Sazmining Podcast Episode 28: Jason Urban on Institutional Mining

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Synopsis:

On this episode of The Sazmining Podcast, Will speaks with Jason Urban, Co-Head of Galaxy Digital Trading. They discuss institutional mining, the burgeoning ecosystem around supporting miners, and more.

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Will Szamosszegi (00:40):

Well, Jason, thanks for taking the time to come onto the podcast today.

Jason Urban (00:46):

Thanks for having me. This is great.

Will Szamosszegi (00:48):

I've actually had the, the pleasure of knowing you for a few years. Now. I know that you previously had been at Drawbridge lending and you've been making some big moves in the industry. So how about we just start by having you talk a little bit about your background, your journey into crypto, and then how that all led to what you're doing today at galaxy digital?

Jason Urban (01:09):

Absolutely. So like a lot of people in the space on the finance side, I started in trading. I spent about a decade at Goldman, ultimately running the index volatility market, making flow business there. So think VIX versus variance and listed options and, and things of that nature left there in oh nine to go start effectively the same business over at, at DRW, which you would know in the space as the Cumberland guys, but DWS the parent and was, was there till, you know, late 17, early 18, at which time I, I found a Drawbridge lending, which is a specialty finance, uh, business inside of, of crypto. So thinking about structured products and, and interesting ways of bringing traditional, you know, financial, you know, tools to the, to the crypto space. And then that company was ultimately acquired by galaxy digital. And I came over here as the co-head of trading.

Jason Urban (02:03):

How I got into crypto is kind of an interesting story, obviously at D RW, you know, having Cumberland and, and Cumberland being one of the, the first OTC desks in the space. I was at a dinner with traders, you know, 10 traders going out, grab, you know, a dinner one evening. And I was, I was having a conversation and the guy across the table from me who was the founder of Cumberland, was talking to someone and said, Hey, I just bought 200,000 E for a quarter. Now, when you're at a dinner with traders and somebody says, I bought 200,000 of anything, I, I said, I said, what, what, what did you buy? I stopped my conversation said, Hey, what did you buy? And he's like, I bought 200,000 ether. And I said, are you a dentist? Like what, what do you mean eat there? And he said, Ethereum, and that was kind of my, you know, that was my first foray in.

Jason Urban (02:48):

And, and, and initially like a lot of people, I think in traditional finance, I was skeptical. And, you know, I was like, well, you know, what is this thing? And as I kind of started to learn about it, my, my opinions changed. I mean, one of the big things was I think, and I, and I'm a little bit older, but when, when the internet first became a big thing and I was like, who's gonna buy their clothes on, on Amazon. And now I show up every day in front of my house, there's 15 boxes and, you know, things of that nature. And so I, I said, I wasn't gonna make the same mistake twice and started to learn about crypto. And as I, as I learned about, you know, more than just, Hey, it's, it's more than just Bitcoin. Um, although Bitcoin's an important part of it, you know, I kind of jumped in with, with both feet. And that was when I started Drawbridge with some partners. And, uh, and I've been going, going hard at it ever since.

Will Szamosszegi (03:34):

I hope that you, uh, jumped on the bandwagon soon after you heard that he had bought 200, uh, <laugh> 2000 E

Jason Urban (03:41):

<laugh> for, for a quarter. Um, I, not, not to that extent, unfortunately, but, uh, but yes, shortly thereafter I was, you know, starting to dabble.

Will Szamosszegi (03:51):

Yeah, that's great. Well, I remember one of the things that, that at least I I've noticed in the space is how it's matured so quickly. And one of those moments that I, I think really stands out, I haven't had the chance to tell you this was when I heard about your company and what you guys were offering. And, and that was really when I saw, wow, there are more institutional players coming into this industry. They're gonna provide more opportunities for other companies, uh, such as mining companies that are gonna operate, want to really have that industrial grade operation that institutions feel comfortable investing in. So with that said, could you talk a little bit about the product suite that you initially started and what that vision was at Drawbridge and how that's evolved over time to what you're currently working on today?

Jason Urban (04:40):

Yeah, absolutely. You know, so, so the product suite at, at Drawbridge started with a very simple, what we call now, a collar loan where effectively we're taking an asset and we, what we wanted to offer our clients was an opportunity to borrow money. And, and you have to remember in the early days of crypto, people were, were charging 20, 25, 30 5% to borrow cash against crypto. And that scene, that didn't seem right to me. Like it just understanding the asset. The biggest issue was the volatility of the asset. And so coming from a traditional space, I said, how do you eliminate the volatility, or at least mute the volatility, still giving the clients some upside, but also allowing them to borrow money at a, at a very low or very reasonable interest rate. And so what we started off doing was effectively buying a put at the price at the LTV.

Jason Urban (05:30):

So if Bitcoin was trading, you know, go back in a, in a world, Bitcoin was trading at $10,000. Client wanted to borrow $7,000. We would lend them the $7,000 and we would buy the 7,000 put and then we would find a call that produced enough income that we would sell, and that income would pay, buy the interest rate down on the cash, as well as pay for the put and what ultimately that meant was the client had a non-recourse loan unlike, you know, and it was, there was no margin calls. And it also meant that the interest rate was zero. Now the, the, the negative or the downside is, is that you have this call that kind of captures your upside, but if you're a minor or if you're somebody that's going to sell, anyway, this is a way to smooth your cash flows because, you know, people would say, well, I, I hedge, I, I don't hedge cause I don't hold coin.

Jason Urban (06:18):

But if you sell coin every day, you're effectively just selling at the market. And so by timing this, it allowed our clients to have a better control over, better control over, over their cash flows. And it's a tool that it's used by farmers for their crops, for oil drillers, for oil. And so we kind of felt like, like, this is just a natural extension. This is the same product used in a different asset class. And in doing that, we spent a lot of time working with galaxy among, among others. But, you know, I think that Mike and the team here quickly realized that this was part of what they were building and what we are building here at galaxy. And, and maybe it's helpful to kind of talk a little bit about, you know, galaxy when we talk about products and where we're going with this.

Jason Urban (06:58):

But, you know, we're trying to be a, a, a full suite financial services company in the space for institutional investors, for institutional participants. And to that extent we have, we have five business units that, that service that segment. So we have the trading business, which is the business that I co-run, and that's everything from borrowing lending, spot execution, derivatives on chain, staking, things of that nature. We have the asset management business, which is something that people see a lot of. We have a partnership with CI and, and other partnerships that are going to be announced soon, where we have funds and clients, institutional clients can, can buy those funds. We have an advisory business that helps raise money and helps with M and a activity in the space we're dealing with. We're trying, trying to, you know, help these companies and clients with capital formation and, and, and really telling the story because we do believe in it.

Jason Urban (07:52):

We have a principle investments team, which works very closely with everything inside of the crypto space and tangential to the crypto space. And then the last piece is the mining piece where we actually have miners. Then we offer mining services or services to miners in the sense of whether it's financing or, or other ancillary things. So the, the company as a whole is, is smack Deb in, in the E you know, the crypto ecosystem. And we're doing everything we can to, to build it to, you know, we're one of the few places that puts their money, where their mouth is so to speak. Our balance sheet is primarily crypto. And so from that standpoint, that gives us a tremendous competitive advantage, not only in, in what we do for ourselves, but also what we do for our clients, because we bring that to their, to their benefit as well.

Jason Urban (08:38):

And as one of the, you know, the second largest publicly traded company in the space, we give traditional institutional investors that comfort of a transparent balance sheet and the ability to at least look through and say, okay, what is actually there? Because I think so much with crypto is, you know, there, you know, you don't have the right to anonymity, but you have the right to privacy, but there is, there is a layer of anonymity for a lot of firms when they look at like, well, how much crypto do you have? Where is it? You know? And so as people get comfortable with that, you know, or until they get comfortable with that, us having a transparent parent balance sheet is, is very advantageous to them.

Will Szamosszegi (09:16):

Yeah. I, I can agree more. And one of the things that just personally I I'm very curious about is how you think that this is going to evolve. And I think that you personally have a very unique background to this because you did spend so much time in the more traditional world of finance. I'm 10 years at Goldman. It's a long time. Not very few people have that experience as well as the experience in crypto and then building a company in this space. So, um, the way that you see it today, how do you think that this is going to evolve moving forward? And what do you think that this industry is gonna end up looking? Like,

Jason Urban (09:54):

I think that blockchain is going to do to finance what the internet did to retail. It's going to drastically revolutionize the way business is done and it's business is done in financial services. The blockchain is such a great technology. It it's so innovative. And there's so many ways that you can go as we start to see layer twos, building on ones and layer, threes on twos and, and things of that nature. You know, if you think about what we have here, you know, and we talk about it often here at the firm is that, you know, a layer, one is the iPhone. You know, the layer two is maybe the app store, and then all these apps are getting built on it. So if you're looking for, for parallels and people like to kind of think that way, that's a good way to kind of think about where this is going.

Jason Urban (10:41):

And so, as we look, as we kind of dive into the space, I think it's going to everything that we're doing in traditional finance is done better in inside of the crypto universe and, and everything from how you clear and settle trades to, you know, how you track information, who you permission, where there's so many advantages that crypto solves. And, and each of these blockchain solves a different portion of that inside of the, the whole universe. And so, as we, as we think about this, or as I think about this, and I think about where we're going, everything that we do today from, if you go to a bank to down to how you invest, how you buy stocks, how you, you know, people, everything is on this phone, right? I mean, all these people, you know, on, on the planet, the unbanked can all now be banked here.

Jason Urban (11:30):

And everyone that, that currently has a bank can still use this. And so, you know, as we kind of, as we kind of push forward, I think that everything that you see, or every problem that exists inside of finance and financial services and, and, and things of that nature, anywhere that, that commerce takes place can be solved here. And so it's only a matter of time as people become more educated, become more comfortable and they start to understand, wow, this really isn't scary. This is actually pretty neat. And it's no different than when we first got the internet and you had to dialed on modem. And now, now look at it, you know, there's 5g everywhere. You know, the world is at your fingertips.

Will Szamosszegi (12:09):

Yeah. I, I'm pretty sure that if you, if you spoke with someone 50 years ago and tried to explain how the world looks today, they would, they, they would look at you. Like, you're pretty crazy, but it's just, it, it's the exponential nature of technology. It seems like. And, uh, taking that and applying it to, uh, this industry, I think you're really seeing that begin to ramp up. So just, just taking a step back and looking at how you guys work with minors and walking through a scenario, for example, you guys have a lot of flexibility. It seems like in terms of where you're putting those puts and calls and designing a customized solution. But if we're just to walk through an example of how you guys would work with a minor, obviously minors are minting new Bitcoin, and they have to pay their electricity bills. They have working capital costs. If I'm a minor and I come to you and I say, Hey, look, I want to make the most outta my treasury. Uh, and I am, I have this type of outlook. I have a bullish outlook on Bitcoin. How would you work with that minor to help them get a solution that is tailored to their needs and, and helps them really maximize their treasury and pay their electricity bills and keep exposure to Bitcoin.

Jason Urban (13:27):

Yeah, I, I, I think that that's an important thing to, to discuss with, with respect to the mining space. I think one of the things, when you think about, if you're a Bitcoin minor, you obviously believe in the asset. The goal I think, is for people to have as much of that asset as possible, and keep as much of that as, as they, as they can. The other, the other side of the equation is you're also operating a business and operating a business means you have cash flow needs in other currencies, no different than multinational firms who might buy goods in China, but sell them in the us and they have to hedge their currency exposure that way. Um, and you also have to be thoughtful about risk management, because if you're going to raise more money or if you're going to be in it for the long haul, because it is a volatile asset, you have to think about how do you wanna hedge and how do you wanna mitigate risk?

Jason Urban (14:16):

And so generally what we'll do is a, a client will come to us and they'll ask us for a variety of different solutions, everything from lending against the equipment, which has certain, there, there are always certain issues that you have to solve there or lending against coin that they've currently mined. Uh, and then when you talk about lending or liquidating on a regular basis, you know, and then when you talk, but when you talk about lending and you talk about, there are really two loans that we'll offer, there's a few more varieties, but effectively you have what I'll call a margin loan. So, and that's, that looks like what you see a lot in the space. Client will come in and say, here's a hundred Bitcoin. Let's, you know, let me borrow 70 Bitcoin worth of dollars. So on a 70 LTV, that, that that's pretty standard.

Jason Urban (15:05):

The issue that you run into with that is when the market sells off, you have to either post more coin because you, you have to get your LTV right. Or liquidate some of the coin to get your balance. Correct. And what that really has the effect of doing is forcing the minor to sell the lows, right? Because that's like, that's where they're, that's where they're re liquidating. So, but it also leaves the upside completely untapped. The other side is, is the, the collar loan where a client will come in and say, all right, I wanna borrow, borrow that same 70 Bitcoin. And I'll lend that to them. And the interest rate is going to be structured to whatever rate they want, say zero. Cause that's what most clients choose. We'll lend you the money at zero, advance it to you at zero. And we turn around and we buy a put at the, at the 70% strike.

Jason Urban (15:54):

And then we sell a corresponding call. What that means is if the market sells off the client, the loan is nonrecourse. The client never has to sell more Bitcoin. The put is there as the insurance policy. And so they get to, you know, keep the money, used the money and not be forced to sell more coin. Conversely, if the market rallies, when it rallies to a point where we've sold that call, they get all the income from today to that strike. And let's just say, in this case, we're talking about a $10,000 Bitcoin price. You know, what we'll do is we'll buy the 7,000 put and sell the 13,000 call. So the client gets everything from 10,000 to 13,000, but then above 13,000, they've now foregone the profit. The exchange is they took the money and theoretically bought more equipment or paid bills, or did a number of different things.

Jason Urban (16:43):

And they had protection to the downside. So as we kind of think through a lot of clients choose a blend of both, and they say, I want some upside and I want the margin called, or I, I want some protection and I want a little bit of both. And they understand that. Okay, well, if it goes from 10,000 to 13,000 in two months, I'd probably sell some up there anyway. Um, you know, very rarely do we, you know, we do have clients that are full blown believers, and they're saying I'm never selling another Bitcoin. I don't care. I will hold it till the end of end of time. And that's a different risk profile. So, so that's kind of how that process works in terms of what we'll do with minors and how we'll work with them on the, on the cash needs side. In addition to, you know, a number of other services that we provide out of our mining division, as well as out of our trading division.

Will Szamosszegi (17:30):

Yeah. That's one of the things that I think is, is very important. And I really like about the structures because a lot of times you're holding the asset. You can go and you can access capital, like, or you can access be liquid access cash, and post your Bitcoin is collateral, but you're always worried about the margin call and worried about that downside and in such a volatile market. So I think that that type of structure allows you to not have to worry about that downside and you're able to, to sleep at night. So to say, don't have to go and check the charts, uh, whenever you see things starting to crash. And then for that peace of mind, your upside is capped based on whatever LTV you're taking, that, that cash in that. So I think that that moving forward is gonna be something that is a lot more important for minors who are trying to have a treasury management risk management strategy.

Jason Urban (18:19):

I couldn't agree more with you, you know, and, and the big thing that you have to think about is right now, you know, the mining space there, there's, there's some I'll call it slush, right? Like the, the profitability is pretty good and there's, you can have a little slippage and not negatively impact your, your corporate outlook. There is going to be a time when those margins collapse, you know, hash becomes, you know, difficulty increases things of that nature. And you're really gonna need to be focused on risk management. And it's going to be the operators in the space who take that, that step forward and use prudent risk management that are going to survive those wicked turns and be in a much better place, as opposed to the ones that, that, you know, kind of say, well, I'm gonna ride the, I'm gonna ride the lightning and, and see what happens. And I mean, we've all lived through some wicked pullbacks. I mean, we've seen massive expansion, but we've lived through some, you know, those days in, you know, March a year and a half ago, and things were cut in half. I mean, it was, it happens may of this year. Things were, you know, down effectively cut in half that does happen. And that does change your outlook as a business.

Will Szamosszegi (19:27):

One of the things that, uh, I wanna make sure we touch on is actually not directly crypto related, but just general markets. Uh, right now it seems like we're in a crazy scenario where you have a tremendous amount of money printing going on. You're seeing valuations in the markets that just seem really unheard of if you had looked at just some of the events that have taken place on a macro scale the past couple of years, and look at where we are today, it's kind of hard to wrap your head around everything. So just from the traditional sense, I mean, what's your view on everything? Like, how are you looking at this? Uh, what do you think, what do you think is happening here? And, uh, what do you think that path is moving forward?

Jason Urban (20:08):

I, I think policy makers, whether it's it's political or whether it's, you know, the federal reserve, they're kind of in a trick box right now, because with the level, with the absolute level of debt, if they raise interest rates to cool things off, as we see inflation starting to really become meaningful. Now, whether you want to call it transitory or not, inflation is here, food prices are higher. Gas prices are higher. Every lumber look at lumber at the beginning of the year. Now, granted there were other, you know, some other issues there, but you look at prices of things and they're higher. There is inflation. And with the level of debt that we have every quarter of a point that the fed raises rates, well, that means we have to pay that like, so where does that money come from? You can't raise rates to, you know, you're handcuffed a little bit.

Jason Urban (20:54):

And so now it becomes the issue of, well, how much do we raise rates versus printing money and so on and so forth. Even if we do raise rates, we have to service that debt. Then know now the service payment goes higher. I read somewhere and I don't know, you know, I didn't verify this, but that the, the interest paid on the national debt in 2000 is actually higher than the interest that we currently pay because of the actual level of, of interest rates. And so as you kind of look through that, there's money printing and it's going to continue to be a nice tailwind for crypto. I think that we all need to be thoughtful and disassociate the speculative nature of things versus the utility nature of things and, and the asset class nature of things. But the reality is it is a tailwind for our, for our business.

Jason Urban (21:38):

And it's a tailwind for the, you know, the whole crypto ecosystem, because it's just going to make it easier for this innovation to happen more quickly. And, and adoption will ultimately, you know, take hold. And, and I think that, that, that that's really a, you know, we're finally seeing with the client flow, that we have real people. And I say, not that the people, not that you and I doing this for the last five years, weren't real people, but I, you know, when a hedge fund or a pension fund or a, you know, a large endowment shows up and wants to transact they're transacting differently than, than how people would normally do it traditionally in crypto. I think if you think about crypto it's historically been 80 20, and every market in the world is 80 20. The difference is crypto is 80% retail, 20% institutional. That pendulum is swinging to be more like every other traditional market where it's 80% institutional, 20% retail. Now, does it ever go to full 80 20? Maybe not. I don't know how, how quickly, but it's certainly moving towards 50 50. And that's an again, another tailwind, another thing that you can look at and say, you know, the long term story is, is, is very positive for, for the asset class.

Will Szamosszegi (22:49):

It's interesting hearing you talk through it because I remember leading up to that liquidity crisis in March of 2020, there, there was all this talk in the crypto. I don't know what you even call it, but just the discussion in crypto with people saying the narrative that has really started to take hold, following the liquidity crisis with this entire stimulus going and, and money printing and money flowing out of the traditional centralized financial system. So to say, and into the, the crypto universe, the decentralized financial system, and really capturing that type of narrative, it's been interesting to see that evolve over time in terms of where it is today and what you're seeing on the, on the client basis are when you're speaking with these endowments and everyone else, are you getting a general sense of how they're looking at the space or how it's changed? Is there any, any type of difference today than just just a handful of years ago?

Jason Urban (23:45):

Absolutely. And the biggest difference was it's always about risk and the risk, the risk used to be crypto could be a career killer, right? If I invest in, in crypto and then something happens, you know, I'm screwed now, it's, it's a career killer. The other way, if I don't get in and everybody else does now I'm screwed. And so it's that FOMO on that side and, and, and adoption is adoption is different. I mean, that's one of the things that, you know, here at galaxy that, that we do well is educate, educate, you know, traditional clients, educate people to, to doing that, you know, understanding and being comfortable with it. You know, the question we get questions and it's the full, the full gamut it's from, you know, people who are, you know, as new and as green as you can be to, to people who are understanding minute differences and, and, and really, you know, that, and our job, our job as a firm.

Jason Urban (24:40):

And, and I think we do this very well is to, to basically be that tour guide all along the way. You know, we see clients who first come in and they'll buy a little bit of Bitcoin and then, you know, maybe it takes them, let's just use a number a year to get there. Then it takes six months to go from Bitcoin to E and then once it's eighth, now I'm getting fielding calls. Like I really want to get into this defi protocol, or what do you think about, you know, this, you know, this layer one and this, you know, like you start to kind of, you know, the game is changing and, and it's really because people it's, the space has been de-risked from a, an asset class perspective, but it's also been, the risk is now not doing anything that that's where people start to say, well, geez, if everybody else does it, you know, my boss or whomever I have to answer to is gonna say, well, why didn't you buy some of that?

Jason Urban (25:27):

<laugh>, you know, so we're definitely, we're definitely seeing that. And it's our job, you know, like, you know, at galaxy, that's why we, we do what we do. We create those outlets for people to get in connecting to all the exchanges, doing all the, you know, understanding the custodial landscape and, and how best to, to navigate through that, as well as the legal reg landscape. I mean, that's the other thing, there's not a lot of the one thing I think that holds us back now is lack of regulatory clarity. If we get that, I think you're gonna see, you know, the floodgate will open just needing to know what the set of rules are and, and not knowing what the defined rule is, makes it difficult for, you know, people to sit there and say, I'm gonna put, you know, I'll put a billion in. They say, eh, it might put, you know, 10 million in 20 million in, but I'm not gonna make a major allocation. We get some rules. I think you'll start to see some big, some big allocations.

Will Szamosszegi (26:18):

Yeah. That's, that's another big piece where you look at what what's happening in China and what just happened to the mine. Or some China, you can have extreme ramifications, uh, if you allocate capital and, and then some sort of legislation changes, or they provide additional clarity on something that could threaten the business. I mean, granted, when you're a, a policymaker and you're trying to regulate such a new industry can be very difficult. You wanna make sure that you're doing it safely and doing it in a way where you're achieving the goals that you set out to accomplish. But from your perspective, what I'm wondering is what are some of the things that, that from a policy maker perspective, let's say that you have their year right now, or you're speaking to one, what are some of the areas that you think are very important to provide additional clarity on and, and things that would really help move the industry forward in the us and help innovation rather than just hindering growth unnecessarily?

Jason Urban (27:19):

Well, you know, I, I think we saw it play out a little bit with the infrastructure bill. There are so many areas that we need some definition and trying to take a set of laws and rules that were written a hundred years ago, you know, with the 33 act, the 34 act and trying to apply them in a space that technologically is so different. We need to have real thoughtfulness around it. And we can't, we can't operate from a place of fear because we don't wanna up, you know, overturn the apple cart, but actually operate from a place of innovation. And as you think through what that, that, that means is failure to act from a place of innovation means you're just gonna force all that innovation offshore people. Aren't gonna stop innovating people. Aren't gonna stop thinking like, oh, the government says, I shouldn't think about how to be better.

Jason Urban (28:06):

So I guess I'm not gonna do it. Like that's not gonna happen. It's just not gonna happen here. And that's one of the things that that's, that's made the United States such a great place is that innovation does happen here. And so if we don't embrace, if we don't embrace rules and regs, that, that reward innovation, well, we're gonna have an issue. I think that, you know, some specific things, you know, I mean, thing that I deal with all the time is this a security? Is this not a security? And how do you handle it if it's not, if it is a security versus, you know, not, is it a commodity, the, how we test it, it has some advantages, cuz it does give at least some framework, but there's also a lot of areas where it doesn't really take it to the level it needs to.

Jason Urban (28:44):

And so that's some, that's a conversation that we have here and take very seriously at galaxy. And it's one of quite frankly, one of our advantages to our clients is that we take a very thoughtful stance to all these assets and say, all right, you can trade this here or you can trade this there. Or if you wanna trade this, this is the legal way to do it. Not just the hold, your finger in the air and, and hope. And, and if you're a real traditional institutional player, you wanna know like what, what should you do? And that's kind of where we come in and say, you should do this. So I think on, on that front definitely regulation and what, and what is available to, you know, to the space, you know, the policy makers need to basically get their act together. That's really what it comes down to.

Will Szamosszegi (29:27):

I'm not gonna lie. I was very disappointed when I saw the, uh, infrastructure Bill's language and then the amendment not passing to change that. And actually recently came out with an article on point Telegraph, giving an analysis from a minor's perspective, cuz right now the way that it's written, I mean, effectuates, the transfer of digital assets seems overly broad and, and pretty ambiguous. And I think that that's, that's one piece where I think it's very important to have people and policy makers who are out there speaking about it and understanding the technology that they're voting on. I mean, I saw, uh, this photo of this guy carrying the entire infrastructure bill, like with his, with his two arms out here. And it was just this stack of paper. And I'm thinking there is no way that a single person who's voting on this bill has read the entire thing, cause that would just take so long to do.

Will Szamosszegi (30:19):

And even if they did and tried to spend all day every day working, like let's say a hundred hour weeks, try and understand the things that they're voting on and read the entire thing. They still wouldn't have the capability to do so. So as you mentioned, just taking these things that these frameworks and things that were from so long ago in the 1930s or whenever it was in applying it to the fast exponential nature of technology just seems like something that is not gonna work. And so it's gonna be interesting to see how, how this all plays out and, and what actually ends up happening.

Jason Urban (30:53):

I I'm, I'm hopeful that we're gonna, we are, we will figure it out. Um, but we still also have to be, you know, cautious and it's, it's incumbent on all of us in the industry to, to one educate, to embrace, to try to help shape people's thoughts around it. Cryptocurrency isn't this thing used for money laundering and human trafficking. It solves exponentially more problems. And yes, there's a bad use case over here, but that's not what defines it. It's defined by all this good, not these one or two bad things that people think it is.

Will Szamosszegi (31:26):

Yeah, definitely. And as you mentioned that I'm very glad that that narrative has thankfully begun to disappear. The whole thing that it's only used by, you know, for money laundering and, and illegal activities. I remember, uh, this was actually a number of years ago is when it was in the much earlier days. Uh, when you, you didn't really have the institutional activity that you had today, this was before March of 2020. I was speaking with, uh, I, I was at lunch with this one Senator and, and a governor. I will not say the state right now, but I was trying to explain to them the importance of Bitcoin and how this technology's gonna change the future. And one of the first questions that they asked was, well, how do you stop it from being used for legal activities? Isn't that what it's used largely for thankfully I had the chance to go and explain the, the whole situation around it and kind of debunk that right in front of them.

Will Szamosszegi (32:21):

But it's one of those things where these are busy people. They don't have time to go and understand the technology. They're just reading maybe a handful of headlines and doing like a few hours of internet research and with all the information out there and so much, uh, misinformation surrounding that industry at the time, it's just, it's something that we're past that hurdle. But now it seems like we're onto another hurdle, uh, where we have to have these types of discussions around it and really talk about smart regulation. I mean, as you mentioned, we don't wanna push all that innovation offshores and miss out on the revolutionary technology akin to the internet. I mean, that would just be like snatching defeat from the jaws of victory when you're sitting in the place of the United States.

Jason Urban (33:05):

Yeah. You're, you're AB and, and, and financial evolution has happened everywhere, you know, and you, and you see it, you know, going back to the Dutch where the, the primary, you know, banking center and they didn't embrace regulation and that moved offshore to England and then England became the banking superpower. And then ultimately that moved to the United States and it's innovation. That's the driver of that. It's not, you know, when you get, when you try to become, when you play the game, not to lose, you inevitably lose. Right. And so that's the, you know, the, the goal for all of us here is to keep this with us onshore.

Will Szamosszegi (33:41):

Yeah, definitely. Well, I've got one more question, but before I ask it, is there any place that anyone listening, let's say that they're a minor, an institution, someone who's running a company in the space and they've heard what you guys can offer and think that it would make sense for their business to help it grow and scale, where should they go and try and connect with you or the company to learn more and, and speak more about it?

Jason Urban (34:06):

Our website galaxy digital.io is always a, a, a great place to go. Obviously can reach out to me@jasondoturbanatgalaxydigital.io, um, and more than happy to, to direct people to the, the appropriate resources inside the firm now at the end of the day. But I, I think it's, you know, incumbent on anybody to, in the, in the space to help, to help educate, because I think that you can attest to this. We've all been, we, we all are very collegial when it comes to this, right? Like there are things that I say, well, I don't do that, but, you know, go talk to so and so, or such and such. So I think that, you know, when you reach out, you'll find the best actors and your reputation does follow you. So we try to, we try to take that very seriously here as well.

Will Szamosszegi (34:47):

Yeah, that's great. Well, last question, uh, and you can approach it however you want. Uh, what is the one belief that you hold to be true that the majority of people would disagree with you on that could be crypto related? Obviously it could be industry related.

Jason Urban (35:05):

I think one of the things that's important and it's, it's treated me well throughout my career is to, to be thoughtful about your beliefs and to be willing to challenge them and, and reevaluate what they are. You know, I would say one area where, where I have flip flopped in, in recent times is the concept of Ts. And, and I know that's a new, the new thing, and there's people that say it's a bubble, some people, you know, and, and, and there are aspects of it that look a little frosty, uh, but when you step back and you look at it, and I was having a conversation actually down at Bitcoin, Miami with somebody, and my comment was, you know, listen, I think NFTs are like, you know, digital baseball cards, you know, I mean, they're just not gonna be in your mom's basement. They're gonna be on a hard drive that you find in a drawer 50 years later and say, oh, look at what I bought.

Jason Urban (35:50):

You know, I, it, the point was is that the, the counter argument to that was, this is a way to, to, to monitor and monetize every form of information, medical records will become NFTs. And, and to the extent that it is art and, and it is media, those images will be, will, will be there forever. So at some point it's a way, one for the creator to own a piece of it to a piece forever. And it's also a way for the investor to transact. There are points of this, that, yes, the technology today isn't necessarily there for that, but it will be there. And it definitely changed my view where I went from, uh, it's a digital baseball card and, you know, oh, I got my, you know, my Roger crem, Clemmens rookie here, you know, to saying, wow, you're right. You know what? This is going to change the way everything is done. So I think that's one area where having a, an open mind and asking questions can get you to, you know, to look at things through a different lens. Great. Well, thanks again for coming on. Really appreciate it. Thanks for having me. It was, it was really a pleasure to be here.

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