The Last Trade E059: Multi-Jurisdiction Custody with Tetra Trust CEO, Didier Lavallée

Brian Cubellis (00:00.204) All right. Yeah, Logan, if you let us know and then we'll just rip it, I can kind of kick it off. Where we're rolling already. perfect. Awesome. Well, welcome back, everybody. It's a little bit of a early week podcast before the big Nashville conference. We're joined by Didier Lavelle, CEO of Tetra Trust, which we're excited to talk about some really interesting things we're doing with them, but also his background and what Tetra Trust is doing in Canada, which is pretty exciting. Didi and I connected back in consensus and for building in this industry for a while, I had no idea kind of Canadian status from Canada status from custody, the regulatory environment and how much it sought after across the globe, frankly, for assets and security. So Didi, welcome to the podcast. Thanks guys. I appreciate you having Awesome. Well, I figured in part of the notes, we maybe just start with your background. think what I've historically seen in this space, it's really fascinating is some of the best builders, if not the best builders, come from a traditional professional background, whether it's like big tech, I think of Mike Belshi and Google, or your background at UBS and the Royal Bank of Canada. And just curious kind of like how your journey there and how you got there and then went to Bitcoin and ultimately founding and building Tetra. Super fascinating. think it you know, really shed a lot of light on what we're doing here. Yeah, absolutely. you know, when you look at, at the background, I, you know, I would probably qualify myself as a, you know, call it a stock market junkie to start, if I may use that terminology, always very curious, always very interested in companies. My father was an entrepreneur and really the stock market gave me the opportunity to, you know, evaluate companies after companies. So I started in equity research, did that for a little bit of time and then eventually went to work at UBS across essentially Canada and then eventually to RBC for where I spent about a decade. I was focused on equities for about 12 years. really equity research, equity trading, equity sales on the institutional side. You know, one of Brian Cubellis (02:19.726) piece that was always interesting for me specifically on the institutional sell side was to spend time with leaders of businesses. know, CEOs and CFOs through road shows learn about their business, learn what investors thought was relevant and important. You know, I had a little bit of an event at 35. I had my daughter, she was born in and I looked at, you know, all the skill set that I had accumulating. being on an equity desk and I basically said it's time for a And RBC gave me this great opportunity to essentially, you know, pivot into another piece of their business. And I moved into, you know, essentially asset servicing and treasury management, moved from equities to foreign exchange, essentially managed foreign exchange trading desks, learned, you know, kind of the trading business, the first line at the fence, capital and risk management, the P &L management, etc. really quickly. Then, my career really started accelerating from there. I was given an opportunity to essentially build an automated foreign exchange execution system and to help with that rollout, build a team, which was fantastic experience. And then my last role before Tetra was essentially head of Canadian custody product where RBC had about $4Tn. in assets. You know, when you think about the transition between TradFi to digital assets, I mean, for me, it came with a little bit of frustration of, you know, being supposedly a change agent within a large organization, but having very little capacity to actually change anything. More specifically, you know, if you look at, you know, technology that's 50 or 60 years That is basically what the banking systems are built on today. You know, the lack of capacity to integrate with, you know, just basic things like API. People take for granted that the banking system works really well, but when you look under the hood, it's a bunch of manual steps and really, really old systems. So having the opportunity to build essentially on blockchain technology, you know, modernize financial infrastructure. Brian Cubellis (04:44.274) and really leave legacy infrastructure, I think for the future. And my kids are a big part of my narrative, was really excited for me and almost a no brainer in terms of opportunity. Yeah, that's fascinating. guess where in that story did Bitcoin and blockchain kind of fall in? Was it post -COVID in the 2020 or where does that insert the bug? Yeah, no, absolutely. I mean, actually, it was out of curiosity that I came across Bitcoin. I read Digital Gold, which is now appropriate in 2024, Essentially the book that Nathaniel Popper published in 2016. So I read it around the 2016 timeframe and being a public market investor just made it lot of sense to me to even put a fractional amount of, let's say, our allocation into investments into Bitcoin. at the time, living in New York, I had access to basically a Coinbase wallet. think if I remember correctly, I bought Bitcoin, Litecoin and Ethereum and just basically sat on it. I remember the reaction from some of my counterparties on the trading floors, essentially, you you're kind of nuts. Why would you do this? It's a scam, this and that. But I just really, it kind of really resonated with me, the technology, you know, the aspect of the store of value remittances and, you know, payments, you know, potential use cases. I'll be honest, it kind of sat dormant there for a long time. It wasn't until I was asked to take a look at Tetra and what I could do that I really kind of refreshed my outlook on digital assets and essentially all the possibilities that came. But it also came at a point where my frustration around financial technology was also very high. So I think it was a perfect match. Brian Cubellis (06:51.918) You know the timing the inception of me being interested in digital asset happened much earlier in my career or before Tetra I would say you know four or five years before but the match came at a point where personally I was ready for change but also you know felt incapable of delivering change you know in my current capacity at a big financial institution. That's so interesting to hear. I had a similar sort of experience of, I was working at Bain as a management consultant and in 2014, I got pulled into helping put together our perspective on digital transformation for banks, know, like our firm -wide perspective on it. And, you know, obviously it's led by the partner and then as a lower level. analyst, was putting stuff together. But the thing that quickly became off limits was you weren't allowed to recommend updating from mainframe computers. that was, know, we were developing our digital transformation playbook for banks, but you weren't allowed to suggest that you should maybe consider updating from mainframe computers because it was mission critical infrastructure that you couldn't mess with. And that was one of the points that, one of the ingredients, I think, that helped me be interested in cryptocurrency when I also read Digital Gold by Nathaniel Popper. And it's a little too bad he doesn't focus more on Bitcoin in that book because I also went down that altcoin path at that time. But it's interesting hearing similar sort of, you were aware of these data points as they became part of your professional life. about how the legacy system is not up to the challenge of a digital future. digital native infrastructure is really the way to go. And you're building that now. Yeah, no, absolutely. mean, one of the things I would maybe point out there as well is, take for granted, right? In the US, you have a JP Morgan account or Bank of America. Brian Cubellis (09:14.22) You use Zenmo to transfer value to your friends. mean, in Canada, the infrastructure is slightly different, but at the end of the day, it's a handful of massive actors that are providing banking services and then allow you to interact on various platforms. the exchange of value in Canada is done on a system called Interact that is owned by the big five banks. You know, the points of the data, I don't think I would have gotten there if I didn't work in asset servicing and treasury management. When you start, you know, looking at transferring value all over the planet and the steps involved in moving cash, you know, the different custodians, sub -custodian access to central banks. I mean, you start drawing a map of complexity that just, you know, I think would blow anybody's mind, but to be fair, most people don't really fully understand Unless you're trying to or send money, sorry, internationally to loved ones or to family members or for whatever reason, you might have not seen those issues, but those issues are real. And you see it with fractional reserves in the US. I mean, don't have to talk to you guys about this. We saw it really well in 2023 with some of the bank failures and it's happened historically a few times as well. You know, those data points just got, I would say, more intense, Jesse, as my knowledge of the financial infrastructure also got deeper and deeper. And we try to, as part of the narrative at Tetra, educate people on basic concept of financial systems, right? Not necessarily going too deep, but how money moves, you know, why it's inefficient, why blockchain technology can help, you know, the role that Bitcoin can play into So there's an education part of what we do as well that can help people understand better how risky it is currently to maintain the current financial infrastructure as it stands. Yeah, that makes a lot of sense in understanding that landscape because I think that Brian Cubellis (11:32.11) is like prerequisite almost to changing it, right? It's like if we know the existing model and how it's inefficient, and then we have this new technology, then how can you map it to like, basically fill the gap in those inefficiencies? But taking a step back, Didier, I'm curious. So you had the time at RBC and was working through building there, and then looked at Tetra founded in 2019. was that relationship with Tetra in Canada from 19 to 2022? And was there a component of just like how you referenced this idea that you had Bitcoin sitting at Coinbase dormant? I think most people globally are now are starting to realize like, wait, maybe it doesn't make sense for me to send all my Bitcoin to San Francisco. I need other solutions. And curious if that was part of Tetra's founding story or where the foundation of Tetra started and ultimately how you were pulled in in 2022 to lead the Brian Cubellis (12:29.654) Yeah. So, you know, really the Tetra inception came out of the Quadriga failure in Canada. So Quadriga CX. You know, when Quadriga happened, you really had two marketplaces in Canada to purchase and sell digital assets. It was Quadriga and it was a CoinSquare. And, you know, it highlighted the need to have proper qualified custody or third party custodian. essentially behind the crypto trading platforms and what retail users would be using. It also started a journey around educating local regulators around what a digital asset custodian framework would look like at a trust level. NYDFS was ahead of Canada, I because I think they issued their first license in 2015 to Paxos, and then Jim and I got one a few months later. But it took until July 2021 for the Canadian regulators to essentially issue a license to Tetra. So from 19 to 21, essentially, there was a lot of work that was done behind the scenes trying to educate the regulators as to why this was necessary. And then also came at a time where there was a lot of work being done by our regulators in Canada around, how do we prevent Puerto Rico from happening What kind of checks and balances do we need? know, it's obviously custody has an important part of it because the guy was basically holding the keys and disappeared with all the client's assets, right? So that's really the inception story of Tetra. It came out of a failure and essentially the necessity of having proper qualified custody in country, locally regulated. And as you know, you're probably aware, the financial system or infrastructure in Canada is, I would argue, well governed. We went through the great financial crisis relatively unscathed. We have a very conservative framework up here. There's only a handful of entities. have pretty strong capital controls. Brian Cubellis (14:50.702) So having the opportunity to create a similar framework for digital assets, I think has resonated really, really well across the globe, just because of the perceived safety that the Canadian financial infrastructure brings and the control around governance, et cetera, for its financial institutions. Brian Cubellis (15:19.51) And Didier, Marty here, jumped in late, had a call that ran quite a bit longer than expected. So sorry for being a bit tardy. But with that in mind, like what are, when you're looking to right the wrongs of Quadriga and start from ground zero building up in terms of providing the market with quality custody solutions, what are like the number one, two, and three things on the checklist that you need to be wary of? providing this type of service to the market? Is it more social governance before you even get to technical? Does it start from a technical base? What are the assurances that you guys look to provide the market to right the wrongs that were created by Quadriga? Yeah, absolutely. And by the way, nice hat. Love that Prince Street pizza. Yeah, you know, I would say you definitely have to start For us, it starts with key management and key control, right? Who has access to the keys? How are they governed and control, you know, backups, segregation of roles and responsibilities and really educating as well, Marty, across the board, right? Again, going back to, let's say day one, you start a conversation with a regulator. They have no concept of what digital assets are. And anyways, most of them, and they don't know how it's going to fit right? They have a vision of, you know, let's say equities, depositories like DTCC or, you know, CBS up in Canada, and entities that control, you know, virtual certificates for equities, but they don't have a concept, you know, digital asset, you know, key management, wallet infrastructure, etc. So it really starts Okay, what's the proper governance framework to ensure that we know where the keys are at all times? We know that there's no single individual that can leave with those keys. We understand there's proper governance and oversight. So Tetra, when it started on day one, Tetra had a board of directors, all very experienced in financial institutions, financial infrastructure. A lot of our board members have gone on and built Brian Cubellis (17:40.226) great businesses over their career to the right governance and oversight from various committees, right? We have audit committees, have governance committees, et cetera. So providing that right infrastructure. It also goes with transparency in my view, right? You know, to your point, Michael, around sending all your Bitcoin to San Francisco, I mean, we do a lot of work with a lot of platform globalese and globally and at times when start asking questions around key and key management, you will get answers like, well, we don't share our secret or here's our shock, don't worry, our auditors have reviewed our process. That's not very comforting specifically from an industry that typically would say, don't just trust, verify, right? So the transparency, the governance, I think are fundamental points. Then Marty, think what probably makes Canada a little bit different than other markets as well, is some of the capital metrics and capital requirements around running a trust structure. We have very clearly defined capital metrics, etc, that we need to meet. There's a lot of capital behind an entity to essentially, we're going to call it protect and record the assets. But there's a certain level of maturity and size that you need to have to operate in this space, which again, I think is pretty good and helps prevent the kind of failures that you might have seen in other jurisdictions just because of how the entities are positioned towards the regulators. It's fascinating because I think most people forget about Quadriga in 2018. like knowing Tetra STEM from that or the reason for its existence, would imagine you guys were okay in 2022, but there was a lot of firms that in 2022 went belly up because they didn't have that framework to build from the ground up. They were the first version. They were the Quadriga of that vintage. So it's just fascinating to see that like circle kind of go around in different markets. And I know when we tried Brian Cubellis (19:55.49) that there was regulatory bodies all over the world, frankly, reaching out to you guys trying to understand either your custody model or some of the oversight that Canada had to, you know, thinking about like whether it's UAE or some of the Caymans to have a better framework and how they should think about digital assets. I curious like how that that's gone. Yeah, I mean, I think it's it's fascinating, also humbling, right, to get to get outreach from various jurisdictions, you know, around the custodial framework, governance, you know, what I would call our terms and conditions with our primary regulators, but also how we work with, you know, the rest of the industry in governing the system, the framework. I think there's been obviously a lot of jurisdictions over the last, you two years, two and a half years that are really dug into digital assets that want to create frameworks that aren't sure where to start. You know, having a failure, I think, always helps, you know, push you forward pretty quickly. mean, you know, just look at what's happening in India in the last week or so, and I'm sure there's going to be some regulatory impact that's going to come out of that. You know, they want to hear you know, essentially from the regulatory landscape, they want to hear from the market participants. They want to understand essentially what's the barrier to entry or how high the barrier is. mean, know, at Tetra we like to think about our specific license is just, you know, not only setting the standard in the marketplace, but also, you know, almost like a little bit of a starting place, right? We're now three years in operation. There's no other entities in Canada that have been able to essentially land the license that we have, even though there's been, you know, what we're told over 12 applicants. You know, we were consistently evolving the standard. And I think one of the things that I can point to is, for example, proof of reserves. When we started, you know, in 2021, one of the requirements that we had worked with the regulator on was essentially to do a proof of reserves twice a Brian Cubellis (22:13.934) So before 2022, before FTX, before people started releasing their wallet addresses and basically validating everything that was in the vaults or on the platforms on chain, Tetra was already doing those audits. Now, as you guys are probably very familiar with, a proof of reserve isn't perfect in the very nature that it's a snapshot of the... specific point in time, right? So there's all sorts of things that can happen around that snapshot. And I think you've seen some global exchanges essentially, you know, move assets in for the proof of reserves and then out and then the activity is validated on chain and people can see that that happened. But one of the things we work on is essentially, well, how do you make that framework better, right? What's better than proof of reserves? Let's say biannually is be able to do it more frequently being able to do it at hog being able to basically You know how the regulators go on chain themselves and verify the information that we are providing Essentially given also them the tools to go and verify themselves again going back to that phrase don't trust verify and So, you know, we've been able to develop a lot of framework in Canada based on the initial requirements and then push those frameworks forward. And I think it's helped a lot of jurisdictions essentially evolve their landscape. We're actually in talks with a couple of jurisdictions where they would like Tetra to come in and basically operate as an entity, apply, educate on the framework, potentially do a key deployment locally, which is all very interesting. I think you're also going to see a lot custody in the in the very near future. It is a trend that we are starting to see. I Germany is there, UAE is there, Australia is talking about it, Singapore, Hong Kong, Japan, all jurisdictions, they're essentially talking about, you know, making sure that key ownership and key control is in country with a locally registered Brian Cubellis (24:29.518) entity and I think this is a trend that you're going to see happen more and more and it makes sense, right? If you have a failure in another jurisdiction, well, you don't want to try to go recover your assets in that jurisdiction if you're a player in another country. I mean, there's all sorts of reasons why jurisdictional risk is suboptimal from a key management perspective, from an asset recovery perspective. That's certainly one of the trends that we've seen and a lot of players have reached out or jurisdictions have reached out to basically get our sense on that front. That makes a ton of sense. mean, we talk about eliminating trusted third parties at the individual level with decentralized exchanges. But if you're a nation state that's going to wade into the waters of Bitcoin, it makes a lot of sense that you would want the keys that secure your Bitcoin held within your borders. mean, it's been beaten to a dead horse over the last two years. But you just look at what happened to Russia's Treasury assets, whether you agree with Russia's war in Ukraine or not is external to the effect of being able to freeze assets and sell them off without any repercussion on behalf of the person who owns those assets. So it makes sense. And there is one thing I wanted to circle back on as it pertains to proof of reserves, because there is this ongoing conversation about proof of reserves. Can you even do it correctly? Does it even make sense? And I do think there's like a spectrum. of a proof of reserve system from pretty poor and doesn't give you a lot of assurances to gives you way more assurances and something I've really never heard anybody talk about, but I'd be interested Didier to see if you guys think about this, but within a proof of reserve system, do you guys basically calculate coin days of the coins that have been hold? Brian Cubellis (26:29.036) held in cold storage in particular wallets and market that as proof of reserves saying like we've had a thousand Bitcoin that have been in this wallet for X amount of days because I think that's one of the big knocks on proof of reserves is that somebody who is marketing proof of reserves could easily move some Bitcoin into a wallet like a day, a week, a month before they do the proof of reserve audit and then quickly move it out after. But I think there's some metrics that could be added to proof of reserves to really solidify. the legitimacy of a company trying to do proof of reserves. And one of those metrics is coin days within the wallets that you're doing reserves for. Brian Cubellis (27:10.582) Yeah, that's a really good point. mean, CoinDays is certainly one of the data points that we are looking to do. The one thing I would say, Marty, is because we have a fair amount of crypto trading platforms on our balance, on our balances, there's a certain transactional aspect to what we hold. And what I mean by that is there's a lot of in and out, I would say on a daily basis. Additionally, if you look at the ETF, business. There's also some transactional nature obviously around subscriptions and redemptions. That means that there's in and out. So you can do a percentage basis, right? You can say, well, let's say 70%, 80%, 90%, whatever the number is, it's been there for a certain amount of time. The one thing though that we're really focused on is essentially providing the tools to the various regulators. So they can do their own oversight. So we've been working, our partner on this front is Elliptic. We've been working with various on -chain analytics tool. We have our own actually UI that people can sign on to and can they verify the information, the wallets, the addresses themselves. But ultimately what we'd like to do is to make sure that the regulators can go in at any point in time and verify the information. Because that's really the only way you can get comfort around proof of reserves in my opinion. Is don't come through me, have the tools to essentially, or through Tetra, have the tools to essentially go verify yourself whenever you feel that you need to audit the system. So we are looking to evolve from a, you know, I would say a certain periodic report that we're providing to the various regulatory bodies with data sets, like let's say, you know, the amount of days that, you know, the coins have been in the storage to essentially creating tools to allow people to validate the information themselves. And you might say, well, did they sign into your front end and you can control your front end. Okay, fair. Brian Cubellis (29:25.624) But at the end of the day, we're also educating them as to, you know, how to work with the various on -chain tools to be able to verify themselves, right? mean, anybody that understands, you know, this technology, even at a minimal level understands that the, you know, one of the value add is that you can track anything on chain. So, you know, don't use Tetris UI, you can go, you know, to a block explorer and verify yourself. So we are, we are adding data points, but also we are, we are working on creating tools that will allow people to sell verify. Yeah. And I think products fallen into that mapping to Bitcoin's protocol, I think are natural, right? Whether it's like multi -institution custody from an individual perspective, or even at the fund level, where we talked to some fiduciaries that from a fund level, the legal or the fiduciary from a moving assets, like pensions in particular, will ask for a wallet that's segregated for their assets. And while that doesn't protect them from a legal perspective, it does provide this quasi proof of reserves that their assets are sitting there, which almost operates like a quasi alarm bell, because you can imagine if you have that set up, whether it's from a private client or an institutional, from a fund perspective, if assets are moving, that shouldn't be moving. Now you're like, wait, what's going on? And if that happens enough or just once that can already send a signal versus what we had to wait for, you know, multiple years in the FTX situation. But going back to the reference point on keys and this notion of sovereigns in countries wanting to hold keys, it's kind of interesting because it maps to a lot of education that we all talk about here. think everybody here would say it's not necessarily the hardest figure out custody. It's hard to figure out custody either at size or scale or from an institutional perspective. And it would make sense as the market gets educated, they want to bring those keys in the same way that when Amazon first started, know, Amazon West housed majority, if not all of the data. And then as data privacy and all the things associated that got more prevalent and understood, you wanted to house that data in different countries, different continents. Brian Cubellis (31:45.518) I'm curious as you've seen the market get educated post 2022, what are some of the learnings that have either been prerequisites or requirements from the industry? How have you seen them get more educated in what they're requiring? An example, I guess, I think of is like the UAE and my understanding of like ADGM requiring anybody that's holding cryptographic material be a licensed custodian. That's kind of, think, probably a little too far, just given that what we know about, you know, multi -sig and the notion that single entity doesn't have unilateral control. But just curious how you think about what you've seen in the market and how the market's getting more educated in the requirements that they're asking. Brian Cubellis (32:26.806) Yeah, you know, I probably have a lot to say. I'm going to try to be concise. There's what I would qualify as Bokticking exercises, right? So, and then things that actually help you protect your clients or, you know, your assets. Now, what I mean by Bokticking exercises is, you know, third party. custody is now a requirement, would say in the majority of the markets globally that take digital assets pretty seriously. To us, some of the only markets that are really not, don't have a framework right now would include places like Australia, but they're certainly working on one. So you have to work with a third party qualified custodian and now every country has a definition of what a qualified custodian looks like. Let's take the US and Canada as an example, right? So both through the NYDFS or through, you know, various states in the US, you have the concept of, you know, being able to get trust licenses or, you know, some organizations like Anchorage have secured banking licenses. In Canada right now, there's only us and it's through a provincial trust. So the equivalent of, you know, essentially NYDFS would be the Loan and Trust Corporation Act. Now, you essentially have the box to tick when you want to become a qualified custodian. So, you you need a certain amount of capital, you need the certain kinds of audits. So financial audits, you know, you need your stock. Candid is a little bit more advanced in the NYDFS framework or there's, you know, concept like proof of reserves, penetration testing, you know, so there's added layers of, kind of audits and securities that are put forward. So that's one way to look at it. So all parties involved in the regulated framework to provide qualified custody essentially go through this exercise and say, do I have audited financials? Do I have a SOC 2 type 2? No, okay. I gotta go get a SOC 2 type 2. Do I have a board of directors? No, I gotta go get a board. And they go through that exercise and then they tick the box. Brian Cubellis (34:47.702) Now that provides some control and some governance and obviously Tetra is a called by one of those entities and we have to do all those things every year. Now there's also steps that you know the platforms can take themselves when engaging with the consumer and one of the things we've seen is you know is custody what I would call custody diversification. So essentially not just having all your assets in one custodian but essentially spreading your assets around are creating redundancy in your infrastructure. I would say that's quickly becoming best practice in Canada and we're seeing it in the US as well. There is no regulatory bodies to my knowledge right now and below believe that I've made that a point for any trading platforms. But I do believe that over time you might see requirements where you can't a hundred percent of your assets in one specific place. You need to have, let's say two or three custodians behind. So you can kind of refer to maybe like a two or three versus your key control. That being said, the assets that you have on those platforms, you are taking, you know, essentially single counterparty risk on those assets, right? So if you, let's say have 50 % at custodian A and 50 % at custodian I mean, a hundred percent of that 50 % of your assets is exposed to that, you know, single entity or single player. So, you know, the, and this is where I think it's kind of a good leeway into the conversation with, with on ramp and between on ramp and, and Tetra is essentially, you know, the capacity to spread your counterparty risk across multiple regulated entities, but that no single entity is essentially, you know, offering, you're not getting counterparty risk to no single entity. I think that's a very valuable proposition. I think this is something that you are likely to see more and more of. You know, you're really thinking about segregating your risk across various counterparties and that no single entity is responsible for, you Brian Cubellis (37:12.05) specific failures or specific risks. I think it's a novel concept. I think it makes a lot of sense. And I think it's something that we're already seeing, you know, in terms of a trend that's starting to evolve in the custodial landscape. Brian Cubellis (37:31.468) Ron, you're the closest to it. think of miners as being the most sophisticated with this concept and the best that they do it. It's the cousin of what Sailor does is literally just spread it across exchanges. And to your point, hope that one fifth or one third of their assets go away with a single custodian, which just reminds me of FDIC. It's like, wait, you know how people spread it around. It's like, that doesn't sound like a solution for protecting your Brian Cubellis (37:57.486) It was more of a question, Marty, or not question, but just thought of the notion of spreading risk at the mining level, I think, is the closest to sophisticated, but that's still the best. By nature of understanding Bitcoin, to build these facilities, but then the best that they have is literally just spread across multiple entities. Well, that, and it's also from a legal perspective, too. That's I think. Multi -institution, multi -sig, and I know sitting on the board of a Canadian mining company myself, like we have to pick specific custody providers based on whether or not they're SOC 2 compliant and their governance structures that they have in place. And so that alone limits the number of people that you can custody with least as a publicly traded company in Canada. And so I think the more multi multi -institution solutions that come to market with qualified custodians that are SOC 2 compliant and have proper audits and governance structures in place. Like it's going to make way more sense for these miners to consolidate their holdings into these multi -institution multi -sigs. And then if you want to diversify from there, maybe you go to a single provider and just maybe you have two or three different quorums of institutions controlling keys around different addresses that you control. Maybe that's the trend of what is considered diversification of treasury assets, treasury Bitcoin in the future. It goes back to what Didier was saying about if you're splitting your assets between two custodians, you currently have 100 % risk with 50 % of your stack in two different situations. But 100 % risk with that portion because you're trusting a single custodian. And Marty, think to your point, multi -institution custody is new and it's still emerging, right? We've only been working on it for a few years, but it's been possible with Bitcoin for 10 years. And as we progress Brian Cubellis (40:17.09) building out that the kind of regulatory check boxes that folks who have a board of managers have to check those boxes, then multi -institution custody is on a fast track to become a superior option to that current model of split your eggs into multiple baskets, but you're risking it all with a single custodian. You know, your 50 % is risked 100 % with a single custodian. you know, moving from that model to a fault tolerant model where, Marty, to your point, maybe you have multiple quorums where you're risking 50 % of your stack with, a 203 multi -institution, multi -sig setup, where there's fault tolerance inherently built into that. So you're not, you know, if one of those custodians goes down, you still have the ability to recover 100 % of those assets. That's just a step function better in terms of assurances to the end client that their Bitcoin will be safe for the long haul because of fault tolerance. It's not possible when you're splitting up your stack into trusting all of it, 100 % of that portion with a single person, single custodian. Yeah, mean, Jesse, you reference end clients, but I could certainly see a case where particularly in public markets, like in the best interest of shareholders, it is demanded that you put your Bitcoin in a setup like this. So that's it all takes. It's function of time until this model proves itself out and checks enough of those regulatory boxes such that there becomes, I think you're right, demand from shareholders. that that'll be a, a sea change moment where this model becomes so objectively better in terms of assurances to shareholders that it becomes demanded from the bottom up as well as, as, know, sought out from the top down from, you know, decision makers in the organization. Yeah. And this is a product of exactly that for outside of, you know, a partner group. becomes really hard to self custody the asset because Brian Cubellis (42:42.606) you're managing capital on behalf of others and the alternative was leaving it on a single custodian. We all know that Bitcoin has additional assurances and security profile. You don't necessarily have to do it. I think what Jesse said is really important that what's happening here could have been done for 10 years. It's just more of an education coupled with the need, want, the price as the price appreciates. Then naturally counterparty risk becomes greater because the amount of Bitcoin, whether an individual is leaving on entity or the entity's housing, you want to like remove yourself potentially from losing that asset or moving that asset. And the real if call it anything innovative is more of the legal framework wrapped around the the holding the agency of that key and then the requirement to move the asset. And so Didier, this kind of ties back to our conversation. It was fascinating because this relationship here was a confluence of multiple things. were having this discussion and you being so close to the industry, it's seen this tailwind of requirement of multiple custodians being, you know, participating in the custody of, you know, an entity's assets from a diversification of risk, along with what we were building with multi -institution with ourselves on -ramp coin cover and BitGo. And we've all been seeing this natural sophistication or sophisticated requirement or ask from investors of having multi -jurisdictional keys. So not only key segregated from different institutions, but also key sitting at different sovereign levels. And so part of this first initial relationship we're announcing that will come out either, I believe Tuesday of this week before the conference, which would be the 23rd when this podcast will be released, is the first multi -institution, multi -jurisdictional quorum between BICGO, Tetra and CoinCover in the UK that will come with all the assurances that we brought on with insurance and transaction protection, BitGoes qualified custody key signing, which is little known, but that key that protects the OnRent Multi -Institution Vault is the same key that participates in the two ETFs that are housed. That's offline cold storage. And then Tetra will also be participating in Brian Cubellis (44:58.926) which we're insanely excited to bring to market because we think as Jesse said it's a step function improvement on a lot of the custodial situations that have existed and Going narrow just for treasuries. We see that growing adoption You can imagine as fiduciaries or capital managers are coming in It's a step function improvement on leaving all the Bitcoin on a single Yeah, and yeah, go ahead. well, I was gonna say, no, it was very exciting. And you can see, mean, you guys are obviously partners with Big Bo. I mean, Mike, Mike Belche has been talking about it for some while. Right. I mean, they now are registered, you know, if I remember correctly, it's, you know, in Germany and in Singapore. So you can basically, you know, start having different exposure in terms of from your key management perspective. the problem, and so and knock about BitGo at all, I think you've brought it, we've talked about this, it's still a single entity exposure, right? So you can get geography exposure from different regulatory frameworks and different jurisdictions, but you still get a single entity exposure, which may or may not be sub -optimal, depending on how you're looking at it. being able to bring multiple jurisdictions, regulated frameworks to the table. you know, I think we could all argue that the UK, the US and Canada to some degree are good financial framework from a governance, you know, perspective. In addition to minimizing single counterparty risk, I think it's not only really interesting, I think it's market leading and, you know, hopefully we'll bring a lot of attention. Brian Cubellis (46:44.824) Yes, absolutely. And, you know, I think in the Bitcoin community, there's been talk for quite some time about how multi -jurisdictional multi -SIG is going to be the future. It's best in class. It's what everyone should strive for. But it hasn't been possible before now unless you set it up for yourself. Right. So, you know, a lot of the time when people have been on Bitcoin Twitter, when people talk about multi -jurisdiction, multi -SIG, what they really mean is flying to another country and setting up some sort of safe deposit box or burying it on foreign soil to have a key there and then doing that in multiple countries such that they have a multi -jurisdictional, multi -sig setup that they, self -custody setup that they've set up for themselves. But outside of that, there has not been any solution to date. where you can have multi -jurisdiction custody of your Bitcoin, short of having to fly to that country and set it up for yourself. And this product, this partnership with Tetra in conjunction with our existing partnership with BitGo and CoinCover creates that first ever product where you have a key in the US that's the BitGo key that is, as Michael pointed out, the same sort of protection and security that is used for a couple of the ETFs that are using Bicco as their custodian. That's one key. That's the US key. Then the Canadian Tetra key, and then the UK based coin cover key. And through that coordination, that partnership, you have a turnkey, best in class security, multi -jurisdictional, multi -institution, multi -sig setup. Whereas before that, been completely untenable to reach that level of excellence and completeness by doing it yourself. Brian Cubellis (48:55.502) Yeah. And maybe I would just add like a little bit of a history lesson here if I may, but part of the reason why you want multiple jurisdictional exposure or multi -jurisdictional exposure is just look at gold. Look at, you know, the gold reserve act of 1934. Look at when Roosevelt essentially for all intended purpose outlawed self -pustody of gold and, you know, required all Americans to basically putting the custody of gold with the US Fed. Now, I still know today that there's a lot of Americans that hold their gold in Canada because Canada does not have that framework. So unless you're holding it under your mattress or personally, then there is no way for you to do so with an institutional book in the US. Just take gold, replace it by Bitcoin. Now, can we say a scenario or can we see a scenario in a few years time where, you know, one specific jurisdiction government steps in basically says we are outlawing self custody of Bitcoin, all Bitcoin now needs to be custody through the local central bank for whatever reason, right? It's not that far fetched. It's actually it's happened in the past and could happen again. So minimizing your exposure, you're minimizing your exposure to a specific government, know, changes in government happen all the time. I mean, you know, in the US you're seeing hopefully or maybe a change of guard in the next little while, but that will also probably bring some change in narrative around, you know, digital assets, Bitcoin, Bitcoin support, et cetera, the government level. So being mindful of jurisdictional risk is incredibly important and quite frankly, currently not enough part in the narrative for people that are holding large amounts of digital Yeah, this has been a framework that we've talked about for a long time on this podcast and Marty since like, and I since like 2022, I think when some of these ideas were coming about, it's like nobody talked about the distribution of the keys in the same way they talk about distribution and the hash rate. And it sounds hyperbolic, what I like to say like the difference between gold and Bitcoin is effectively multi -sig for that exact reason, Didier, that you pointed Brian Cubellis (51:15.746) because I sometimes hesitate to bring it out because it sounds conspiratorial or whatever, but it's just this notion that once enough gold centralizes, it's just not a good thing for anybody. And so the notion of being able to distribute the asset is what makes this asset so redundant and resilient, and you get the transparency and all the things. And then the beauty of self -custody is you can take the delivery of it at any point as that like failsafe or alarm bell. So it's really an amazing kind of technology all around to prove assurances. I'm curious on your side, you mentioned some of the trends you've seen from, we don't have to call out a country, but just the interest in Canada's regulatory body for housing some assets from high net worths to wealth managers. How you see that coupled with also financial institutions participating in a setup like this, if you do at all, where maybe they do not step in to be, you know, build or buy custody, but they may either leverage a solution like this or hold one of the keys. have thoughts and I've seen some stuff, but just curious if you thought about it from that lens. Brian Cubellis (52:22.518) Yeah, I have. I would say it's probably safe to say that Tetra has pretty advanced conversation with lot of FIs and Canada around digital assets. So to your point, should they build, should they utilize a vehicle like Tetra? What's the framework? How do regulators think about it? We're actively in contact with the regulators, even with governments. I was in Ottawa last week talking the ministers of finance, the various government entities around digital assets, custody, why custody matters, et cetera. I can say transparently because it's public information. mean, my previous employer, they were working on a cold storage solution that essentially got shelved for various reasons. One, the operational nature of it, obviously it's relatively complex. There's none of that native expertise in house. you know, it doesn't, didn't really scale, right? Didn't really make a lot of sense. And specifically when you're looking at going beyond, let's say a single asset in terms of support and how you scale the solution, you know, where those kind of roles and responsibility and risk lies, you know, there's, would say different comments around the capacity for financial institutions to enter into I would say specifically in Canada, one of the issues that we come up against is essentially that there's no federal framework for any of these institutions to basically touch this asset class. So because of the lack of framework, FIs are more likely to, let's say, look at partnering with various entities like Tetra than essentially do this themselves. But that Brian Cubellis (54:16.866) you know, the same risk we've discussed on this podcast for the last little while, which is essentially, you know, a single entity exposure, right? when you look at, you know, a large F I, you know, they might not want to just take exposure to Tetra to hold its digital assets. They might want to essentially have the opportunity, to face multiple, you know, institutions in terms of protecting the digital assets. Now, I personally have a strong view on whether or not they're equipped to do this themselves, having worked at the largest players in the country. I would, you know, quite honestly say that I don't think they're equipped to handle this technology from a day -to -day perspective, you know, for various reasons. But, you know, I think one of the obvious ones, and we've talked about it, and Jesse talked about it as well in the inception story of why I joined Tetra. Essentially, the technology is not even there to actively monitor what's going on on chain, right? So for the lack of being able to even just plug in the systems into your current infrastructure means that you're unlikely to do it yourselves. So they're all looking to partner. They are looking, you know, for various entities that can provide some assurances and not just the traditional kind of governance framework, but also you know, assurances around minimizing single counterparty risk, minimizing jurisdictional risk, know, minimizing technology risk even to some degree, right? You know, I think it would be unlikely to see somebody that's on the multi -SIG, you know, wanting to bag, let's just say, one type of service and one type of technology. So they think about that from a risk perspective. I think they partner. I think they might look at people that can hold keys and hold assets for them, but I think they need lot of assurances and multi -jurisdictional, multi -counter party or multi -institution and multi -tech, I would say as well, are probably all very strong selling points. Brian Cubellis (56:33.142) And revenue, I think people don't recognize that every custodial solution effectively looks the same. So you can only charge so much for it. And there's a notion here where you were experiencing it, that you can actually charge for a product significant, you're not significantly but with a greater market than zero, which is effectively existed for, you know, a private client, an individual client or family office. It's kind of a race. It's this notion or thesis the market structure of digital assets is kind of grafted on the traditional market structure of compression from custody. And it's really kind of the opposite in our opinion, because when you think about it, the digital bearer asset that has so much room to appreciate, there's only 21 million, that it's the one thing you should pay for if you want to get into the future and have that asset with a price appreciation exposure. And from our experience, you've probably seen a little bit of this financial institutions hesitate to jump in because they're like, how do I make money in this asset class? And when they see our model, they're effectively like, wait, you can actually make money coupled with everything you just shared DDA. An easy example is like additional assurances. Now you can underwrite, you can provide insurance that is an omnibus underwrite it. And it's not saying, well, if everything goes away, people know that there's not enough even insurance capital to like map to mapping coin bases or assuring coin bases. Custody is, but you can change that dynamic when it's a single wallet. And you can underwrite that multiple institutions have to basically fail or effectively fail on the relationship with that. It's a different relationship to underwrite. And so now you can give greater assurances to a financial institution coupled with increased revenue and all the other things you share. And now it makes it lot more tenable for somebody to step in, which is just a, it's a very interesting thing that we kind of like stumbled on as the more the conversations we've been having with institutions globally. And it's it's not really like a foreign type of relationship either with these institutions when you consider that the interface with broker dealers and clearing houses, I could see it being a very obviously not exactly the same, but a similar setup between Bitcoin custodial partners and these institutions, whether they're hedge funds, banks, whatever it may be. Yeah, that's right. And I think just overall, mean, custody and Bitcoin has sort of been viewed as like a loss leader. Everybody's Brian Cubellis (59:02.478) been so focused on gaining market share in terms of exchange volume, because that's where people make the upfront revenue. Every time somebody makes a trade, an exchange or service gets a percentage of that, usually about 1%. And that's where they're making their money. And as a result of that, is an afterthought. It's been a commodity, as Michael said, it's been sort Everybody does it the same way. You can't really charge for it because there's no value addition. People aren't providing value in the type of custody that they include in their exchange service, typically. But with multi -institution custody, this becomes a much more value added form of custody because it really does increase the probability that you're going to effectively propagate those assets into the future, which is the whole point here. Being able to hold on to this call option. of major upside in the future if we're right about how big of a role Bitcoin can grow into in the financial landscape. warranty -backed insurances on your transactions is a big part of that model, and inheritance planning is big part of that model. These things are possible with multi -institution custody as value additions that are Not really possible with this typical exchange model of, we just throw it in a cold storage wallet, the same way that everybody else does. And, know, it's not that sexy or so let's not talk about it and let's not charge you for it. you know, I think we really are moving to it, to a different, to a future where people appreciate the, the value addition of multi -institution custody over a typical single third party custodian model. where it's kind of a black box. Brian Cubellis (01:00:57.966) I would also add quickly. you know, the partners that you select and the businesses they play in, Jesse, to your point is also, is also, you know, should be considered as a criteria. and what I really mean by that is like Tetra is a pure play test to be provided, right? Like we don't do anything else. And, and, you know, I think Michael, to your point, there's, there's currently a lot more value to be generated and, know, transactional businesses or et cetera, but we strongly believe that over time. people will want to pay a specific price to protect their assets because that is fundamental for Bitcoin. There's entities, obviously, globally that play massive roles in custody, but also land, margin, trade, clear and settle. mean, the list goes on and on. So you basically open a lot of risks to your when you're working with these providers. And something was touched upon earlier around the segregation of assets or segregation of wallets. mean, Tetsu has been segregated from day one, right? Our infrastructure has always been segregated in cold storage. There is no omnibus accounts behind what we do. None of our clients' assets are essentially sitting in an omnibus structure. And unfortunately, when you commingle services, you end up having to commingle assets as well. So while you might do some review of, let's say, a specific custodian that will tell you that your assets are segregated and that you can also transact through their system, then through the transactional business, your assets end up being commingled, whether it be for a handful of seconds or longer to clear and settle and transact. Brian Cubellis (01:02:54.146) Those should also be considerations. Again, it gets to a little bit more of a technical understanding of what really happens behind the door and how assets are positioned. you know, to the best of the client's capacity, they should consider the various institutions that custody the assets and the role they play in the ecosystem and try to purify that as much as Yeah, it's incredible because it reminds me a lot of when we used to compete with BlockFi and our loans were nominally a little bit higher, but we say risk adjusted, it's much cheaper. And it reminds me what we're talking about here. And it's kind of scary how coincidental this happens to be the week of maybe, you know, I we have about 15 minutes left talk about the conference and all the different conversations that are going on with Treasury and the US state, the US level, everything's happening globally. It's like, imagine when you start to really move, this asset gets to six figures and how are we going to do custody? Right? Like, you know, up until this, we know people have been working on it and more people are working on it, but this notion of just sending it all to Coinbase is not a good strategy. And I think people are even know that now, but what happens when the price doubles? Because that's, you know, that means more people are exposed, but that's more Bitcoin as well that they're accumulating. Just a very fascinating time to, this is all gonna like, I think in future state look like obvious, but right now we're kind of like at the edges of this stuff. Yeah. I mean, one thing that I would mention or to consider is, you know, as the asset prices have recovered and doubled and the ETFs and the US launched and everybody basically went to a single counterparty pretty much to do custody, their asset balances blew but their insurance, their governance and their framework stayed the same. Right? So to your point, Mike, you ended up taking additional risk without knowingly doing so to some degree. You know, I think some of the latest figure is 340 billion or so of assets that are, you know, sitting at coin base, but they still only have 350 million of insurance. So the, you know, from, from, Brian Cubellis (01:05:08.874) insurance versus underlying assets standpoint, you have increased your risk quite dramatically of keeping your assets essentially there. And it's certainly something that people would consider or should consider when they're thinking about custody or they're thinking about, you know, locating, you know, their assets with a single counterparty. Yeah, there's a discussion at Trillion Dollar Wallets and this is naturally Obviously, squint, this is just the start, but you can imagine different continents, different financial institutions, different balance sheets. And like we talked about this earlier, it sounded crazy and it's kind of strange to see it happening. This is good dates back to the call of 2022. But the notion of Coinbase and other firms having to participate in a model like this, I believe they will have to and increasingly believe they will have to because large scale institutions either want to leg into the asset class or firms like MicroStrategy that I guess it's like roughly 20 billion. price doubles, now they're 40 billion, let's say a third of their assets are at Coinbase and they say, hey, we're going to move unless you adopt something like this and participate. Whether it's a net new client, like multiple pensions, go into a state street and asking them to participate or existing incumbents that have a singular view and kind of a, not moat, but kind of a moat. That moat is only as strong as a click of a button. Maybe it's a little harder with Coinbase and sometimes they make it really hard where you can't pull your assets out. But the point being that if you move your assets, eventually the market has to participate. so I personally have had this long standing view that this will be a standard in a future state when it comes to like institutions will not be able to have unilateral control over the asset. Now, how quick that happens is really the question on how much the market requires or demands Brian Cubellis (01:07:01.262) I think you're going to see pensions in large organizations starting to demand control. I think it's the natural evolution here. I was looking at BlackRock over the weekend. think there are 21 billion now. How long before they started asking for potentially being one of pieces of the quorum for Coinbase, right? If it's a set of seven of 12 or seven of 10 or whatever the quorum is, right? How long before BlackRock says, actually I want one operator to be part of the quorum for any transaction? I think it definitely will need to happen. I think there's going to be diversification, but I think they're going to also demand to be included. you know, in the key control specifically for large organizations, pension funds, know, sovereign wealth, et cetera. It just, it just doesn't make any sense. They're, they're not going to take exposure to any single counterparty on this technology. It wouldn't pass the risk assessments. It's fascinating that MicroStrategy isn't there yet because they're a tech company. We've talked about this for years. It's kind of weird, right? That you would outsource. Like, Michael Saylor couldn't figure out the people within his network to trust more than the institutions that hold the Bitcoin. Because you could set up what we're talking about here with an entity as well. I mean, and this is what we talked about last week with Alex from CoinCover is you have to hope as an individual, as an operator in the space that Institutions that have exposure to large amounts of Bitcoin recognize this before we have another Quadriga, another Mt. Gox, another BlockFi, Celsius, FTX name, the blow up throughout Bitcoin's history. Especially as the stakes get higher, because every doubling from here, if we double from here, we're adding another $1 .4 trillion in market cap. The stakes just increase exponentially as the price goes up. Brian Cubellis (01:09:12.812) So, I mean, that's part of the reason why we do this show and why the word education has been mentioned so many times throughout this conversation is because there is like a moral obligation to make people aware of these options and get them over to them as quickly as possible to mitigate any of these potential blowups in the future because they are just going to get larger and create bigger headaches for the industry at large. Brian Cubellis (01:09:39.118) This feels like a trip down memory lane because when Jesse and I were chatting and Marty like back in 2022 about all this stuff, the key inflection point was like seeing the smartest people in the room weren't the smartest people. then the existing market structure, nothing really changed. Obviously there's more regular, there's more regulatory hurdles requirements, which is naturally better for, you dependent on the assurances required. But then the underlying tech is still the same with a single entity having unilateral control. And you can even have all the best regulations like we saw with Nevada and whatever happened with the trust charters with prime trust. But it doesn't matter from a technical perspective if you lose the assets, if you're leveraging MPC and all the other things. And so to Marty's point, the sad part is I'm pretty confident like we're still going to see orders of magnitude more carnage than we saw in 2022 because the numbers are going to get bigger. And I believe it's effectively the same infrastructure because what we're doing is still so new that the market has to catch up to it. But the hope is like you go into the next, you know, 2028 ETFs are larger and this is demanded by the SEC and other requirements. And we talked to the ETF providers, they call it bulletproof. It's just the, it's again, melts, the exact quote, it's bulletproof, but it melts brains. Yeah. Michael, to your point, mean, you know, in industry, a nascent industry, a nascent asset class, only develops if you learn from the failures that happen along the way. so Quadriga, Mt. Gox, all these, you know, FTX, all these failures, they only help us make this asset part of the financial fabric of the world if we learn from them and take those learnings and incorporate them into better products and better solutions. And yeah. And that's multifaceted too, because obviously at the end of the day, you protect the end clients and the consumers. But it also, I think it's imperative because you basically show regulators that we know how to self -regulate and reduce the potential for regulators to come in with overbearing regulation. Like we're able to actually self -regulate and educate and move people over to this as quickly as possible. Maybe regulators look at those. Brian Cubellis (01:11:57.934) They're like, these guys are actually responsible. And there's some people in that industry, despite what the public and many pundits may say that actually know what they're talking about and do care about securing people's Yeah. And to Michael's point, I fear that our educational efforts will not outpace the appreciation of the value held in Coinbase, for example. Didier, I didn't know that stat. They have $350 million of insurance on, what'd you say, $340 billion of digital assets that Coinbase... It's 1 % of their assets at any point. It's 1 ,000th of their assets, which is outrageous. And, I mean, talk about taking time bomb. you were going to take a holistic assessment of like existential risk this industry and you were gonna find all the ways in which something calamitous could happen. Coinbase has gotta be top of that list in terms of some internal failure or perhaps a 6102 sort of scenario happening if you have a single third party custodian that has unilateral control over that many assets. that much market share in the ETF space in particular. And that only gets worse as the price appreciates. And Didier, I think you have a great point there that their systems and controls are not necessarily going to scale as the price appreciates. Yeah, mean, I was gonna say I... I have so much to say on this topic. Unfortunately, I have to be careful what I say publicly. But any industry that has so much concentration typically leads to a very poor outcome. Right? I think there's a lot of analogy that we can say around what's being done right now by actor, like an actor like Coinbase. And you can draw parallels to like Microsoft. Brian Cubellis (01:14:21.61) in the 70s and 80s and dumping into markets and pricing. you know, on the custody front, I can tell you, we see them being incredibly aggressive on pricing. And, you know, it's very hard for other entities that are pure place to compete on that front. You know, if you look at your own ETFs, and this is a statistic that, you know, Brian Armstrong has said himself publicly, They have about 90 % of the volume out of the ETFs in the US. So not necessarily, you know, the number of entities they control versus live ETFs, but the amount of assets, it sits about 90%. They're also the largest player in Canada. They've been gathering a lot of market share in Europe. I know Australia just launched a couple of ETFs, all custodyed with Coinbase. I mean, you look at, you know, the systemic, it really is becoming a systemically important institution or FI, or as other would want to position it, a systemic risk into the system. And I think that's something very, very important to consider and to, to certainly we can't underestimate. I mean, the point around insurability, unfortunately, insurance remains a very difficult piece to get in the industry. There's only certain tools that we'll give to, let's say, digital assets and most of them are already kind of fully allocated. But with products like OnRamp is working on, with multi -institution, multi -jurisdictional exposure, then the hope is that you will be able to bring essentially more insurability, more coverage, more underwriting. into the marketplace and essentially reduce that risk. We shouldn't kid ourselves, like digital assets currently as it stands has a lot of single counterparty risk. And also, I mean, we didn't touch on this and I know we're close to time, but also a lot of risk around banking, obviously in banking services, which continues to be a problem in the industry. Brian Cubellis (01:16:32.908) Yeah, I was just referencing Marty on TFTC. He has a lot of investigative journalism into Coinbase and some of their custodial efforts with Zappo and the history there that I think is important for anybody to listen to and just what Didier was referencing to the aspect of the larger Coinbase gets, the more likely it is for something negative to happen. And it doesn't even necessarily have to be something crazy as a 6102. It's just a larger honeypot and larger honeypots naturally have larger greater attacks surface more More vectors or more individuals looking at them And so I think that's an important thing and then the only other thing to mention on that is the only way to win in something like that is to play a different game and that's effectively what we're talking about here is that the asset is fundamentally different and the existing models of financial services digital assets have been grafted on the existing model, which is effectively you have a single entity that holds the asset, you have a single entity that sells the asset, and what we're introducing is a different version where you leverage the native protocol, which is Multi -Sig, native aspects of the protocol, Multi -Sig, and you don't have to require a single entity to have unilateral control, and that changes the dynamic of custody. And then also additional financial services that can be figured out, but ultimately custody is the base layer, because we're still, We're not even at a hundred K yet. We all know we have so much more room to go. Yeah. And I think tying two things that were said throughout this conversation together to really get this idea proliferating through the institutions is, mean, Michael, you use the example of Unchain offering higher interest rate loans compared to BlockFi. And people didn't understand that. Well, it's like the risk is much higher. on BlockFi, so you're actually paying a much higher price if they blow up, which ultimately happened. think similarly, Didier, with what you mentioned in terms of like being a pure play custodian and trying to compete with Coinbase on fees, it's going to be very hard considering the scale and the different business lines that they have, but it's really trying to price that unknown risk for end clients where yes, they may have cheaper custody fees, but it's actually much more expensive in the long run due Brian Cubellis (01:18:52.578) this insane concentration risk that exists within Coinbase. Yeah, and we actually also, Marty, to your point, like we also get there as well by jurisdictional diversification, right? So, you know, it's a huge selling point for us as, as, know, being able to say your keys are in Canada, they're secured under, you know, a Canadian regulated entity with a clear framework. It's not, you know, trust us. 14 shards or 12 shards, whatever the number is spread out globally. It's like, no, here's the framework. Here's how they're controlled. Here's the governance overlaying. You know, there's some transparency, some trust that's built over that and some verification as well that's able to be done to some degree. But we're competing on jurisdictional risk as Very good point. And I want to again apologize for being tardy to this episode, to this recording. It was a pleasure speaking with you, Didier. is fascinating stuff, pumped. I mean, by the time this airs, the announcement will have been made, so congrats on really pushing this ball forward. it's something, like Michael said, and Jesse, Michael and I have been talking about for years. Like this is where the ball is going to end up inevitably, so. the more we can push it as quickly as possible, the better in my mind, because I think this is desperately needed considering all the tailwinds that are coming our way, which is a good thing, but we need to mitigate any unforeseen disasters in the future with models like this. Yeah, we have an exciting panel with DDA, Mike Belshi, Jesse, and Alex talking about these concepts at the institutional day. It'd be great to hash this out in here. It'll be, it'll be good to hear Mike talk about, know, the different countries, but under bank go and then this approach and the, thoughts there. Yeah, no, we're, very excited. We certainly appreciate the partnership. We think this is again, like just market leading in terms of the approach and you know, we think there's a definitely a need for it in the marketplace. So we're, happy to be your partners and we appreciate the opportunity and look forward to pushing this together. Brian Cubellis (01:21:08.13) Yeah, awesome. We're thrilled about it. You know, like I said before, I think it's probably hard to really point your finger at just how significant of a milestone this is, I think, in the evolution of Bitcoin custody. But with Tetra, we now have the first instance of a true multi -jurisdiction, multi -institution, multi -cig custody setup available for people today. It's called cubed for short. Is that where we're going to go with? Yeah, at some point we need some shorter descriptions, there's so much happening under the hood it's hard to simplify. cubed custody. That comes off the tongue much better. I do like that. Maybe we'll end up with Well, gentlemen, I look forward to seeing you all in Nashville. My flight leaves early tomorrow morning from the East Coast. We'll have to all get together. Yeah, excited. We'll coordinate. Looking forward to seeing everybody. All right, Have a good rest of day.