is to accumulate as much Bitcoin as possible. Alts are interesting but a lot more speculative. I use them to accumulate more Bitcoin.
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We did talk to Sun Tzu. We did talk to SBF a few
times. We talked to Mashinsky multiple times the Few calls I had with him was always in the middle
of the night super awkward it was really like A car salesman even during uh you know when
everything was falling up and everything was Blowing up with Celsius you know Alameda coming
to us and asking for like you know 500 million Dollars which that back then did alert us yeah
I had the conversation sized don't spoil it I Have the conversation can I share with you guys
word for word I just found it on telegram is that Okay I'll literally tell you exactly exactly what
happens for AC we talked about sam bankman freed We talked about FTX three Arrow Capital Celsius
the elephant in the room you guys have inside Knowledge dealing with these Heavy Hitters
in crypto do you think binance is 100 solid Altcoin daily Smash Up the like
button today we are joined by two Leading founding members of one of the
biggest cryptocurrency exchanges in the World Swiss Borg Alex and Cyrus
Faisal how you guys doing today Great very well super excited great to
have you guys we met in Dubai a future Blockchain Summit and we were talking before
this and you guys were in conversations with FTX Celsius taraluna three Arrow Capital the
companies that all went under in the past Year you guys passed on them and in today's
video we're going to talk about how to avoid The next FTX disaster and lessons learned
from all of the black swans big guys down Absolutely awesome so before we jump into
that though let's let the audience get to Know you guys a little bit tell us
about your experience in crypto how You founded Swiss Borg and feel free
to brag a little bit girlfriend Alex So you know what's really funny with this guys is
so first of all for all those watching we're all Brothers right so this is uh Bromance 2.0 but you
know the funny thing between Cyrus and I is Cyrus Was always the zero to one guy who's an incredible
Visionary if if I had to name his superpower he Would always predict future Trends which was very
very interesting and I didn't have that mindset I'm more of a one to two guy so I like to take
ideas even when I was little I used to when I used To draw things you I don't know if remember Psy
but I would like to draw for example a Dragon Ball Character um and then I'll just change the hair
a little bit or I'd put on different clothes so I Would never I never had that Talent of being able
to invent things but I love to refine things but Uh yeah but Cyrus is essentially thanks to him I
got into this crazy crypto space but after you say Yeah I think so one of the big thing of of
our family which is quite funny it was very Persian Swiss Family and um we lost it all
like really we did lost it all and and when You lose it all your identity your wealth
that goes with it you probably live a very Trained interesting experiences as as a family
itself and I think so that was really what like It's a bit like their first time if you trade
and get wiped out and you it's very usually a
Very good experience because you'll then probably
be able not to lose your private keys and not lose Your assets or whatsoever because you learn in a
very hard way and I think so this is the reason Why we you know we always with my brother we try
to understand what is wealth but more importantly How can you accumulate wealth how can you have
your identity that will never change regardless Of wars or whatsoever and when you think about
all of these different things well essentially Blockchain and web3 is a bit the answer for this
so that's been really our Quest I would say of Our life is is not only to be wealthy but to have
this The Sovereign identity that goes with it and And and you know after working you know 10 15
years 10 years sorry in hedge funds Banking and All that we never really realized that there
was not much that talks to to us in terms of Fairness in terms of fun in terms of community
Centric so that's it was the whole big thing about Swissburg is how to democratize with management
by making it fun fairy Community Centric and you Know since our Ico which was five years ago
so today we've been really working hard with Our community to to offer this vision and to offer
applications that that back this Vision I think so And I think gents you know like connecting our
purpose sorry to interrupt but you know having This Iranian background is a key moment for
both of us and I'll tell you why number one Our parents lost all their land all their wealth
was confiscated by governments by centralized Authorities by institutions whatever you want
to call it organizations so already you can see That the office unconfiscatable censorship
resistant type model already made sense to All the wealth that we lost like becoming nubo
like Newport because the family was originally Wealthy in Iran but also recently guys are in
the pandemic my my best story with Bitcoin that Really made me love this from you know the
bottom of my heart is my dad lost his job Obviously when you hear Iranian people got to
understand when there's an embargo and all this Political BS which by the way I love to call
Bitcoin a political uh mechanism or apolitical Um asset but you wipe off everyone from the grid
from every banking system from every bank account And the only way where we could help my dad during
the pandemic who lost the job as well because she Was doing import export was to send in Bitcoin
and then he would go to the local salvation and he Would exchange his Bitcoin to the local two months
it was literally a guy the only only way to bypass Sanctions and help my dad provide provide to my
dad so that he can just put put on his late pay For electricity and and you know survive through
the pandemic where he couldn't fly so you can see It guys it's like full circle uh very meaningful
last week I paid uh two thousand five hundred Dollars Alex for his dentists yo you owe me twelve
hundred dollars and I said it with you oh no Sorry guys The Stables were even with dentists over
there it's crazy it's it's funny how how How yeah blockchain has great applications
yeah totally and that's a great story I mean
You really see the need for Bitcoin to be able
to avoid that and help your family but um Swiss Borg it's not in America but globally it's one
of the largest exchanges in the world correct Yeah I mean we definitely have our big guys here
in Europe and in Switzerland what we've been able To do is to aggregate multiple different exchanges
enable people to buy and sell at the best prices We've been able to bring as well the whole D5 part
the staking with really providing transparence see Reports to understand where the yield is coming
from I think this is very important and try to Bring different layers that enable people to
manage their wealth the most simple secure way Uh and and that's that's really what swissburg is
is Bridging the off chain world so the traditional Fintech and and I would say the web 3 world also
the long chain wearing and how you combine both Of the best worlds yeah you guys mentioned did
you guys realize that my brother didn't mention C5 or D5 but he said on chain and off chain and
I think that's a really key point because a lot Of people think that on chain is automatically
defy which is not true at all right so uh the Real D5 is Bitcoin right there's that's real
decentralization ethereum is also there but Not many other players are true D5 so that's
why we like to say you know we combine both Speaking about the D5 versus C5 and C5 is
why crypto got in trouble certain centralized Companies is why we entered one of the worst
bear markets ever Europe here in this space Um so let's take it to 2020 2021 maybe 2022 you
were having conversations with some of these guys Just as peers what red flags did you see and maybe
like the ftx's or the Celsius or the three ACS Yeah absolutely so like kind of the stories I like
to share guys is I kind of explain traditional Finance as the grandpa from the village who's wise
with experience but he's done some naughty things While Defy is his toddler nephew you know and and
they really need to write rather than fighting Or yelling at each other or being rebellious and
saying hey Grandpa you're a baby boomer you don't Get it I'm cool I'm rebellious uh we really think
that things can be learned from both worlds and Um I'll let Cyrus talk about some of the
conversations one thing I do want to point Out is it wasn't necessarily C5 but I think due
to human error human greed and all the not the Technology itself so it's really um that's one
angle to it but there's so many comparisons I Feel like what happened to us as you guys said in
the past two years is almost 20 years of mistakes Through traditional Finance so Tara USD is kind
of like the subprime crisis when you look at the Poor collateral and and the way it was stacked up
through primary and secondary markets then as you You guys know Celsius I don't know if you guys
know but in Lebanon there's a very similar story Where if you create a banking account and your
savings account they would give you 15 yield but The problem is when the Lebanese era actually
was fluctuating that killed State py and the Collateral actually damaged this very high yields
that were not sustainable so it was very similar To Celsius in some ways and then of course 3ac
is the typical long-term Capital Management over
Leveraged which is you know again that happened in
traditional finance and FTX is a bit of a fairly Madoff story right so I feel like you know we
could have avoided these mistakes guys if we if we Weren't so rebellious and constantly fighting with
trapfi and maybe learning a few lessons here and There but uh anyway sorry sorry to go on a tangent
but I thought it's cool to kind of show that you Know the sometimes the toddler even though cooler
should kind of listen or learn from some of his Grandpa's mistakes totally and and I think so to
couple to that I think so you know because as as Mentioned you know we did talk to Sun Tzu we did
talk to you know SBF a few times uh we talked to Machens scheme multiple times and we talked to
Voyager Eric very great people by the way the Larger team I still believe that they were unlucky
and they were really cool people to be honest I Think so the three others uh were definitely
probably nice people but they had that same Character that I've seen multiple times since the
debut of my career in 2007 uh and and when I saw Then I worked for you know eight years in hedge
funds and you you could see that same pattern Which is that yeah people just trade to trade and
get numbers to make performance and and and you Can make performance with certain strategies
for a certain amount of time until the Black Swan hits and I think so that that has to do
a lot of what has happened here I think that Anything that goes to Arbitrage usually works
extremely well until it blows up and you see With the Condor strategy with options and and
I've seen that and seen that so many different Times but but the the biggest disbelief which I
think so is a bit sad coming from the 3ac and all These guys you know that beautiful the gbtc
trade everyone was doing it until you should Never do it it's USD everyone got into it but
probably a lot of people knew it was going to Blow up eventually and I think so the biggest
problem of what I've seen here is people living The dream and the hopium but more importantly the
biggest flaw what I saw is three things first as A yield is not a yield if you don't know where
the yield is coming from you are the yield right That's what we all agree on and we all say
right and and back then talking to Voyager by Talking to to all these to these different C5 guys
Celsius whatsoever to like oh we're all doing D5 I'm like okay but uh we don't see your wallet
we know everyone's wallets so we know like for Example uh who's doing element Define who's not
doing D5 because it's very easy to follow these Guys right you know we that's what we all do
in crypto right we follow alameda's wallet Everyone knew which was all I might as well
it we knew pretty much what they were doing In defy and and all that but then when you
see that Celsius is saying like yeah we're A big in D5 I'm like nah you're loaning your
capital for people to doing margin Trading And I'm not saying this is a wrong business this
is probably still a good business Kraken does it Extremely well and Kraken has not blew up by the
way and then I don't think so kraken's ever going To blow up to be honest uh they might have face
different issues with with the SEC whatsoever but
It's a very credible business and they know how to
liquidate their positions they're not that they're They're in the game for a long time so I think
so that was one of the big problems first that We were seeing and we were always asked by many of
these guys even during uh you know when everything Was falling up and everything was blowing up with
Celsius you know Alameda coming to us and asking For like you know 500 million dollars of loans
and things like that with either like now man If we're not gonna lend any of our money right
now which that back then did alert us to some Extent you're like okay why are they asking us to
lend them money if they're buying out all these Different companies now who has a conversation
with that um Alameda was it Caroline Trabuco There was few people there was ramnik and three
other people that we were there was SPF at some Time but then when the whole you know I would say
we were quite in contact until mayesh with with These guys and then a little bit less after uh and
they asked you for a loan and they didn't want to Collateralize it or how did that conversation work
that you're like I don't think so the conversation Was like less than 10 minutes it was like guys can
you loan us some ether we're like no okay bye yeah They didn't go further down like but if you want
to invest in our company because back then we were Doing a fundraise too so and they were interested
that was where the initial conversation was as as BF and myself had many talks about him investing
into swissburg first was the token then he was Like oh I want some shares then we were like oh
we're not doing essentially shares this was like Oh I'm not interested anymore so I said but we
still have tokens and the tokens they were not Interested that was back in 2020 and then 2021 and
then 2022 we had less conversation essentially uh But yeah the second problem that I would say that
that a lot of people were facing here is uh then They were doing the same that lending it to 3ac
which by the way I still think that 3ac did a lot Of cool stuff uh they wanted to invest into us by
the way in Maine that was weird as well this then Blew up and we didn't talk to them anymore uh they
were doing a lot of smart things but again they Were providing a yields and they were not giving
like a fun structure which any fund manager would Have the conversation size don't spoil it I have
the conversation can I share with you guys word For word I just found it on telegram is that okay
sci-fi if I cut you off yes I'll literally tell You exactly exactly what happens for AC and this
is pretty funny so May 3 2022 uh thanks so much For the call I can imagine His Name by respects
do you have any documentation on your yields for Corporate accounts hi Alex we don't have any
documentation any documentation as all as we Only face institutional clients and they don't
need documentation so there's a big LOL there Right that's the beginning of the conversation
usually we Face the counterparties that have yield Products that face retail so we like the B2B to C
model I guess that doesn't help though can always Hop on on a call in the future so I was like okay
let's just keep in touch right uh fast forward uh To June 1st 2022. who are you talking guys uh
this is a 3ac one of the main guys at 3ac okay
So um fast forward a little bit you know this is
now June 1st 2022 and I don't know if you guys Remember but the defy yields all of a sudden
normalized so you we used to be the cool cats Offering really high yields we had 34 on usdc with
quite low risk um but then as you guys know right The whole defy yield thing is moved towards realt
uh and now all of a sudden we're we're struggling Right we're having like three four percent and the
community was very unhappy um but it was coming From T5 so we didn't have any options so then
we follow up on June 1st 2022 and I'm like um So just for you to better understand if you don't
have documentation could you at least send us your Strategy so we can look at it and he essentially
says that we have a delta neutral strategy that's Trading on options so as Cyrus was saying guys
right the three lessons for yields is if it's too High and constant if it's regular then it's like
likely to fail uh if you do not know your yields You are the yield the second one and trading is
not yield you know that those are three things That I think we need to really make sure people
understand that that's the most important like if You're investing into multi-strategy quantitative
option hedge fund that's fine you know you're Paying two percent twenty percent performance
fee and you know what's your risk and it doesn't Matter and you know what your liquidity as well
right it sells this to the beginning they were Not that liquid I think so there were like three
three weeks didn't really have a real thing but They had the guy was like were not super liquid
and then they're like yeah but the Swissport guys Or these guys they're giving that are like well
we're giving staking and yield farming it's on Ave and compound and and different other things
we can we could even be liquid within hours right Or in seconds it's uh those things are liquid
and I think so this is where it started to slip Around it's like I just we're jigging absolute
return based on margin trading option trading a Lot of different quantitative strategies and then
which I don't know I just saw the the cafe Zilla It looks like actually it was more Ponzi schemes
than than I don't know if it's true or not I have No clue about that but still trying to offer
higher yields for just bringing more AUM and we Definitely suffered a lot everyone was like oh you
guys at Swissport you guys you know you suck you Only give us five percent and you neither those
Gap gives us 15 are like yeah man there's no free Risk did you guys feel fomo like it was working
for a while oh yeah oh yeah yeah yeah it's the Yeah it's the worst sensation because you're
you're you're building the best thing possible And and you're you're everyone's flying from
your platform because people still uh believe That the other risk is better and and and and I
do have a so I do have an actual specific part Um that I think justifies why we do this guys
you know why people still look for high yields And good opportunities for me the way I break
down the crypto demographics you know the average Person I think correct me if I'm wrong guys
it's someone where in terms of wealth is more Like in the middle class so middle class well
very high literacy because they're learning a
Lot and they want to make wealth High motivation
as well because they really want to make wealth So if you take those components right you think
about someone who's middle class High literacy High motivation they're seeking for life change
changing games while the rich people are looking More to preserve their wealth right it's it's a
very it's almost like a cross on a curve right so Um and I think that's why right which
unfortunately and then on top of that The genes and D5 not everyone has come back from
uh come from a traditional Financial background Where you know risk mitigation risk risk risk is
really ingrained into your brain um but uh I don't Know I I think that's probably the excuse on why
people are looking for these type of opportunities So nothing wrong against them it's just it was
a really hard time for us oh here there's an Elephant in the room we need to talk about there's
an elephant in the room we need to talk about but Before I ask you this question going back to
Sam bankman freed in your conversations or you Know you know indirect dealings with sandbankment
freed over the years you am I correct in saying That you thought there are some shady stuff going
on but did you ever think there was direct fraud No no I I was even 100 sure there wasn't
direct fraud because I knew that this guy Was going to be a politician so why would
he go fraud why would you want to fraud I think so which happens to a lot of kids right is
that you get to clean your room and sometimes you Put some toys under your bed on your bed right and
then maybe suddenly one day you start playing with Matches it gets a little bit on fire and and
then you start doing stupid [ __ ] so that's What happened the guy was super smart uh uh but
not but not like he didn't have a track record He did some Arbitrage between Korea and Japan like
everyone was doing back then ourselves as well I Even asked Alex back then it's like do you want
to do Swiss board or do you want to set up a fund Because we can make billion dollars just you going
to to um are sending Bitcoin and you selling it on Um bit flyer or changing your yen into Dollars
going back and doing that loophole and all Everyone knew it and then Korea was even bigger
it was five percent spreads right so he didn't Have such a a big I would say uh experience of an
investment manager and I think So eventually they Caught up to him that it you know he was trying
to cover position by covision and and then you Know putting other people to make sure that's he's
gonna play this out and then he thought that ftt Was the token that was the new Bitcoin and you're
able to to get even higher leverage and and then It goes to the Madoff right you start
to to believe into your lie and and Eventually well there's a guy who turns out
that he's not your friend then he says that You're gonna blow up and and that's what binance
and CeCe did right so I don't think so he he he Wanted to get there just that ego very similar
to long-term capital managements that mixed up With murder with Madoff himself the few calls
I had with him was always in the middle of The night super awkward I was like why'd you
call him at three o'clock in the morning uh
He's like oh it's a Sunday you know it's good
for Sunday so he had weird things going on so But uh it looked like more like a HTT type of guy
a little bit like me but like 10 times worse and Um and someone was too big for his boots by
the way guys I just found one of the last Messages from three AC from that conversation
we talked about earlier and on June 3rd 2022 Which I believe is a month prior to blowing
up they asked to borrow East usdc and Bitcoin From us offering us three percent APR on
bitcoin five on East and 15 on Stables so That was one month before 3ac actually uh blew
up so and what did you think so rather than try It's really funny that that I see it now right
because I didn't really revisit it that much But since you guys said you know let's talk about
the crap that happened last year so we can learn Lessons from it right um I'm I'm actually thinking
oh my God I could have seen this earlier if I was Paying attention and why didn't you give it to
them because you didn't they didn't give you any Due diligence with that yeah they were selling
things yeah but the way they were selling things Austin is that it was really like a car salesman
like you know they didn't want to provide a number One any like strategy or any clear uh information
but on top of that their their main line was hey We're we're the biggest lender in the entire
industry you know everyone lends from us and They would just put the name of the people so they
would use the you know the some sort of social Proof tactic to persuade us right but that's the
same mind hey guys we're the biggest lender in Industry look at all the companies we're working
with and that's that was the same line coming Back and back again trying to make us look like
once but you know obviously again I think so the Why we didn't invest is that it was an investment
it wasn't lending or yielding right you don't lend Money to money managers that doesn't exist you
invest into a fund it's as clear as that as an Investment mandate has a fund feeder fund maybe
in in Europe or in uh and and Delaware and for The states and then you have a master fund that's
in the Cayman it's the old business for 25 years Old it's nothing new and I potentially I would
have invested into the fund and give them you Know they would make two percent and twenty two
percent management fees 20 performance fees but Like giving the funds of our users there it's just
impossible it's not even legal for ourselves first Uh seconds it would not never match our liquidity
third it would never match the risk of of what we Want to give to our users and the third is just
that it's not on our mission our mission is not To give money to hedge fund managers is eventually
to to decentralize the world and and for that defy These protocols such as I have a compound pancake
Swap and uni swap are not maybe the best uh 100 Decentralized but they are leaning towards our
mission and I think so that's that's that's why We never landed same to Celsius they're very
like oh we're going to give you the best yield And all of that and and this the saddest story
of this was when we finished the the talk 2049 I think it was in April uh in London and I was
saying well this is what's going to happen to D5
Is that it's the it was a picture from
2007 that I was it was coming from the Uh uh the subprime 2008 when the subprimes
happened the economists did a very nice thing On talking like what was CTO squares and where
it was coming from and all these mortgage-backed Securities and all that and the flipping and
that's how the economy fell in 2008 right and I said this is gonna exactly gonna happen to D5
because right now people are patching together Products that don't work don't have the same
liquidity you don't have the same risk and if One Falls and blows up then other ones are going
to flow and blow up and that's what always happens And and uh the guys from Nuri in Germany that
was a really sad one uh so Neri was a really One of the coolest uh European exchange at the
same time like a wallet for for credit cards Yeah we were at talks with them and they're
like oh how are you doing your D5 or like oh We do it all by ourselves and they're like oh
do you do it for other companies we're like no We just do it for ourselves but cop your wallet
do the same thing if you want and they're like Oh no we don't have a team for that unfortunately
that we're going to give our our money to Celsius And I just made a a face and like uh you
know and into like what's your face I'm like I wouldn't do them it's it's not be I don't trust
the fact that you don't know where your money is Going is going and you don't know where the yield
is coming from that is the recipe for disaster And two months later it was [ __ ] horrible
these guys got caught in and they're now bankrupt And it's it was a six seven years company in 2014
so even more eight-year-old company one of the Oldest European one and and and and and there's
so many more examples that because people always Think about cell says how they blew up people's
Fortune directly but a lot of their money was Actually B2B as well and that had a lot of
repercussions on a lot of yeah uh you know Other citizens around the world by the way by the
way Aaron and Austin just real quick uh Cyrus just Dropped some Alpha that there so you can literally
follow Swissport CL strategies by yourselves guys So you don't have to use our products this goes
against our our business interests but uh and the Reason why I think it's it's a great idea to do
that especially from the US is you know Swissport Is really focusing on risk first and the way we
do the risk assessments it's really amazingly Done so it goes through our code experts who go
all the way from GitHub it goes to the platforms Code as well then it goes through smart contract
developer risk and it goes through the quants Um so the system we put in place there it's
it's amazing how much work is put into trying To mitigating this risk um and there's everything
from they'll score hey do you guys have the source Court availability is the front UI Point pointing
to the correct smart contract what about the admin Risk what a so maybe I can continue so adminar
is team risk we talk to the teams uh as much as We can look at the token we look at the liquidity
of the tokens we look at the pool the max size of The pools so we really looked through like seven
to different eight different risk metrics we score
Them on a daily basis we try to really as well
do ongoing due diligence to make sure that like Whenever there's updates whenever there's things
that change if TDL changes whatsoever we we really Monitor all this risk and uh yeah we love doing
that you know that's we have you know a lot of People at Swiss board here 200 people and we have
quite a big D5 team as we're getting to our last Couple questions I have one more topic I wanted
to cover I alluded to this a couple minutes ago We talked about sand bankman freed we talked
about FTX three Arrow Capital Celsius the elephant In the room you guys have inside knowledge
dealing with these Heavy Hitters in crypto Do you think binance is 100
solid or what's your experience We're trying to get our token listed there
for five years and we haven't managed I don't know I should be truthful or
not you know I I saw CZ recently and Uh I really have strong respect for what
they've built uh I really believe that uh Uh you know born out of an Ico and and being
able to service so many users around the world In a non-regulatory fashion I still think this
is super cool as a person I I really really uh My props to CZ and the entire team and especially
doing that is initially out of Singapore and then In as well China you know it's a really huge thing
to do so for that reason I think so the guys that Have done this congrats then now what's going
forward there's definitely some things that I I mean we trust binance we we we're aggregated
with the finance so that's one thing for sure They do play some like dodgy things which is
not really cool you know there's this whole Brisk that's going on with busd we know that uh we
know that their chat Gateway is being cut more and More so those those those have some risks uh we
know that you know the solvency is something that They've really pushed to show how big they are
we're seeing that today uh most of old exchange From Sexes is actually on binance so will they be
here in the future I'm pretty sure however I'm I I'm the only thing I'm a bit worried about and I
think so even CZ himself already agreed on this Is that they are centralizing a lot of power into
what is happening in crypto and you know what we Saw recently with things being supported on BNB
chain and on ethereum how they are getting out of Circle out of want to get out the fight between
Circle and their vusd and how they could take Sides of this business and eventually centralize
a lot what we're doing here and and that's Where I'm a bit more afraid uh somewhere on the
philosophical and and making sure that uh binance Does believe in the decentralized in philosophy of
of crypto and I think as well it's always hard to Know who are the shareholders where is the company
based things that that we for example are exactly On the opposite we really try to become as neutral
as possible very Swiss and boring maybe for that But I think so it's very important to be neutral
when you're in the exchange or in business in General and then you really have to push yeah
decentralization asset core but besides that I'm pretty sure binance will be here for long and
uh yeah and the probably the biggest risk I mean I
Have great I have great respect for CG as well um
I think he he did some crazy things and you know It's really hard guys right because you can do it
the way like Swissport like Cyrus was saying the Swiss boring way where you kyc every single person
from the very first Ico person uh Community member Or you just break all the rules when there are no
rules actually right you're not even breaking the Rules because there's no regulatory framework for
crypto at the time so the guy just goes running Right he just goes running running uh I can do a
few naughty things as a kid blah blah blah blah And then all of a sudden you know when one comes
an adult comes and says hey bad boy you shouldn't Be doing that you can simply say oh I'm sorry I
didn't know and you know you can play the innocent Card but in in the in the game Finance right they
they just went running running running and made so Much money where a lot of the banks have built
themselves up the same way right and once you Have lots of capital then you can work on the
regulatory side hire the betterers in the world And defend you because at the end of the day there
were no clear regulations so don't punish me or Don't Point finger at me so it's either that way
or you do it the Swissport boring way where you Kyc the first member from the Ico onwards right
and and our growth was a lot slower obviously than A binance so there are two ways of doing it but
what I worry the most for buying what I wear the Most about Finance is being scapegoated that's
what I worry about guys if there's one of The Regulators that really wants to flex his hustles
and really try to scare the industry uh they will Definitely go after the biggest fish right you
know when you have a bad kid in in class and he's Making a master he's doing some things you know
you're definitely going to try to punish or call Out the bad kid first so the strongest kid so that
the others follow or same thing for anything you Know in life so I'm worried about the scapegoating
and and I think binance are are smart enough to To realize that they need to invest and defy real
real defy um protocols and start really investing In different type of very promising projects or
build their own projects that that are a little More suited to The Regulators because you know
you can't just go out there and buy an exchange in Japan a shell company that has a license but then
connected to the binance order books it doesn't Work like that right like The Regulators don't
don't accept that you can't just buy licenses Or I'm going to buy a bank in Albania because
it's cheap and then I'm going to kind of bring That volume to the the binance that's based in
Dubai that used to be you know in Singapore it Won't work just like in the US right you guys saw
with binance us um they cannot have a back door For the finance world or the exchange so I think
that's the thing that I worried about the most and And even some of my friends here in in Dubai
they're they're concerned about that as well The Regulatory crackdowns and potentially being
scapegoated appreciate it so they shared their Um assets recently proof of proof
of Reserve proof of assets there's Some question on liabilities but in your
opinion binance is okay they're solvent
And if they're not solvents we're going
to probably go for crypto winter forever Or for a long time at the least uh that's for
sure uh but yeah I think so more transparency I think so and more regulation uh will probably
change and I'm sure binance will make the right Move they're already doing it and they're making
a lot of efforts on this and uh you know the the Day we are starting to go into security tokens
and all these aspects uh that there's more than Just buying and selling crypto and offering
cooler products and and all that you will Need to be more regulated and if you're not
well then essentially is going to be more and More complicated to offer these cool things
right so for example Swiss board right now We're doing our series a it's our community
that's investing in it 14 000 people it's Amazing uh we raise 16 million dollars so far
uh this is eventually going to be a token right And and the token will itself is that if you're
not regulated you don't have a security token Exchange license well then you won't be able to
distribute that and you're going to see more and More companies that are probably going to tokenize
their their their shareholder uh of their company And for that well you need all these licenses so I
that that's where I'm going to see maybe you know Was very interesting like like in the hedge funds
it reminds me about the hedge funds you see a lot Of hedge funds growing very rapidly and send them
growing down and then some rapid lean going down If you look at the last 20 years and of course
some have been big and all and always been big but If you remember Austin and Aaron back in 2017 do
you remember what was one of the biggest Exchange Cryptopia that was a small one yeah that was one It was not the biggest but it was
definitely a big one other ones Bitfinex right that's true that was still a
one but bittrex was what quite a big one yeah Not that big anymore uh if you look at one
of the biggest one was the one that Justin's Son bought out uh no the other one uh it was
done in the states by a french guy uh anyways I was in Japan no no no no but there was different
other exchanges That Grew and and then reduced Their activity and and you you see that all
in all and I think so there's still a lot of Chances that we will see another one grow much
more and some other ones that will essentially Shrink their activities due to multiple
different yeah business issues I would say Gentlemen can I share with you one last one Alex
you take it guys yeah so you know for the for The dexes and also for all the Sexes out there
right the proof of life liabilities have to be Some sort of external audit right to see if you
have any sort of you know collateral or leverage That's not on chain or maybe you you know some
of your money some of your yields are coming from These yeah these forges or some you know high-risk
loans or stuff like that right so that's one thing I would love to have um proof of liabilities on
chainsaw audited but also stamped on chain I think That that could be a massive step forward but my
Ultimate Dream guys you know like um when it comes
To that good old grandpa uh Uncle CFI you know
Uncle Chad fi that talks to his little nephew D Feiner is to avoid number one you know everything
that's happening D5 today like last month alone we Had another 130 million dollars in hacks in D5 and
and those things need to stop right since instead App there's been so much money lost and I think
that could avoid it if we look at some of the the Risk assessment or the risk evaluations systems
that we that we have from chat Phi but you know I think really that the most beautiful thing about
combining the on-chin and off chain worlds that my Brother always used to say like I have I feel the
urge to merge the on-chain and off chain worlds Is really to from the fundraise not going through
the VCS right not not going to the VC model doing It through the community of fundraise so that
rather than having four or five people four or Five companies or or funds having you know
thousands of people um because that that's One thing like if you're an on-chain project but
you raise through four to five VCS then you screw Yourself over it because then your governance
is centralized as well and and decentralized Governance is one of the most important Tools in
nd5 right so if you raise funds through limited Amount of people then you're you're screwing
up your decentralized governance at least for The first three six nine to 12 months and you guys
have seen that right with Paulie um what was it um Poly Capital right with um compound so I really
think that um what needs to be decentralized it Starts all the way from the fundraise because then
that transfers into governance you can still try To grow the protocol and potentialize afterwards
but having that decentralized governance is key um Video or semasterial guys you know where
maybe it's it's non-custodial but you have Some potentialized vaults where you
can store your private keys so if I Die tomorrow and Austin and you're my
cousins uh maybe we can have some sort Of multi-sake where you guys can still sign
it for me and then unlock all the funds right Obviously execution needs to be Unchained we
still need that interoperability uh because you Know Bitcoin ethereum it's it's very complicated
right to do this on chain still erc20 is amazing But I still feel like D5 is in its point where
you have these little tribes around the world but There's no Bridge or there's no plane to fly over
to the next country or Island you're stuck on on Your in your Island and you have to take this raft
boat you know with sharks and stuff all around you That are going to eat you a lot right that's the
way I see um G5 still on the execution side um so That interoperability will be absolutely key with
the cross chain um features and then and then it's Beautiful right because once you hit that model
you know when you have this chord from where some Of you some of us right when we love a brand let's
say we love Nike or whatever or Spotify or Netflix We're just a a user of a product but we're not
an investor we're not a part of the governance We're not a part of the product development and
we're not a part of the the and and of course On top of that we're a user so I think you know
as you guys see like I don't know if the Dao is
Really really feasible through automation uh that
sounds like a big challenge if that's realistic Or not and correct me if I'm wrong Austin Aaron
but I think the corporate the permit not only Should be inverted but it should be open so that
really you can really have a community uh LED and Community Centric and Community Driven companies
the dream for me I think that's a great way to end It appreciate you guys coming on the show today
links to their personal twitters down below give Them a follow if you're a part of the 60 of our
audience who's outside of America go check out Swissport linked below Cyrus Alex give us final
thoughts for the altcoin daily audience yeah I Mean continue to to Really pass on the love that
you have for for crypto for web 3 decentralization And and and that's the most beautiful thing
especially right now we know that we Face 2022 Was was a very difficult one I think so the beauty
is that web3 is not just going to grow from here It's going to exponentially grow and there's so
much to be done and uh yeah your voice is heard by Many people and let's just accumulate the number
of peoples to bring into the decentralization And and more than ever I think so this planet
really needs it because if if we're not leaning Towards there sooner or later we're going to be
trapped into something there will be no exit doors Alex yeah beautifully said and I I have to say
guys like Austin and Aaron um I don't fomo or I I don't fan bull very often but when I did see you
two guys I did Fanboy a little bit I tried to keep My cool I tried to keep my cool but uh there are
a few people that I met I really respect you guys You know you guys coin Bureau I've been on text or
the guys where I I kind of fanboyed but I tried to Keep my phone come on I'm 42 years of age you know
I can't I can't be like a little cheerleader but I love what you guys are doing I think you're
you're the great face for for this industry Um and representatives great evangelists
ambassadors Educators however you want to Call each other uh and you guys and Eric vuories
by the way Eric buis I think is probably uh One of my favorite D5 figures I think he's he's
probably the king when it comes to representing Who we are but you guys are the princes wow
appreciate that and you did keep your cool In Dubai it was awesome meeting you you guys
are cool guys and uh you know happy happy to Do this now but uh thank you guys so much for
coming on today thank you thanks so much boom
