Public Key Podcast

Building Trust and Governance in the Crypto Industry: Podcast Ep. 69

August 15, 2023 | by Chainalysis Team

Episode 69 of the Public Key podcast is here! 2022 was a rough year for crypto, and we have been spending most of 2023 recovering. Michael Patterson, Chief Compliance Officer of Genesis Trading, discusses how we can bring trust and governance into the crypto ecosystem in order to move forward successfully. 

You can listen or subscribe now on Spotify, Apple, or Audible. Keep reading for a full preview of episode 69.

Public Key Episode 69: The pursuit of trust and governance in cryptocurrency

Satoshi Nakamoto’s vision laid out in the Bitcoin Whitepaper was for an electronic payment system based on cryptographic proof instead of trust.

In today’s episode, Ian Andrews, CMO at Chainalysis, speaks to Michael Patterson, Chief Compliance Officer of Genesis, to discuss if now is the time to introduce trust back into the crypto industry after a challenging 18 months.

Michael makes the case for trust and strong governance in crypto and emphasizes why crypto businesses should leverage functions that have been successful in traditional finance like KYC, AML, and robust cybersecurity measures.

He also highlights the challenges of balancing innovation with regulatory requirements, and the importance of striking the right balance between privacy and anonymity, while acknowledging the necessary growing pains the DeFi industry will go through in order to achieve greater resiliency and trust.

Quote of the episode

“I spent a lot of time helping major firms deal with significant matters from regulators that were holding them to a very high standard and much of it was Anti-Money Laundering (AML) and, you know, they felt that they were being held to a very high standard” – Michael Patterson (Chief Compliance Officer, Genesis)

Minute-by-minute episode breakdown

  • (2:25) – Introduction of Michael Patterson and the discussion of the role of compliance officers
  • (8:35) – Reflection on the challenges and opportunities in the crypto industry
  • (13:45) – The need for trust and good governance in the crypto and blockchain industry
  • (16:37) – Balancing privacy and KYC requirements in crypto 
  • (19:12) – The implications of securities vs. commodities classification in crypto
  • (24:02) – Comparing the standards applied to crypto and traditional finance 
  • (27:05) – The potential for DeFi to attract institutional money and improve trust
  • (29:05) – The future of trust in the crypto ecosystem

Related resources

Check out more resources provided by Chainalysis that perfectly complement this episode of the Public Key.

Speakers on today’s episode

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Transcript

Ian:

Hey everyone. Welcome to another episode of Public Key. Today I’m joined by Michael Patterson, chief compliance officer. Michael, welcome to the show.

Michael:

Hey, it’s great to be here. Thanks for having me on.

Ian:

I’m going to start with maybe the toughest question we’ll get to all day. Why do compliance folks have a reputation as being the people that tell everyone, no? You’re a nice guy, I’ve met quite a few of your peers across the industry, and I feel like you’re the ones keeping us all from getting into unreasonable trouble. So maybe talk a little bit about what do you actually do in your role at Genesis Trading, and why is that so important for the industry to get right?

Michael:

Yeah. Well, let’s start with the point about being the no guy or the no gal. If we’re doing our jobs, well, we have a program in place such that all of the issues can be worked out as well as they can be in advance. And the tough ones then come to me. And usually the tough ones are the ones where I have to say, “Well, let’s figure out what we can do. Let’s figure out what we should do. And then if I can’t think of something that works, then the answer is no.”

In fact, one of the most important things I do is provide some stability and provide some restraint and say no when it’s necessary. And I often look back over the week or the month or go back over my team and say, “Where have we pushed back? Where have we been that critical challenge and where have we said no?” And not that I like to say no, but I like to have a few great examples of where we stopped something that needed to be stopped. So if I’m doing my job, I’m not just saying, no. Your audience doesn’t see me here. I’m looking across my trading floor, I’m keeping them out of trouble. I’m keeping my sales and trading people out of trouble by having the right nos at the right time.

Ian:

I sense too that a big part of the compliance discipline is about problem solving. Because on one hand you have a rules framework that comes from regulators, and on the other hand, you have business interests. And hopefully most of the time those things are well aligned, but in some cases, you’re living out on the edge or the horizon of innovative new products or services or routes to market. And the regulation almost by definition trails, the innovation by months, years in some cases.

Michael:

Regulatory lag, as we call it, calling it in my many years in different hats I’ve been calling it regulatory lag and I understand it, but you have two thoughts there. One is about problem solving and the other is about innovation. And it’s funny when you said problem solving, I think it’s often we’re getting into fact finding. I want to start with fact finding. I want to understand the situation. I want to understand all sides of the situation. I want to look at it through different lenses, but I want to come down to facts. Very often when matters come up to me, we’re dealing with that no situation. We’re dealing with emotions. And one of the things I try to do is slow down the process, get to the facts, and I’d like to believe that reasonable people, if they look at the same facts, they’ll come to the same conclusion.

Now, we all have different motivations. Somebody can be motivated by a commission, somebody can be motivated by a fee, but I also have to look at the firm’s interests, the customers, the clients, the counterparties interests in the long term. So I’m starting with fact finding and understanding the situation and then coming up with the right answer. Now, maybe that’s problem solving, but to me, problem solving starts with fact finding. And then the other thing you mentioned is innovation, especially in this industry. And you know I come from traditional finance. I come from dealing with the largest banks, but in crypto, we’re dealing with incredible innovation.

I’m dealing with a lot of young people who are very aggressive, and the innovators right now are crunching up against the traditional norms. The innovators are crunching up against people like me and the chief risk officer and others in governance, and the innovators are crunching up against the regulators. And that’s a lot of what we’re reading about the paper now. But yeah, a lot of it’s problem solving, a lot of it’s fact finding, and then a lot of it is just working with the innovators to come up to, “Well, how are we going to innovate?” But I have to do it within the norms of what’s going to work long term in this ecosystem.

Ian:

Yeah, it’s absolutely the challenge we’ll get into today. I want to step back though, because I think your background is so interesting here. I would guess if we polled a number of our listeners and said, “In the range of risk taking to risk averse, where does your average compliance person fall?” You would probably be on the risk averse side, would be the general sense. But your own experience here, two decades at EY, 12 years, or sorry, two decades at Arthur Anderson, 12 years at EY, and in the last year and a half, you jumped into the crypto industry. What led you to pursue this angle after such a long and successful career building compliance functions across the traditional finance world? What attracted you to crypto?

Michael:

So I am a more risk averse person. I’m a more risk management person. That’s been-

Ian:

Yeah, our fictional poll guess correctly. Good to know.

Michael:

Yes, absolutely. That’s in my DNA. And I’ve been working on, I’ll say risk management, maybe not so much risk aversion, but risk management for most of my career, even when I was an accountant, an auditor many, many years ago. But directly to your question, what pulled me into this is I retired from leading a risk management compliance practice for many years, and then I started spending more time talking to my youngest son who is like an economics blockchain major, graduating from USC that is, he is a crypto heavily blockchain guy.

And as father son talked a lot about a process. I got really interested in it and I said, “Hey, look, this is the next step of my career, the next step of my life, what am I going to do with it?” So what I wanted to do is to take everything I knew about risk management, all of my history, building compliance programs in traditional finance because that’s what I’ve been doing, and bring that into the crypto firm. And then I met people in the industry that said, “Yeah, this is a need. This is a need.” And that’s what actually brought me into Genesis a little over a year ago.

Ian:

It’s amazing timing. When I joined Chainalysis, it was a little before you jumped into Genesis, so I was January of ’21. My first year in the industry, things were up only. And I think my big takeaway as I reflected at the end of that first year was, “Wow, I’ve arrived at this place that seems almost certain to have massive long-term impact on the way finance works around the world,” and incredibly exciting. And I think I was maybe not as focused or aware of some of the things that were going on in the industry that obviously unfolded throughout 2022. And so maybe I ended last year a little more measured perspective on the challenges that lie ahead, but still convinced there’s quite a bit of opportunity out there. I’m kind of curious, a year into your experience, where do you sit reflecting back on the last year in the crypto industry?

Michael:

So I’ve been through a number of major crises. I remember the dot-com crisis. I was in one of my jobs. I was at Merrill Lynch for three years and right through the financial crisis of 2009. I mean, I remember working Saturday night, the Lehman weekend when everything was falling apart. I wasn’t sure what was going to happen in the financial services industry. I wasn’t sure what was going to happen to the American global economy. So I’ve seen UPS and UPS and UPS only to have a down again. And what I find is really interesting, if you go even further back in financial history, is that the financial services industry and governments and regulators learned from this, we learned from the Great Depression, which brought us the Securities Act of 1933 and ’34 and all of the Commodity Exchange Act, all of these major improvements that helped the resiliency of the financial services system.

And then coming out of the crisis of 2009, we had Dodd-Frank and different people in different sides of politics will argue that, but we still had some major improvements. And I’ll tell you, when I started with EY and focused on compliance management and building up the compliance risk services, myself and my colleagues have spent so many hours working with the major banks, building greater resiliency and compliance, building better compliance functions, and others built better capital management functions, better liquidity functions, better governance. So if you look at 2009 through where we’re at in banking and other areas of financial services, there’ve been tremendous improvements in resiliency in governance. And I think that’s going to happen in the crypto area. I think the struggles we’ve been having is an emerging growth industry that’s going through the stress of adaptation. And that adaptation will include bringing in many more, I’ll say, traditional practices that will help crypto, that will help the whole infrastructure of the whole ecosystem. Does that make sense, Ian? Tell me.

Ian:

It does. I mean, it’s great to point out that kind of cyclical nature of the financial services world is not localized to crypto, but has been going on forever. And I feel like perhaps I’m curious on your perspective, did the industry short circuit some of the things that we learned, skip over them from the ’08 financial crisis or the previous periods of failure of the systems? Because I think a lot of people point at the original rise of crypto, it kind of came out of the ashes of ’08. That was the Bitcoin whitepaper in ’09. So I pick up, there’s a kind of underlying pervasive sense of, “Oh, we’re rebuilding this because the current system doesn’t work well enough. We’re going to fix all the problems.” But it seems apparent from where we sit today that we obviously haven’t solved every problem.

Michael:

That’s right? Well, let-

Ian:

We’ve missed some things, right?

Michael:

Yeah, I think maybe we did skip over a few things. I think let’s take what’s good in innovative in crypto, I think there… And the markets will decide this over the years, the markets will decide this. Is blockchain beneficial? Is crypto beneficial? But it’s going to be beneficial it’s also going to have to work within a framework that’s also been successful over years. Now, success is not perfect, but it’s an ongoing pursuit. But there are certain things that crypto must do, I’ll say, in order for the industry to grow to its full potential. And many of the innovators in crypto are young people, which is great, and they haven’t seen the crises the way others have. The Economist had a great article last week that touched on generational change, and we need the younger people because they’re innovative, they’re risk-takers. They will create, they will destroy something and create again.

And then we also need the older generations that have this accumulated knowledge, this cumulative experience that can help balance that. And if we just had the older people like me, economies would ossify, we would grind to a halt because there’d be no creativity, there’d be no innovation. But if we just had innovation without some level of control in risk management, then you have blowups. So I think it’s getting that balance is what we may be learning through this process. And maybe we did skip over a few things and maybe now it’s time to catch up.

Ian:

Yep. What do you think if you evaluate the industry and said, and could wave a wand and make three changes or lay out a framework and we could get a large group of people on board with it, what would be the things that you would call out that we need to bring into crypto to recover from the lows of 2022?

Michael:

I think it’s all about bringing trust into the system. Now, trust is different regulators, different groups have different phrases. I think the Fed banking regulators often call it safety and soundness. Securities regulations will call about suitability, but I think there are some basic practices that definitely apply here, and this is what I’m working on. One of them is just good corporate governance, which is good critical challenge so that disinterested parties have an opportunity internally to challenge a new idea, challenge a new product, challenge a new way of doing something so that there’s good debate, a good board that challenges management, good risk committees internally that challenge management. I think that’s one element. Then the other elements, what’s very important to this industry is good anti-money laundering practices. And starting with, and this is probably the hottest thing, it’s the most boring thing, but it’s the hottest thing.

It’s a good KYC program. And I will tell you, the more people I speak with around the industry that are important to the industry, the more we’re talking about solid KYC, who are our customers and do we have the right customers? And I’ll argue that that’s a global issue. Nobody is exempt from that. There’s no free pass on knowing your customer. And then the other hot issue I think is very strong cybersecurity. I mean, this is a data intensive, technology intensive, innovative area. It’s moving quickly, but it can’t outpace a good cybersecurity program. It can’t outpace good audits of the code to make sure that market participants can trust the protocols or trust the technology that you have internally. So I think strong cybersecurity is also very important.

Ian:

One of the founding premises, or at least it gets talked about this way because I obviously wasn’t really in the crypto industry when things first got off the ground, was this idea of unlimited access, decentralization, anyone can access the network and move digital assets anywhere in the world, very low or zero fees. That was the founding premise and built into that was no gatekeepers. And so how do you square the need for KYC with that founding ethos of crypto? It feels like they might be a little bit incompatible. What are your thoughts?

Michael:

Well, I think there’s a balance, right?

Ian:

Yeah.

Michael:

There’s going to have to be a balance. They’re not a zero-sum game game. It’s not binary. I am all for greater access, especially in, I’ll just say underserved communities and under banked parts of the world, in areas where citizens and corporations need greater access to move funds quickly at a lower cost. I think that’s the promise of crypto. It’s one of the promises of DeFi. But there’s this other extreme that is complete open access and in a sophisticated, a reasonably sound ecosystem that can’t work because it’ll be a haven for those that are being locked out elsewhere. If I have a jurisdiction that says anything goes here, who’s going to show up? So I think it’s important that we strike a proper balance between greater access and I think that’s very much available, but also having the right screens on the front end to make sure I have reasonable participants who are part of the system.

Ian:

We’ve recently had some guests on the podcast who operate in the privacy technology area, notably the CEO of the Iron Fish Foundation. And we got into a very interesting discussion about the delineation between anonymity and privacy. And I think the nature of the public ledgers that power most of the cryptocurrencies we’re using today, it has skewed this conversation in an unusual way. And so I draw it back to this analogy. If you and I were in line at a shop the corner bodega in Manhattan, and I tap my credit card, that transaction is not anonymous. The storekeeper has some information they’ve collected to do inventory management and cash management. The point of sale system has some information, probably running a fraud check and validating the cards legitimate. The merchant network like Visa or MasterCard, they’re looking at the transaction for a variety of things.

The issuing bank is then debiting my checking account or charging my credit card balance. There’s at least four or five parties that I can think of off the top of my head that are participants in that transaction and have full knowledge of it. But then everybody else who’s in the store waiting in line behind us and shopping, they don’t know our entire history of every transaction we’ve ever made just because they happen to be standing next to us when we checked out and they don’t know anything about our bank account balances. They don’t.

And when you now shift into the world of a ledger technology like Bitcoin or Ethereum, suddenly you do have that ability. If you know one transaction and the owner of that wallet, you can get every transaction they’ve ever made forever and all their counterparties. And so I think that’s led us into this weird corner of like, well, I can’t possibly let anyone associate my real world identity to my wallet because then I’m giving up all this information that generally it’s been accepted as private. And so I think there’s a wave of technology coming that starts to solve this. And the thing I wonder is if we can actually enable a guarantee of privacy in the sense that it exists today in most healthcare and financial transactions. Does that get us over this hump of anti-KYC sentiment?

Michael:

Well, we have-

Ian:

I’m willing to give you my identity if I know that I’m not giving it to the whole world.

Michael:

Well, we’ve been doing that for years, for decades. There are privacy regulations as well as KYC regulations, and people are entitled to their privacy. But in society, we’re not entitled to pure anonymity because we choosing to live in society and we want society to work well. And you gave the example of the bodega, the one I’m thinking about is driving down the highway. Everybody knows I’m driving down the highway if I’m driving at 55, 65 or 75, if I’m driving 85 or 95, I’ll let the police know who I am. They will figure out who I am. So I have the right to be private and not know who’s sitting in the whatever car I’m driving.

But I don’t have the right, if I’m using the public highway where there are other people on it and other people at risk, if I’m not behaving properly, I don’t have the right to peer anonymity. So I do think we have to strike this balance. Look, this is an innovative industry with wallets and crypto and different technologies but we still have the privacy laws. I still have GDPR. I still have the California rules. I still have other rules that are going to be be coming. So we’re going to have to strike the balance on that, and we’re going to look for technology to help us do that.

Ian:

Yeah, one of the big topics the last few weeks in crypto has been on this delineation of which tokens might be securities and which are commodities. And setting that aside, because I don’t think the two of us will be able to figure out the answer to this question on the podcast, I’m more interested in how you think about as a compliance officer, the implications for one or the other direction being, becoming the rule in the land. And what does that mean as you build the business, the customers you interact with, the systems and controls that you have to put in place? I imagine it’s quite a bit different depending on how that landscape ultimately plays out.

Michael:

At the industry level. My advice to others would be to have good tests that their legal counsel helps them with to delineate between what a coin is and what a token is, what it isn’t.

And I think if a firm has a rigorous review process, I work with that and I work with what the output is of the rigorous review process. I’m not a lawyer. I don’t go through the Howey tests and I’m not in the middle of the SEC’s litigation. They have a point of view and others have a point of view view. But our job as compliance officers to make sure that we have a good thorough assessment that’s being done by qualified professionals and that it looks like we’re doing the right job, and that’s what I tell others to do. But as this industry innovates, this is one of the crunches that we’re seeing the news from last week with the SEC and their litigation. This is the hard growing pains of an industry that’s innovated and guidance will be helpful, but with short of clearer guidance, maybe that’ll come out later on. We’re working through good processes to make our own good decisions.

Ian:

Do you think that the crypto industry is being held to a higher standard than traditional finance? And I ask this in the framing of it. It’s hard for me to think about one of the big global banks that hasn’t in the last two decades run into an issue where they had a customer that was using the platform for something like money laundering or some other illicit funds transmission, and they didn’t catch it. Or for whatever reason, they end up paying a fine. And eventually everybody moves on and it’s sort of like, “Hey, you shouldn’t do that. You need to be better in the future.” And I’m obviously making a little bit light of the-

Michael:

Sure, sure, sure.

Ian:

… situations. But it seems like in crypto where similar thing occurs, you have bad actors abusing a say, an exchange platform or somebody is running some sort of fraud. The narrative is not, “Oh, this entity is bad, it’s crypto is bad, and therefore crypto shouldn’t exist.” That feels like we’re maybe overreached by people that are taking that position. What do you think?

Michael:

Let’s separate the questions. You have two great points in there. First is the question, is crypto being held to a higher standard than traditional finance? And then we can get to the points about the narrative, about the reputation, and make sure I remember both of them by the way.

Ian:

I’ll bring you back to the second one for sure.

Michael:

Yeah right. Very, very good. Very good. I spent many years working with major banks, and if I’m at a major bank, it’s because they’re having major challenges with their supervisor. So I spent a lot of time helping major firms deal with significant matters from regulators that were holding them to a very high standard, and much of it was anti-money laundering. And what that was a big deal. I spent a lot of time, I put three kids through college on that type of work. So they felt that they were being held to a very high standard. And quite frankly, they’re still being held to a high standard. And I think that’s good for the financial services ecosystem. So I think the stress or the focus on crypto regulation, we may not always like the way it’s working out, but I don’t think it’s a higher standard or a more critical or a more harsh standard than what traditional finances faced, then let’s talk about the reputation or the secondary noise.

I remember the early days of when derivatives became popular. I don’t remember which decade this was, maybe the early ’80s, but derivatives were a bad thing. And that’s because people didn’t understand them and they were innovative and they were new in traditional finance. I remember in the rap was against derivatives many years ago, and now it’s just a standard important part of society, of the ecosystem. And then I remember hedge funds, hedge funds were… What’s a hedge funds? What are they doing? And now hedge funds are standard part of our financial services ecosystem. So I think anything that is new and innovative, especially when there’s volatility, is going to have a bad rap, and people just have to learn. People will learn more about it. Now, crypto is particularly difficult because even when I have to explain to somebody in my family, what’s a cryptocurrency? It’s a 10-minute explanation, and I’m trying to keep it simple, but I think it’s that little bit of that newness, the fear of something that’s complex, and then it’s magnified by some elements of the press, say it over and over again.

Ian:

My kids like to tell people that their dad works in imaginary money, which may be both the best and the worst explanation of cryptocurrency ever.

Michael:

Yeah.

Ian:

I’m curious, how does your job differ from when you were building these compliance programs for traditional banks to being in the cryptocurrency industry? Does the nature of the technology itself change the scope of the work? Does it make it easier or harder in any particular way?

Michael:

Great. Yeah, I’ll answer that two ways. I’ll say 70% of it is the same because I’m dealing with the compliance program and I’m using all the similar elements, but the harder part, maybe they have a 30% is me learning crypto, slow down, walk me through decentralized finance, slow down, walk me through what the coin committee does. So I think it forces people like me to learn more quickly. And it goes back to one of your opening points now that’s to slow down and understand the facts. How does this work and what’s taking place here? So the nature of my job is very similar, but with an entirely new innovation and technology. And also then of course, dealing with great volatility. I started here the day that Terra Luna melted down, and I wasn’t really expecting that to happen. So in one lens, maybe I’m very unlucky, but in another lens, and this is the way I’m looking at it, I’m actually very lucky because I’m in the middle of a year where people really needed my help, and I found that I can really contribute. And people listen.

Ian:

That’s amazingly a positive perspective. Everyone-

Michael:

It took me a while to get that-

Ian:

… [inaudible 00:30:45] that out.

Michael:

It took me… That didn’t come to me right away.

Ian:

It’s also really interesting to hear you say 70% of what you’re doing is probably very similar to what you were doing in previous roles. And I guess it strikes me that in the world of a trading firm or a centralized exchange, like those aren’t worlds apart from the organizations that exist in traditional finance, a big bank, a brokerage house, a trading desk, they have similar kind of functions and inputs and outputs. When you think about DeFi, and I say this without, I can’t think of a single compliance officer that works at a DeFi protocol or a foundation or a DAO supporting that structure. I’m curious is do you see compliance in DeFi as being mutually exclusive or incompatible fundamentally?

Michael:

Not incompatible in the early… I’ll say it’s in the early stages of their evolution. DeFi has the potential to be one of the great use cases of blockchain technology. There is tremendous potential there, but I’ll argue not to its extreme. And not that I just have a protocol that’s just operating on its own because many people are using the protocol.

Many significant sums of money get invested or get worked through the protocol. So it has to be such that it’s safe and sound to work with. So are they knowing their customers, back to my point from a few minutes ago, are they doing the appropriate cybersecurity checks? Are they auditing their code? Are they in a jurisdiction where I know where to go to if I have a claim? I think that there are some basic tenants that can be brought to DeFi, and I’ll say, I’ll suggest this, and this may be controversial. If DeFi doesn’t do this, it’ll remain on the fringes. If DeFi adopts the right practices, it’ll grow along with the ecosystem. And the promise of this new innovation will really be very powerful. But it has some things to do in order to achieve such power. That’s why that’s my thinking on it.

Ian:

Yeah, it’s it. There’s this interesting bootstrapping moment that we may be in here right now. And when I think about the world of DeFi and how it relates to traditional finance, there was a moment pre Terra Luna collapse where we were all trying to puzzle about a, when will TradFi institutional money come into this space? And it felt like beginning of 2022, we were kind of on the cusp of that. You could see everybody was talking about it, and they were exploring potential to get there. I think some of that is pulled back, or at least is hesitating on-

Michael:

Of course.

Ian:

… the brink as the market has gone through some of its challenges. But I think the real catalyst, and maybe this launches us into the next great crypto market expansion bull run, is the shift you’re talking about where DeFi becomes safe for TradFi institutional money, which is such a large pool of capital. If that enters, it sort of changes the game entirely.

Michael:

Ian, say that over and over again. I mean, just do the crocheting and knit it and put it in a frame and put it behind your desk and sell that at the next Links conference. I don’t know. You’re reminding me of a discussion I had decades ago with a gentleman, a good friend of mine, who was at one of the major hedge funds, but it was still the early days of hedge funds, and it was one of my first projects at EY. And he said, “Come on in, and we need policies and procedures for…” I forget what area, but he started to need some basic infrastructure. And I was shocked, “Howard, you’re always pushing against us. You’re always too cheap, too fast too…” And he said, “My institutional investors are demanding this.”

And to me, that light went on. And that was a turning point for governance and control in hedge funds because it was the institutional investors that were demanding governance, risk control, and compliance. If they were going to put X millions, 10s of millions of dollars or pension money into these funds, they had to believe that there was security, safety and soundness. And the comment you just made, I think, just reminded me of that discussion many years ago. And I think it’s a very similar evolution, very similar pattern.

Ian:

Well, it’s going to be exciting to see that happen. I think there’s a number of folks involved with DeFi protocols that are trying to drive in that direction, and it’ll be a great outcome if we can get there.

Michael:

I would welcome it. I think it’d be fantastic, and I think it’ll be the next great innovation in this sector.

Ian:

I’m curious, as we wrap up, when you think about the next year, you’ve just come through year one, what’s on your mind for year two? What are things that are drawing your attention and your focus or that you’re anticipating and excited about as you look to what’s coming up in the next 12 months?

Michael:

I think it’s really, seeing the one we just talked about is probably the number one item. I just need to focus on continual evolution of the function, continual diligence on getting to a safe and sound and secure function. And there’s no end to this. There’s no stopping point where you say, “Okay, we’re done, we’re well controlled.” It’s almost like what Thomas Jefferson wrote into the Declaration of Independence. He didn’t say, “You’re entitled to happiness as a right.” It’s the pursuit of happiness. And it’s a constant pursuit of building functions, building control, such that people can trust the system.

Now, as soon as we do that, there’ll be a new customer segment, a new product, a new geography. Something will change and we’ll find some gap that we need to close, and we will continue on that pursuit. But to me, what’s most important for the next year is to continue to the pursuit of a strong compliance program, but maybe even more important, building trust in the system. So our role is to build trust in the system, and that’s actually your firm that has the role of building trust in the system. And we think that’s very important. So maybe the headline here is trust in the system.

Ian:

I love it. The pursuit of trust in cryptocurrency. We’ve coined a new tagline right here on the show.

Michael:

We have to get something like yellow paper and write it in handwriting.

Ian:

That’s right.

Michael:

Send it to the-

Ian:

That’s right.

Michael:

… Congress.

Ian:

That’s right. Michael, this has been fantastic. Really enjoyed the conversation. Thanks for joining us today.

Michael:

I really appreciate you having me on. Thank you, Ian.

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