FTX Goes Bankrupt: What’s Next? Bloomberg Crypto 11/22/2022

MATT:
WE ARE LIVE IN NEW YORK CITY. KAILEY: WELCOME TO "BLOOMBERG CRYPTO,"
THE TECHNOLOGY SHAPING THE WORLD OF DECENTRALIZED FINANCE.
MATT: THE FALLOUT OF THE FTX COLLAPSE
SHOWS FEW SIGNS OF EASING. WE HAVE EXPERT INSIGHT. KAILEY: WE WILL BE SPEAKING WITH JEREMY
ALLAIRE, CEO OF CIRCLE. MATT: CELEBRITIES HAVE NOT BEEN
ISOLATED OR IMMUNE TO THE FALLOUT.
DETAILS ON THE SPORTS STARS THAT HAVE BEEN ENTANGLED IN THE
FTX MESS. KAILEY: ALL THAT IS AHEAD.
LET'S GET A SNAPSHOT OF THE MARKET.
THE BEST WAY TO DO THAT, CRYP GO. BITCOIN IS BACK ABOVE THE
$16,000 LEVEL, BARELY. UP ABOUT 3% ON THE DAY. IT BROKE BELOW $16,000
YESTERDAY BUT THAT IS THE RANGE NOW POST FTX.
ETHER GAINING AS WELL. IT IS TRADING NOW AT $1100. LITECOIN AND DOGECOIN ARE
RIPPING. COINBASE, THE RIVAL EXCHANGE
THAT HIT A RECORD LOW YESTERDAY IS REBOUNDING A BIT ON THIS
TUESDAY SESSION. SUMMER INVESTORS ARE COMING
INTO BUY THE DIP, INCLUDING CATHIE WOOD.
SHE SNAPPED UP ABOUT 1.3 MILLION SHARES. MATT:
ANALYST ARE SHUNNING THE STOCK. I HAVE THE PRICE UP HERE IN THE
TOP HALF.

AS WE WENT FROM $350 DOWN TO
$40 A SHARE, YOU HAD MORE THAN 70% OF ANALYSTS CALLING THE
SHARES A BUY. THAT HAS SHRUNKEN NOW.
KEEPING AN EYE ON HOW FAR THE CRYPTO CONTAGION MIGHT SPREAD. >> THE COLLAPSE OF FTX. >> THE SPILLOVER IS LIMITED. >> NOT A LOT OF SPILLOVER OTHER
THAN THE WEALTH EFFECTS. >> IF YOU PUT TOKENS OR COINS
ON AN EXCHANGE, YOU ABSORB THE LOSSES. THAT IS WHY THERE IS NO
CONTAGION OUTSIDE THE FINANCIAL SECTOR. >> THE BROADER MARKET HAS
SHRUGGED IT OFF. >> YOU LOOK AT THE MONEY BEING
SPENT BY FTX ON ADVERTISING, CRYPTO AS A WHOLE, THIS WILL
FEED INTO THE ECONOMY.

>> THERE IS CONCERN ABOUT
LEVERAGE RATIOS THAT HAVE BUILT UP. >> A LIQUIDITY CRISIS AND
LIQUIDATION CASCADE. >> PEOPLE NEED TO ROLLOVER
THEIR DEBT AND THEY FACE THE HIGHER INTEREST RATES. >> FTX AND VOYAGER AND CELSIUS
AND THREE ARROWS CAPITAL AND GOING BACK TO TERRA. >> THERE ARE STILL CHAPTERS
LEFT IN THE STORY. MATT: GENESIS IS THE LATEST FIRM
CAUGHT UP IN THE CHAOS. SONALI BASAK IS HERE WITH THE
SCOOP. CINELLI: WEEK — SONALI: IT HAS BEEN SCOURING THE GLOBE
FOR A BILLION DOLLARS IN FRESH CAPITAL FOR ITS LENDING UNIT
AND IT IS WARNING INVESTORS IT MIGHT BECOME THE LATEST
CASUALTY. IT MIGHT HAVE TO FILE FOR
BANKRUPTCY OF THE FUNDING DOES NOT MATERIALIZE.
IT IS UNCLEAR HOW FAST THE LIQUIDITY CRUNCH CAUSES MORE
COMPANIES DEFAULT. SO FAR, THERE HAVE BEEN REAL
DAMAGE. THE WARNING FROM GENESIS HAS
ONLY COME DAYS SINCE THE COMPANY'S TRADING ARM ASKED FOR
$170 MILLION TIED UP IN FTX. THE LENDING BUSINESS HALTED
WITHDRAWALS WITHIN A WEEK. JIM AND I HALTED WITHDRAWALS AS
WELL. LET'S MOVE OVER TO FTX. AS THE BANKRUPTCY PROCEEDINGS
BEGIN IN DELAWARE, IT'S AN EXAMPLE OF HOW MONEY PEOPLE ARE
OWED MONEY.

MORE THAN ONE MILLION CUSTOMERS
HAD FUNDS TIED UP. MORE THAN $3 BILLION WERE OWED
TO 50 CREDITORS, INCLUDING GENESIS.
IN THE CASE OF FTX, A LAWYER SAID DURING THE BANKRUPTCY
HEARING ON TUESDAY, WHILE CRYPTO CRISIS IS WELL
DOCUMENTED, THE FTX DRAMA IS THE LATEST AND THE LARGEST
FAILURE WITH EFFECTIVELY A RUN ON THE BANK.
WITH RESPECT TO INTERNATIONAL EXCHANGE AND ITS U.S. EXCHANGE.
INVESTIGATORS, LAWMAKERS AND REGULATORS ARE ON THE WORLD ARE
NOW WATCHING HOW THIS PLAYS OUT TO MAKE SURE CUSTOMERS FIND
SOME REDEMPTION. MATT: JOINING US NOW TO HELP FIGURE
STUFF OUT IS JONATHAN LEVIN, COFOUNDER AND CHIEF STRATEGY
OFFICER AT CHAINALYSIS, A BLOCKCHAIN ANALYSIS FIRM.
BEFORE WE GET INTO THE STORY YOUR SOFTWARE MAKES A LITTLE
MORE COMPREHENSIBLE FROM THE DATA ON THE BLOCKCHAIN, HOW
EXPOSED ARE YOU TO FTX? YOU HAVE BEEN LISTED AS A
CREDITOR AND YOU ARE HELPING TO FIND ASSETS IN BANKRUPTCY.
JONATHAN: THANKS SO MUCH FOR HAVING ME.
CHAINALYSIS IS A BLOCKCHAIN ANALYSIS FIRM USED TWO TRACK
FUNDS THAT MOVE ON THE BLOCKCHAIN.
WHEN THIS HAPPENS EVERY TURNS TO UNDERSTAND WHERE ALL THE
ASSETS SITTING NOW.

FOR THE ADMINISTRATORS OF FTX,
IN ORDER TO ENSURE THERE CAN BE AN ORDERLY WIND DOWN THE
OPERATION AND RETURN OF HIS MANY CUSTOMER DEPOSITS AS
POSSIBLE, THE USE CHAINALYSIS TO FIND THOSE ASSETS AND
DISCOVER HOW THOSE CAN BE RETURNED TO THEIR DUE CREDITORS.
MATT: WHAT ABOUT THE EXPOSURE YOU
HAVE? IS IT A BILL THAT CHAINALYSIS
HAS DUE FROM FTX? ARE YOU PROFESSIONALLY OR
PERSONALLY INVESTED IN OR HAVE FUNDS ON THE EXCHANGE?
YOU WERE STUDYING CRYPTOCURRENCIES AT OXFORD A
LONG TIME AGO. MAYBE YOU WERE AN EARLY
INVESTOR. JONATHAN: CHAINALYSIS DID PROVIDE
SOFTWARE SERVICES TO FTX. THAT CONTINUES AT THIS TIME SO
THEY CAN ACTUALLY UNDERSTAND WHERE THE MONEY IS GOING AND
WHERE IT'S COMING FROM IN ORDER TO BEST UNDERSTAND THE POSITION
OF ITS ASSETS. WHAT WE HAVE IS THE ABILITY TO
HELP ENSURE AS FUNDS ARE MOVING WE CAN ALERT OTHER PEOPLE SO
THEY CAN ENSURE ANY OF THE FUNDS THAT SHOULD NOT BE TAKEN
OUT FROM THE EXCHANGE ARE DULY RETURNED AND THEY CAN HAVE A
PROCESS TO RETURN THAT MONEY TO CREDITORS.

KAILEY:
WE HEARD ABOUT SOME OF THE STOLEN FUNDS AT THE HEARING
TODAY. A LAWYER TOLD THE COURT THEY
HAVE A SUBSTANTIAL LIMIT OF ASSETS THAT HAVE BEEN STOLEN OR
ARE MISSING. WHAT ARE YOU FINDING WHEN
YOU'RE DOING THIS TRACKING? JONATHAN:
WE HAVE SEEN THE AMOUNT OF FUNDS THAT WERE ASSOCIATED WITH
FTX WALLETS AND SOME OF THE FUNDS THAT WERE TAKEN AT THE
TIME WHEN THIS WHOLE EVENT WAS UNFOLDING.
WE HAVE SEEN SOME OF THOSE FUNDS START TO MOVE IN WAYS
WHICH HAVE BEEN TYPICALLY USED TO OBVIOUSLY — WE HAVE SEEN
SWAPPING FROM ONE CRYPTOCURRENCY INTO ANOTHER.
ALL OF THAT IS ABLE TO BE TRACKED USING OUR SOFTWARE.
WE SELL TRANSACTION MONITORING SOFTWARE TO COMPANIES LIKE FTX.
OVER 500 OTHER EXCHANGE VENUES AROUND THE WORLD, WHICH CAN
THEN GET NOTIFICATIONS IF THEY ARE RECEIVING SOME OF THOSE
FUNDS AND ASSET FREEZES CAN BE PUT IN PLACE SO DUE PROCESS CAN
BE FOLLOWED.

KAILEY: ON THE SUBJECT OF DIFFERENT
EXCHANGE VENUES, AND THE AFTERMATH OF THE IMPLOSION
BILLIONS OF DOLLARS WERE YANKED OUT OF CENTRALIZED EXCHANGES.
WHAT KIND OF ACTIVITY ARE YOU SEEING IN DECENTRALIZED
EXCHANGES? HOW MUCH ARE PEOPLE FLOODING
INTO SELF CUSTODY? JONATHAN: WE HAVE SEEN VOLUMES, AND SOME
OF THE DECENTRALIZED EXCHANGES. ONE OF THE THINGS THAT
TYPICALLY HAPPENS WHEN YOU HAVE DECENTRALIZED EXCHANGES IS
THERE IS A LOT MORE VOLUME IN TIMES OF HIGH VOLATILITY.
PEOPLE ARE MOVING MONEY BETWEEN THESE VENUES TO ENSURE PRICES
REMAIN NORMALIZED ACROSS THE DIFFERENT VENUES.
WE HAVE SEEN AN UPTICK IN VOLUME ACROSS DECENTRALIZED
EXCHANGES. WE HAVE SEEN AN OUTFLOW TO
PERSONAL WALLETS. PEOPLE TAKING MONEY AWAY FROM
VENUES AND MAKING SURE THEY HAVE CONTROL OVER THEIR FUNDS.
MATT: WHEN YOU SEE A GIANT WHILE IT
LIKE COINBASE HOLDING CUSTOMER FUNDS, HAS THAT BEEN EMPTIED?
EVEN IF PEOPLE THINK COINBASE IS SAFE — PEOPLE ARE STILL
TAKING MONEY OUT THE EXCHANGE AND PUTTING INTO PERSONAL
WALLETS.

JONATHAN: I WOULD SEPARATE THIS OUT INTO
INSTITUTIONAL CRYPTOCURRENCY TRANSACTIONS AND RETAIL
TRANSACTIONS. I THINK WHAT WE HAVE SEEN IS
SOME OF THE INSTITUTIONAL PLAYERS THAT HAVE LARGE
POSITIONS AND ARE MORE SOPHISTICATED OPERATIONALLY
HAVE MANAGED TO MOVE SOME OF THE LARGE SUMS OF MONEY.
IT SHOWS IN A LOT OF THE DATA. WHEN IT COMES TO RETAIL
CUSTOMERS AND TO TRUSTWORTHY VENUES, IT'S A MATTER OF
CONVENIENCE FOR A LOT OF PEOPLE. IT IS SAFER FOR THEM TO HAVE
MONEY INSIDE A REPUTABLE AND WELL-REGULATED VENUE OTHER THAN
TO ASSUME ALL THE RISKS OF CUSTODING YOUR ASSETS.
THERE ARE A COUPLE OF DIFFERENT STORIES PLAYING OUT IN THE DATA.
MATT: THERE ARE STORIES ABOUT THE
HACKED COINS FROM FTX.

MAYBE THEY REMOVED ON PURPOSE
FOR A BANKRUPTCY PURPOSE, OR WAS IT A HACK?
CAN YOU GIVE US A DEFINITIVE ANSWER ON WHAT HAPPENED TO
THOSE COINS AND QUANTIFY THE AMOUNT THAT LEFT FTX?
DO YOU KNOW WHERE IT IS NOW? JONATHAN:
WE CAN'T GIVE DEFINITIVE ANSWERS ON EXACTLY WHAT
HAPPENED. THIS WILL CONTINUE TO PLAY OUT
OVER A FEW WEEKS, A FEW MONTHS POTENTIALLY AS THE
INVESTIGATION UNFOLDS. IT IS POSSIBLE TO TRACK ALL THE
DIFFERENT MONEY THAT ACTUALLY LEFT FTX AS THIS WHOLE SAGA
WENT DOWN. WE MANAGED TO SEE DESPITE MONEY
MOVING ACROSS DIFFERENT BRIDGES AND SWITCHING BETWEEN DIFFERENT
CRYPTOCURRENCIES, THAT MONEY IS STILL ABLE TO BE FOLLOWED AND
GIVEN AS SIGNALS TO EXCHANGES TO PREVENT THAT MONEY FROM
BEING CASHED OUT BY USING CHAINALYSIS SOFTWARE. KAILEY:
A LOT OF REGULATORY SCRUTINY HAS BEEN SURROUNDING THE FACT
THAT THERE IS A CERTAIN LACK OF CONSUMER PROTECTIONS IN THIS
INDUSTRY. HOW SHOULD PEOPLE PROTECT
THEMSELVES FROM THE CRASHES OF THE FUTURE? JONATHAN:
IT'S A REALLY IMPORTANT CONVERSATION TO BE HAD AROUND
HOW ARE WE GOING TO BEST SEGREGATE CUSTOMER FUNDS, HOW
TO ENSURE THERE IS ADEQUATE PROTECTIONS AND BANKRUPTCY
PROCEEDINGS THAT DO PROTECT RETAIL INVESTORS AND INVESTORS
MORE GENERALLY.

THAT'S AN ONGOING CONVERSATION
WITH REGULATORS. HAVING CONSUMERS HAVE REGULATED
VENUES WHERE THEY ARE LOCAL IN THEIR GEOGRAPHY AND THEY HAVE
THE RIGHT PROTECTIONS FOR THE CONSUMERS, THAT'S ALREADY
POSSIBLE IN A LOT OF GEOGRAPHIES.
I THINK PEOPLE SHOULD LOOK AT THOSE VENUES AS PLACES WHERE
THEY SHOULD BE CONDUCTING ACTIVITY.
FOR THE MORE TECHNICALLY SOPHISTICATED, BEING ABLE TO
CONTROL YOUR OWN CRYPTOCURRENCY WITH YOUR OWN KEYS AND YOUR OWN
BACKUPS IS SOMETHING SOPHISTICATED CONSUMERS ARE
FLOCKING TO IT THIS TIME TO ENSURE THE PROTECTION OF THEIR
ASSETS. MATT: GREAT TO GET YOUR INSIGHT.
HE STUDIED ECONOMICS AND CRYPTOCURRENCIES AT OXFORD,
THEN FOUND THAT IT IS NOW THE CHIEF STRATEGY OFFICER AT
CHAINALYSIS. KAILEY: COMING UP, WE CONTINUE THE
CONVERSATION ON THE FALLOUT FROM FTX AND WHAT IT HAS MEANT
FOR STABLECOINS.

THE CEO OF CIRCLE JEREMY
ALLAIRE JOINS US NEXT. MATT: CRYPTO CONTAGION SPREADS TO
CELEBRITIES. HOW TOM BRADY AND STEPH CURRY
ARE GETTING CAUGHT UP IN THE FTX FALLOUT. KAILEY:
ACCESS ALL THE LATEST DATA AND NEWS ON CRYPTO.
CHECK OUT CRYP GO ON THE TERMINAL. THIS IS BLOOMBERG. >> WE ARE NOT GETTING
COPPERHEADS OF REFORM ANYTIME SOON. THE MOST CONGRESS CAN BE
INSPECTED TO DO WITH THE CRYPTO EVENTS OF THE PAST FEW WEEKS IS
FOCUS ON SOMETHING THEY KIND OF UNDERSTAND, WHICH IS
STABLECOINS. THEY LOOK A LITTLE BIT LIKE
MONEY MARKET FUNDS, A LITTLE LIKE DEPOSIT ACCOUNTS.
THEY GET THAT. THAT IS SOMETHING THEY CAN
LEGISLATE ON.

THE REST OF IT, I THINK WE ARE
YEARS AWAY FROM A COMPREHENSIVE LEGISLATIVE SOLUTION. KAILEY:
THAT WAS THE DIRECTOR OF POLICY RESEARCH AT BTIG'S SPEAKING ON
BLOOMBERG –JOINING US NOW IS JEREMY ALLAIRE, CEO OF CIRCLE
THAT OPERATES THE USDC STABLECOIN.
WE WILL TALK ABOUT THE STABLECOINS AND REGULATORY
ISSUES IN A MOMENT. ON FTX, YOU HAVE DETAILED WHAT
EXPOSURE TO THE COLLAPSE WAS. YOU HAVE A TINY EQUITY HOLDING
OF ABOUT $10.6 MILLION. YOU RELATIVELY MORE INSULATED.
ARE YOU STILL FEELING IT IN SOME WAY? JEREMY:
WELL WE HAVE PRIMARILY SEEN OVER THE PAST COUPLE OF WEEKS
IS, AS NOTED IN SOME OF YOUR EARLIER COVERAGE, THERE'S BEEN
A FLIGHT TO SAFETY AT A FLIGHT TO QUALITY.
WE HAVE SEEN AN INCREASE IN THE AMOUNT OF USDC PEOPLE WANT TO
HOLD.

AS PEOPLE GET OUT OF VOLATILE
MARKETS, STABLECOINS BECOME AN IMPORTANT PLACE TO STORE VALUE.
FOR US IN THE SHORT TERM, THE FACT THAT WE ARE A REGULATED
DOLLAR-BASED DIGITAL CURRENCY OBVIOUSLY IS IMPORTANT FOR THE
TRUST AND TRANSPARENCY WE OPERATE UNDER. IT IS VITAL.
I THINK IN AN ENVIRONMENT WHERE THERE ARE MANY OF THESE
UNREGULATED OR OFFSHORE INSTITUTIONS THAT ARE VERY
OPAQUE, PEOPLE DON'T UNDERSTAND THEM, ONSHORE U.S.
FINANCIAL SYSTEM REGULATED DOLLAR-BASED DIGITAL CURRENCIES
ARE ATTRACTIVE. FOR US, WE HAVE SEEN IT ACCRUE
TO USDC. KAILEY: YOUR OPERATIONS ARE ONE THING.
I WE HAVE LEARNED, IT'S ALSO ABOUT WHO YOU ARE AFFILIATED
WITH. THAT IS WHY DOMINOES CONTINUE
TO FALL IN THE WAKE OF FTX. HOW HAS THIS ALTERED YOUR
THINKING ABOUT WHO YOU WANT TO WORK WITH? JEREMY:
WELL, IT'S A GOOD QUESTION. CIRCLE DOES NOT OPERATE AN
EXCHANGE OR DERIVATIVES PLATFORM.
WE ARE NOT A PRIME BROKERAGE FIRM.
SOME OF THE QUESTION MARKET STRUCTURES THAT ARE
FUNDAMENTALLY RISK TAKING BUSINESSES, THAT IS NOT OUR
BUSINESS. WE SERVICE THOUSANDS OF
COMPANIES, CORPORATIONS, INSTITUTIONS, THINK —
FINTECHS AND OTHERS THAT WHEN A DIALTONE ON THE INTERNET.
WE PROVIDE THAT SERVICE TO THEM.

WE ARE CONTINUING TO EXPAND THE
NUMBER OF COMPANIES, THE DIVERSITY OF INDUSTRIES THAT WE
WORK WITH. IN THE SHORT TO MEDIUM-TERM,
THERE WILL BE PLAYERS IN OUR INDUSTRY THAT EITHER GO OUT OF
BUSINESS OR REDUCE THE AMOUNT OF ACTIVITY THEY HAVE.
WE ARE IN FOR THE LONG HAUL. WE FOUNDED THE COMPANY NINE
YEARS AGO. I TESTIFIED TO THE SENATE NINE
YEARS AGO ON THE IMPORTANCE OF REGULATION.
I THINK WE ARE CONTINUING TO BUILD THIS. MATT:
YOU HAVE BEEN NAMED TO THE HIGH-LEVEL ADVISOR GROUP FOR
THE IMF. YOU WORK WITH COMPANIES, DCG
FOR EXAMPLE, YOU HAVE A PARTNERSHIP WITH THE UMBRELLA
GROUP UNDER WHICH GENESIS FALLS. THEY HAVE BEEN HIT BY THE
FALLOUT. DOES THAT GIVE YOU PAUSE?
JEREMY: ABSOLUTELY. I THINK WE HAD A PRODUCT
OFFERING CALLED CIRCLE YIELD WHICH RELIED ON GENESIS.
AS THINGS BECAME CHALLENGING AFTER THE TERRA LUNA
ENVIRONMENT, WE OFFER CUSTOMERS THE ABILITY TO REDEEM THEIR
DEPOSITS EARLY.

THE OVERWHELMING MAJORITY DID.
AS RECENTLY AS THIS LAST WEEK WE ONLY HAD ABOUT $2.6 MILLION
OF OVER COLLATERALIZED LENDING, WHICH HAS BEEN ENTIRELY CLOSED
OUT. WE DON'T HAVE ANY EXPOSURE ON
THAT. CERTAINLY THAT IS A DELICATE
REAL-TIME SITUATION EVERYONE IS WATCHING CLOSELY. MATT:
HAS YOUR DUE DILIGENCE CHANGED WHEN YOU LOOK INTO COMPANIES
WITH WHOM YOU FORM PARTNERSHIPS? WHEN YOU LOOK INTO COUNTERPARTY
RISK, DO YOU INCREASE YOUR DUE DILIGENCE? JEREMY: I THINK SO.

THE FIRST IS WE OPERATE WITH A
BROAD RISK MANAGEMENT FRAMEWORK, ENTERPRISE RISK
MANAGEMENT FRAMEWORK AND REGULATORS.
WE RUN THE COMPANY WELL. IT'S AN ENVIRONMENT WHERE DUE
DILIGENCE IS GOING TO EVOLVE. ONE OF THE THINGS WE HAVE SAID
AND OFFERED IS THAT WE WOULD LIKE TO SEE MORE AND MORE OF
THE TREASURY AND ACTIVITIES OF FIRMS ON CHAIN. YOU HAVE GREATER ABILITY TO
VERIFY BALANCE SHEETS, TO VERIFY CREDIT, TO VERIFY WHERE
FUNDS ARE. WE ARE TRYING TO MOVE TO THIS
MORE MODERNIZED SYSTEM OF BLOCKCHAIN-BASED FINANCE WHERE
PEOPLE HAVE THESE OPAQUE, CLOSED OFF SYSTEMS, YOU DON'T
HAVE AS MUCH VISIBILITY. THE PROCESS IS TO CREATE
GREATER TRANSPARENCY. WE ARE CONTINUING TO BUILD
TOWARDS THAT INFRASTRUCTURE AND THE DILIGENCE MODEL AS WELL.
KAILEY: YOU MENTIONED REGULATION A FEW
TIME. YOU HAD A PIECE OUT OF MARKET
WATCH TODAY TALKING ABOUT HOW SOME CRITICS IN THIS EPISODE
HAVE CONTENDED BASICALLY IF YOU REGULATE AND LEGISLATE IT WILL
LEGITIMIZE THE INDUSTRY AND YOU SHOULD NOT DO THAT.
YOU SAY THAT IS CYNICAL AND WRONG AND THE CONSEQUENCES OF
INACTION ARE SEVERE AND THE BENEFITS OF RUGGED TORY CLARITY
ARE IMMENSE.

— REGULATORY CLARITY ARE
IMMENSE. WHAT WOULD YOU TACKLE FIRST
QUESTION MARK JEREMY: THE MESSAGE IN MY LETTER TO
LEADERSHIP IN CONGRESS RECENTLY AND REITERATED IN THIS PIECE IN
MARKET WATCH IS START WITH THE LOW HANGING FRUIT, STABLECOINS.
PAYMENT STABLECOINS ARE UNDERSTANDABLE.
THEY ARE A FOUNDATIONAL BUILDING BLOCK OF THIS ENTIRE
INNOVATION. IT IS SOMETHING I THINK
EVERYONE CAN GET THEIR HEAD WRAPPED AROUND.
IT IS A VERY IMPORTANT PLACE TO START.
IT IS A PLACE WHERE THERE STILL EXISTS VERY SIGNIFICANT RISK.
OFFSHORE DOLLAR STABLECOINS POSE A RISK.
AS CONGRESS CALLED FOR OVER A YEAR AGO, URGENT ACTION IS
NEEDED. IF ANYTHING, THE EVENTS OF THIS
SPRING AND THIS FALL HAVE DEMONSTRATED THAT EVEN GREATER
URGENCY. KAILEY: CIRCLE CEO JEREMY ALLAIRE,
THANK YOU SO MUCH FOR JOINING US. REALLY APPRECIATE YOUR TIME.
FOR MORE CRYPTO CONTENT — WORDS ARE HARD — THE PODCAST
DIVES DEEPER INTO THE DAILY MARKET BUZZ FOR HOW THIS ASSET
CLASS IS CHANGING THE WAY WE LIVE.

LOOK FOR THAT EVERY WEEK
WHEREVER YOU GET YOUR PODCASTS. THIS IS BLOOMBERG. ♪ KAILEY:
THIS IS "BLOOMBERG CRYPTO." NOW TO SOME STORIES THAT CAUGHT
OUR ATTENTION. THE LATEST CRYPTO MYSTERY.
NOBODY IS SURE WHO OWNS THE EXCHANGE MOBI. ACCORDING TO PEOPLE FAMILIAR,
JUSTIN SUN SPENT ABOUT $1 BILLION TO ACQUIRE 60% OF
SHAREHOLDERS BUT KEPT HIS NAME OUT OF THE DEAL TO AVOID
SCRUTINY FROM CHINA. SUN HAS REPEATEDLY DENIED
INVOLVEMENT. MATT: IT COMES TO TRADING STRATEGY,
MORE INSPIRATION FROM VEGAS THEN WALL STREET.
THE FORMER ALAMEDA CO-CEO REVEALED HOW MUCH HE APPLIED
WHAT HE LEARNED OF THE CARD TABLES TO THE CRYPTO MARKET.
HE SAID ALAMEDA EMPLOYED VEGAS LIKE RISKY BETS.
HE SAT DOWN IN AUGUST WITH — SAID IN AUGUST THAT IS AT THE
CENTER OF THE FTX BLOWOUT. KAILEY:
NOT EVEN CELEBRITIES ARE IMMUNE TO THE FALLOUT.
TOM BRADY AND STEPH CURRY ARE AMONG THE BIG NAMES A TEXAS
REGULATOR IS INVESTIGATING OVER SECURITIES LAWS VIOLATIONS TIED
TO THE PROMOTIONS OF FTX. THE BOARD SAYS IT IS LOOKING AT
PAYMENTS HE RECEIVED TO ENDORSE FTX U.S. COME ALONG WITH WHAT
DISCLOSURES WERE MADE AND HOW ACCESSIBLE THEY WERE TO RETAIL
INVESTORS.

FULL DISCLOSURE FROM A SPORTS
PERSPECTIVE, I'M A BRONCOS FAN, NOT A BRADY FAN, BUT A LOT OF
PEOPLE TRUST WHAT HE SAYS. IF YOU'RE PROMOTING A PRODUCT
AND YOU ARE TOM BRADY, YOU MAY HAVE INFLUENCE.
THAT IS SOMETHING REGULATORS ARE LOOKING INTO.
THE SEC LOOKING INTO THAT FIND KIM KARDASHIAN GOT FOR
PROMOTING CRYPTO. MATT: HE WILL SURELY FIGHT AGAINST
THIS, AS WILL STEPH CURRY. THEY MAY NOT HAVE HAD THE
HIGH-LEVEL UNDERSTANDING OR HAVE DONE THE DUE DILIGENCE A
LOT OF THE COUNTERPARTIES AND CRYPTO HAVE NOT DONE EITHER.
KAILEY: THAT IS SOMETHING WE HAVE COME
TO LEARN. THANK YOU SO MUCH FOR JOINING
US ON BLOOMBERG CRYPTO.

WE WILL BE BACK NEXT WEDNESDAY
AT 1:00 P.M. EASTERN TIME SO MAKE SURE TO
JOIN US. THIS IS BLOOMBERG..

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