Episode 486: Akbar Thobhani, Co-founder & CEO at sFOX

In this episode, Mike Townsend interviews Akbar Thobhani, the co-founder and CEO at sFOX, the leading digital asset prime broker and custodian, who today announced new comprehensive bankruptcy protections for its clients’ assets under custody in the SAFE Trust Company digital asset custody platform, sFOX SAFE, revolutionizing the standard for an acceptable level of digital asset security and enabling all investors to secure their investments by offering custody free of charge up to $250,000 of assets under custody.

Host: Mike Townsend

Guest: Akbar Thobhani

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Episode Transcript

Mike:Today's conversation is with Akbar Thobhani the co-founder and CEO at sFOX.sFOX has raised 23 million making custody service a reality. They are alicensed entity in the state of Wyoming. We talked about how they've grown thebusiness over the last nine years of operations since 2014. They have a team ofabout 70 people.

And we discussedtheir strategy of going regulatory approval first. They're one of a only a fewcompanies in the US that have regulatory approval to do what they do to operatethe custody business. We talked in about that in detail. We talked about thehigh level crypto industry in the US and what's necessary for successfulflourishing of.

Of the industry andwhat's needed to be done going forward. This is a really important conversation.Akbar is running a really important business and I hope you enjoy and learn. Ifyou do, please give us a thumbs up or share wherever you listen to this podcastand we'll have many more. Thank you.

Mike:Okay, Akbar, I'm really excited to talk to you. Actually, we, this is our, oursecond cut. The first cut. I forgot to mention, I did an interview with sFOXyears ago. In fact, I have been running this podcast for, I. 10 years. Istarted it in 2013 2013, and in, I think it was roughly 2016 or 17, I did anin-person interview, which was the only one I've ever done.

And it was in thesFOX office in Southern California. And I just happened to meet your head ofgrowth and I came in and interviewed your partner. So I I, I, it, it's, it'sawesome to come full circle and speak with you now, so appreciate your time.I'd love to first get into this and talk about your thoughts on crypto.

From a high level,you guys are US based. You take careful attention and diligence to beingcompliant with the regulatory bodies that oversee crypto. However, there oftenis a. Large frustration among founders in crypto in the US that there justisn't enough regulatory clarity. How have you navigated building a businessover the last 10 years?

You guys areroughly 70 people. Can you walk me through just the, the brief journey of whereyou guys have come from?  

Akbar:Mike, thank you so much for your time. I, I, I do remember the. The very firstinterview had, seen it. I wasn't, I don't think I was in the office at the time.But we've come, we've come a long way from there. And, a lot of what we startedwith was with, with this core belief that we have to be compliant. And that waslike a one day one requirement. So we actually waited for finsent to say, Hey,here's how you're gonna do compliance for the, the virtual currency industry.

Before we startedthe company, I think that that came out around 20, 13 or so.  

And so we said nowthat we have guidance, we know how to move forward in this space. And we'vetaken that stance throughout. And  

so what that'smeant for us is that in terms of the, in terms of kind of the opportunitieswe've gone after we've been, we've been focused on making sure we only dothings that we know are fully compliant.

We have had to notpursue certain opportunities in the market. And as the regulation evolves, itgives us more and more opportunities. I think. I'll give an example. Wyomingover the time has kind of, the, has figured out, okay, here's how we wannaregulate crypto. And they, they, they take the time and effort to actually,pass a law about two years ago on how to regulate crypto. And we, we workedwith the division of banking there under the, under the regulation, and we gotour trust license, and that's allowed us to offer more services, again, withina, a regulated platform. And so that's an example of why, we, we kind of focuson where can we get regulated, what's the path?

And, and as theindustry evolves, as the the regulation evolves we just get in better andbetter position in the market.  

Mike:And have you seen the trend of the regulators being more open, more closed overthe last few years? Do you feel like there's an explicit initiative orobjective from regulators to banish crypto from the us?

I mean, there'scertainly the influence of of like the, The exchange FTX is collapsed. And, andI wonder, do you view that as an excuse for the government to bancryptocurrencies? Or do you look at that as like an actual backlash? I mean,how, how do you sort of see it there? Cuz there's the obvious conflict ofinterest with US dollar, right?

The federalgovernment controls US Federal government controls the. The world currency. Andwhen Bitcoin or other currencies come around, it challenges that they don'thave control. So there's like an obvious conflict of interest. And I wonderwhat are you seeing given your position?

Akbar:Yeah, we, we do see the, the regulators kind speeding up and slowing downtaking more interest or less interest in the market over, over the last eightyears. I. Don't, I've not heard of any kind of regulatory body coming out,right. Saying they're trying to shut down crypto. That I don't, I haven't heardthat at all. But you know, what we do see is over time getting more clarity onhere's how we want to regulate crypto. I, I think an example is CFTC kind ofproviding the clarity with Bitcoin.

I think that wasdone about almost four, four or five years ago on how they see, Bitcoin. I, Ithink Wyoming is another example. And New York is of course another examplethat's also taken a stance of how they want to regulate the, the industry. So,so I do think that more and more regulators are, are learning about the, thespace and, and providing regulation that, that they believe is appropriate forkind of their their stakeholders.

The, the FJ thing,I mean, look, it's however you put it right, that, that was a, we call itfraud. They call it mistake, whatever you wanna call it. The reality is it wasreally, really bad for the industry and They're kind of, perhaps there weresigns before FTX that, that people should have looked at.

It, it was an areathat, there are a lot of stuff they were doing that we do not offer. We,because we just don't believe that that's kind of the right thing to do in themarket. And so, they were doing, they're taking risks that perhaps theyshouldn't have. And ultimately it does, it does impact the everyone, includingthe regulators.

So since the ftcand I do think that regulators are more involved, but I don't think that it hasgone to the point where they're saying, Hey, let's shut down crypto.  

Mike:Can you tell me a little bit more about New York, Wyoming, and the, the federalgovernment in particular? I'm interested to, to learn what, what is the f theCFT C'S position on Bitcoin?

How do you howwould you explain that to, to me and the listeners and New York as well?  

Akbar:Yeah. Look, I, I, I'm not a lawyer first of all, so anything I say is reallymore my interpretation of what I've heard from the, the various legal folks.Cftc I believe is explicitly said Bitcoin is a commodity.

So I think thatthat's, the first position there.  

With regards toWyoming Wyoming has a digital asset law, a virtual currency law, if you willspecifically designed for features of cryptocurrency. So they, for example,talk about staking and they talk about custody and o other aspects of what doyou do with the, with the digital asset.

New York was one ofthe first to start with the bid, license at essentially provided guidance. Fromthe. The, the regulators there on how to, how they're going to govern the, thelicensing regime for the, for the citizens of New York.  

Mike:Mm-hmm. And New York kind of has a reputation as being hard to operate in.

Is that somethingyou agree with and. Wyoming has a reputation, I think of Wyoming, Texas, maybeFlorida as being the most pro Bitcoin, pro crypto generally states. Is that anaccurate representation of the general trajectory of these states?  

Akbar: Ithink they all have their own requirements that they, they kind of put forth.We currently do not operate in New York, so that's a, we are currentlyoperating in Wyoming. And to the extent that once we get our license in NewYork, we will, we'll operate in New York as well.  

Mike:And do you see that it's hap like is that happening next month or is that nothappening for 10 years?

Are there othercompanies that have licenses in New York, like, is New York thriving? From acrypto standpoint? I, I would suspect the answer is no. And I suspect that thereason is they view it as a threat to their. Largest industry, which is WallStreet and the financial industry. Is that, is there something else to it?

Or is it as simpleas that, do you think?  

Akbar:No. I, there are companies that have licensed in, in New York, I think, I thinkthere are companies that were fairly large at the beginning when the, theapplication process came out. And then they were able to get those licenses.And I think that says great.

I think recentlythey have had team changes and. I, I do think that sometimes with the resourcesthat they have, they speed up or, or slow down the, the processes. We don't, wedon't get a sense of any competitive aspect, I just think it's a matter ofresources that they have to, to put towards various projects.

And, for us, we,we've we put our application where we're getting our application ready andultimately when we're ready and, and New York is ready, we'll, we'll, we'll getour license and operate in new York.  

Mike:Hmm. yeah,  

New York seems likea, a tricky place. Like, like why is, why is Wyoming, for instance, like,alright, let me ask you this.

Why do you, what doyou think of the, the differentiation between states and federal regulatorybodies? You interact with the federal fin and You like, what else? S e c I'msure there's other re regulatory bodies, but then you're also working with thestates. You, you worked with Wyoming.

You're working, Iset the application in New York. I presume there's many other states thatyou're working with as well. What, what is the purpose of this multilevelregulatory system and is, how does it affect things on the ground for you as anoperator?  

Akbar: Ithink that's a reality for anyone in FinTech in, in the US because you do haveto you do have, rules both from the state and the federal government.

There are certainexemptions and, and certain processes that you can, you can work with. But youdo need to comply with with both the, both set of laws. So I, I don't thinkthat's unique to, to crypto per se. I think that's the reality of any FinTechin the us. And, and we will continue, we'll continue to to work with the withthe regulators.

But the, but, buthere's the, here's the interesting part, which is if you think about, if youthink about the the banking laws for a second, banks have very similar kind ofstate banking and federal banking, so it's not much different.  

But one of thethings that, that banks were doing is that, if you go put a deposit of money inyour bank what happens is they can, they lend it out.

I mean, there, it'sjust their business to take that money and lend it out. Well, if there's a mismismatch between the, the bank's, lending book and then the, and the borrowingbook, the deposits that's when issues start. And this is true with just the,the model in banking. Now, the regulators have essentially lots of.

Policies on how tomanage that. But the reality is it's actually fairly hard to do. I mean, yousaw what happened just the last few months with the multiple banks that had amismatch in duration between the, the deposits and the, the lens, and  

they're lending itout to the US Treasury. They weren't taking unusual risk, but the reality iswith the interest rate changes they, they weren't able to manage that risk.

And I think that'sone of the things that I actually appreciate about the, the rules in Wyoming,for example, where they said, look, we can actually create a custody solutionwith the, with the laws in Wyoming where we can hold those coins in  

Bailment. Right nowthis is I'm getting into little bit of details, but, but you know, since you'reasking, I wanna give you the full picture.

Mm-hmm. Which iswhat does that mean? So that means that. When you give, when you put depositmoney into the, into the company, it's almost like dropping a car off yourvalet. Mm-hmm. You're not giving them ownership. You're not saying go lend itout. You're saying just go park the car. And the same way when you, when youput and deposit money in custody under the, the Wyoming rules, we can hold thatin bailment.

We don't lend itout. We let you decide if you wanna lend it out, we'll give you the technology,the tools to do whatever you want to do. But we don't, we don't do it on yourbehalf. And we think that that kind of prog, progressive view is actually veryhelpful because unlike a bank where you, you lend it out, the whole businessmodel, is built around that.

It's a lot riskyand you're dealing with crypto, which already has a lot of volatility and risk.So having a solution the way Wyoming put together has actually been abeneficial. And so, what we're doing is creating that custody solution whereyou can hold a coins in Bailment.  

And I think that'san example of how regulation actually helps move the industry forward. So, i,I, I do think that there's a lot of work in various states, but  

I do think thatslowly it does make the, the company and the product much better with theregulation that's actually thinking forward about how, you know it should becovered.  


why would thatrequire, Regulation. So I'm thinking about like, if I go to a bank, they seemto bury the fact that they are gonna take my money and loan it out in deep inthe terms of service.

When people putmoney into a bank, I bet most people think that this is 100% safe. They're notthinking like it's 98%. You know that the, that the bank is taking my money,lending it out, and like every once in a while it's gonna be gone. Like,especially for. Company funds that were in svb, the founders are thinking, oh,that's, that's guaranteed.

They're, I bet ifyou did a survey, this is my anecdotal guess here, but if you did a survey tothousands of founders who had over a million dollars in svb, I would bet morethan half thought that the money was actually in the bank. Like they, they,they, they would've thought that, what you're describing with this bail, bailsetup, like that was the arrangement.

If they were tosay, Hey, actually most of it is being invested into treasury bonds. I, I don'tknow. Like I, it, it just, so why is this something that's not more common inthe banking sector? What if I look around at the thousands of banks in the us,how many of them are charging me a monthly subscription to do bail, to hold mymoney in custody?

Probably. I don'tknow. Is there any I I've seen zero so far. And why is that?  

Akbar:No, but the definition, right? The bank's business is to take deposits and lendmoney. So I think by definition, every bank is doing that. They have to, that'stheir whole business model is when you deposit money. They'll lend it out.

And they havereserve requirements and other requirements from, various regulatory bodies.But at the end of the day, that's kind of bank's business. I mean, you, you goto a bank for a loan and that loan money comes from someone else's deposits. SoI, I think it's a, it's a business model that banks have, but the otherbusiness model of just holding things in custody isn't the, it wasn't possible.

Like if you'rebuilding, if you're building a financial institution, You want a regulator tosay yes you can. You can do that too. You can hold things in.  

Mike:And why though? Why is that? Why is that? Why does that have to be the bank'smodel? I'm picturing like if I use svb or another bank and I put, if I'mrunning a business, I have a million dollars in, in the bank, I put maybe amillion dollars in the bail account, and that's gonna be just held in custody.

Alright? Maybe Iput 800 K in that and I put 200 K in a slightly higher risk. Model where they,they lend it out to treasury bonds, and then maybe I put 2% in something that'shigher risk. Like there's a, I would just imagine there's a, there could justbe, banks could just add the service on as like, oh, this is just anotherservice offering.

It doesn't seeminstrumentally different to the business model of banks. Banks hold value,store value. Is there some regulatory reason that none of 'em offer that, likethat, that custody service.  

Akbar:Yeah, I don't know why banks don't offer that. We do know, for example, thatbroker dealers kind of offer that, right?

If you want toinvest directly in treasuries yourself, you can, you go to a broker dealer, youdon't, you could go to the bank, but that's the indirect way of getting there,right? Right. So, so there are other types of businesses like ours, right?There are custody companies in, even in the equity market, there are actuallycustodials that you can go to and say, hold, hold my equity.

And, and that's allthey do. And they will work with DTCC to clear your transactions. But a lot ofthose have always been available to, I would say, high net with individuals andinstitutions. They haven't been available to everyone. Now with crypto, cryptois a, mass market product.  

It's used by, everydayusers retail users, but also institutions.

And so it is anopportunity for us to say, Hey, how can we offer some of these services that doexist in, in other markets to the crypto world? So we'll talk about thisbailment for, one more second, which is when you, you could go to custodycompanies who hold this em bailment and there are companies out there that willgive you that service but they'll charge you for it cuz it's expensive, right?

How else are gonnamake money? One of the things we've done is we said, Hey, For anyone that hasasset of up to $250,000, we will offer that service for free. And the idea isthat there'll be people that have more capital who will pay for the fee andwill, they'll essentially subsidize those that you know, that don't have thatmuch capital.

So ultimately thecompany can still afford to offer these services, but making it, giving thiscustody solution that is. Available often to only large institutions toeveryone is really what we, we kind of push for. And I think that, thatrethinking of, Hey, we've got a new asset class, how do we rethink the businessmodel?

I is what we'reexcited by, right? We're excited by rethinking the business models to offersome of these services to everyone, everyone that we can.  

Mike:When I first saw that 250 level, that, that, that Freemium model. I firstthought of F D I C, so they have a, I think it's, I think it's 250 K, it mightbe 200, I forget off the top of my head.

But they have anamount that if you put it into a bank, it's insured by the federal government.And I was thinking that you were doing the same thing. Can, can you explainmore precisely what the trust company, so you have the safe. Trust company. Andthis is a company that you started in Wyoming. And is this, is this theoperating company that you're using to hold custody for crypto specific fundsfor Wyoming residents?

Or can you explainmore who has access to this product and what the product does for people?  

Akbar:Yeah, let me, lemme explain what the, what the product does. So, it is, it isoffered by Safe Trusts Company, which is a, a custody company. As subs,approved by the it's a trust business approved by the division of banking inwyoming.

Mike:And did you start this company? This is a, this is a sFOX company?  

Akbar:This is, yeah. It's an sFOX affiliate. Okay. And that's why the product is sFOXSafe, not, not to creative there. Mm-hmm. But it is, it is an affiliate ofsFOX.  

And the reason, thereason we did that is because it is a different business model. A bank'sbusiness model is you take that money and you lend it. Well, when you lend it,there is risk. And what happens when that, something blows up? Well, that's whyf DICs needed, because you've taken that money and you've lent it. And if forsome reason there is an issue on the lending side, the banks will, banks gobankrupt. And so therefore, F D I C has an insurance program to cover that. Inour custody business we do not lend it unless you choose to lend it. So you getthe choice of lending the money or not. And so because of that, we don't  

ki we don'tnecessarily need F D I C to offer that insurance. So what we've done is we'vesaid, look, because we're not lending it, really the only thing we're doing is,the way we can make money is to charge for it.

So anyone that'sless than $250,000. We, we charge for it. And then anyone above actually paysfor the, the service.  


And how's it going?So you guys have 70 people, you raise some money. Can you talk about the amountof customers you have or revenue or any other metrics you use to measure theprogress of the company?

Akbar:Yeah. You know, one, one of the, the big things is, I mean, I'll, I'll justgive an example. Just this year. If I look at the number of customers we had inJanuary, we look at business customers and institutional customers.  

That's kind of our,our focus has in our focus. But we also have a lot of professionals andindividuals who use our platform as well.

But when I look atthe, the business and the professionals the number of customers we signed upin, in April compared to January we grew 500%, no, increase in number ofcustomers. We signed up. So, in the, in the, in the middle of crypto winterwith everything going on, we're actually increasing the number of customers wesign up.

For our custodysolution, we're doing the exact same thing. We've we, we used to have maybe ahandful of customers that's, increased 10 x in terms of the number of peoplelooking at the demos and so on. So, it has picked up a lot. I think largelyit's because it does actually solve a real problem for people.

Cause a lot ofpeople look. Crypto is hard enough and if we can make it easy where you can getthe benefits and the security that you need, but then you can also then dotrading and everything else. That's what people are looking for. So I thinkthat the combined platform that we provided is resonating with people and so,we are growing as a result of that.

Mike:And, and would, are you able to give any more specific numbers as to how manycustomers you guys are at or how much revenue the business is doing to put itin perspective?  

Akbar:Yeah, we'll, we'll make some public announcements on those as kind of, wecontinue. But for the, for the most part, right now we look at kind of ourgrowth rate and kind of how fast we're growing.

Because reallywhat, what really matters right now is like, how many people can we help? Howmany businesses can we help? And so that's really our focus. Because we're notretail, we don't kind of have the, the mass market where, we don't, we don't domillions of users, right. We're looking at thousands of companies that we workwith.

Mike:Mm-hmm. And can you put it in maybe a ballpark? Like is it hundreds ofinstitution? Dozens, hundreds, thousands of customers? And is it like. 10million revenue in the ones tens, hundreds. Like where? Just gimme a I knowyou, you probably don't wanna mention it for concern that the information willbe used for competitors, I would imagine, but can you gimme a, like a ballpark?

Akbar:Yeah. I mean, We, we, we do speak with investors and so I think it's alwaysgood for us to just focus on like, that kind of information with the investors.Mm-hmm. So. From, from, from the, the business accounts perspective, right? We,I would say we're, more than in the thousands, right? Like mm-hmm. Four or fivedigits. So that's kind of where, what our focus is, let's say five digits.  

Mike:Yeah. Awesome.  

And how many otherproviders have, are offering something like this? And, and I think of theprimary value proposition as you are. Tied to or regulated by the state ofWyoming. So, and, and that gives people a lot of trust, is that correct?

So if you weren't,if you didn't have that regulatory approval or embedded integration with thestate of Wyoming, then the value proposition would be maybe untenable forpeople. From an institutional level, how many other companies are, are in thisballpark? Like, are we talking. Coinbase, Gemini, I don't know, like, like adozen, right?

Or, or less. Itcan't be many, right?  

Akbar:No, I, I, I think if you not, not every, not all of these companies are equalmm-hmm. But if you just look at the number of custody companies, we're probablyin the us we're looking at about five or so. Mm-hmm. So I don't think we'relooking at that many.  

If you look at thenumber of pure play digital asset companies outta Wyoming there's only one andthat's us. And so, it, it is something that we are kind of happy and happyabout that we've actually been able to think forward and, and get there. Butbut there aren't that many custody companies in the US.  

Mike:Hmm. And, and where do you go from here? Do you look at this as a land grab, assay, okay, we're gonna take what works in Wyoming and then go to Florida,Texas, maybe the more pro crypto states first and try to gain ground in thatway?

Or are you thinkingabout it from another, another angle?  

Akbar:We certainly will work with, with other states as well. So, we, we already haveplans in working with with. Multiple states and, and building kind of thisinfrastructure in, in as many states as we can. So certainly that is part ofthe plan. But I also don't think of this as you. So look, I, I was with Airbnbbefore, so the word land grab is a very different meaning because at Airbnb,rescaled and grew that company extremely fast. One thing in, in the financialworld is that we want to move really fast, but we don't want to break things.

So I think that'svery important that in the, in the world of finance, that you move fast, butyou can also be very methodical. And that'll continue to be the ethos of thiscompany, is to make sure that we can we can take one step at a time, but takeone giant step every time we take the step.

Mike:Yeah. Akbar,

I look at what you guys are doing and, and theother five companies that are doing something similar as the Beacons of Hopein, in many ways for the crypto industry. When you mentioned your growth rate,I think of not sFOX's growth rate, but I think of the growth rate of theindustry, cuz you guys largely reflect something much larger than what you'reworking on as a company.

And so when I speakwith you and I look at the progress you made, I, I'm frankly, most interestedin it as a signal for the direction of our country, and I think it's, it's oneof the most important things for the trajectory of our country to have a aproper alignment towards the adoption of crypto.

And if we don't it,I mean, where would this country be if we banned the internet and we just said,Hey, we're gonna let other countries build first. We're not gonna let thathappen here. Like, the top five country companies in the, in the s and p, atribute to half of the growth. Like we would be a static economy.

We wouldn't begrowing if it wasn't for the internet technology companies. And I, I fear thatwe have this disposition in this company, sorry, this country of. Of likepushing crypto development outside the country. And I look at what happened inpsychedelic medicine and I think maybe the reason why we have an absolutemental health crisis in this country is because we didn't allow psychedelicmedicine to flourish in the seventies, eighties, nineties, and two thousands.

And we're just nowintegrating it back into society legally. And I fear that the same thing mayhappen in crypto, that there may become, there may be this like, Generationalban where it's like, okay, for the next 30 years, we're not gonna allowdevelopment. And it just becomes, collects dust. And we're, we're at thisreally important tipping point where it could go either way.

At this point,you're starting to see states come out with policies f Florida and Texas. Ithink Wyoming have had very specific regulatory or, or legal bills pass thatrecognize the sanctity of Bitcoin. What, what should we be thinking about as acollective for preserving the right to trade and build and innovate in thisspace?

Like what, whatshould we be doing either individually or collectively to ensure that this thatthat crypto adoption happens in the United States?  

Akbar:Yeah, and it's very well said. I mean, think about the internet for a second.Back in the nineties and, dating myself, but, back in the nineties I thinkthere's a video that circulates about bill Gates kind of being with DavidLetterman and, but they're talking about what can you do with the internet? Andthey're like, oh, you can have your own webpage.  

And in some ways weall have our own webpages, but we don't really market our webpages. Everyone.The Internet's gone in a very different way. I mean, if back then you couldn'tthink that, hey, you're gonna actually have a internet on your phone and you'regonna be able to call Uber and and Lyft and get your, get your car servicedlike that, that idea of being able to do that just wasn't there.

And had we stoppedthe internet at that time, frankly, right. We wouldn't have any of the, themobile phone growth that we've seen since then.

I think crypto isin the same bucket. There is. We're, we're talking about Bitcoin, perhaps, andEthereum and some of the, the more fundamental and basics, but the reality isthat over the next 20, 30 years, a lot of how we do finance will move to theblockchain.

I mean, thattechnology-wise, it's proven that it is a, it is the technology that's enablingtransfer of asset between two different parties that don't know each other. Andthe, if as, as we kind of develop the, the compliance programs around it and aswe develop the security around it, it is clear that the technology-wise, thisis a direction where the world is heading.

So stopping thattoday, I think could be, we would essentially be in the dark, in the dark agesin the financial world. And in the, in the blockchain world, while othercountries continue to innovate. So, so, no, I don't think that slowing down theinnovation in the space is, is the right path.

But, but at thesame time, I do believe that, having a, a sensible regulation around makingsure that. Systems are built in a secure and a compliant way in, in making surethat systems are the businesses are built in a, in a, in a way that's actuallybeneficial.  

I do think that's,that's needed. The example that I like to think about is what happened in theequity market. If you look at the equity market there is this concept calledself-regulatory organizations or SROs. New York Stock Exchange is governed by Nsro, right? So there are SROs in the equity market. Which essentially makessure that, they develop something that is compliant, but also has the safetyand security needed to, to build that, that kind of platform.

I think similar isneeded in the, in the crypto space, so, I think we've taken the first step ofsaying, look, we will be the good corporate citizens and, but we're gonna makesure we build something that is. That is safe and secure for our customers. I thinkother companies will do the same.

And, and I think ifthe companies were to create these SROs and actually develop that as anindustry, I do think a lot of the regulators will feel a lot more comfortable.And I think that's what's needed. I think what's needed right now is creationof, these self-regulatory organizations to make sure that we are governed andregulating ourselves, understanding the, the, the difficulty and differentcomplexity that's offered in the, in the crypto industry.

And so long as wecan do that and we can work with the regulators in developing a system that.That helps them kind of manage their obligations as well. I do think the, thefuture of this country is bright and, and together I think we can developsomething that 30 years from now we'll look back and say, oh, do you rememberthe time when.

We used to actuallyhave to, send checks or, or when we traded stocks, like you could only be inone broker dealer. I think a lot of that will change and, and it, it onlyhappens one step at a time.  

Mike:And if you were to give us a grade, if you give the country a grade for itsperformance on adoption, not, not the industry, I'm not talking about FTX iscollapse and any of that, but if you, you give us a grade on like, how well arewe doing.

From a governmentalintegration and technology adoption perspective, what do you give us? Like youmentioned these SROs. Is this happening or is this not happening? Are we on agood trajectory or do we need to really step it up?  

Akbar: It'sa really good question. But I think I. Put a score. I think, I think there hasto be context around like how we're thinking about this too. We do work, we dosee markets across the globe. We do have an entity outta Singapore. We have a,a BVI entity and and we do work with other regulatory bodies in different partsof the world. So given that context, what we've seen is. In, in many parts ofthe world, the ambiguity is actually even more and not less.

Oftentimes the, thegovernment's gone back and forth. Sometimes crypto's allowed, sometimes it'snot allowed, and, and that ambi has actually made it even more difficultbecause you invested and then you have to pull out to invest again. You pullout. So that's actually become even more difficult internationally.

The, what what Iappreciate about the, the US system is that, there are checks and balances.There are judicial systems and, and so there are kind of multiple differentinstitutions looking at crypto. I also think the clarity that Finsent gave earlyon was. Actually really helpful. And I think that as we get more and moreclarity, I do think that US tends to have a much better system to governlong-term. Right now I do think that some of the agencies have not provided aclarity. So given that I'd probably, on a scale of 80 D, I'd probably giveourselves maybe a B or B minus.

But I do think thatcompared to some of the other countries, there are some other countries whereI'd probably give them C or D. Because of the crypto's hot today, not tomorrowkind of attitude. Cuz that's actually worse. I mean, I'd rather get theclarity, but get it once so that companies can invest, company, can developcompany, can build the solutions and not have to redo it every time thegovernment changes their mind.


So you seem, justin speaking with you, you seem to have a, I'd call it cautiously optimistic. Atrajectory over towards the US' regulatory performance so far. And certainly Iknow that you wanna be personally successful and successful in the business. Sothere's some degree of like, okay, we just ha this just has to work.

But when I listento the CEO of Coinbase talk, it gives me more concern and it makes, and, andthe, the benefit of being a leader in a company like yours and sounding more ofan alarm. Is that it calls attention to people who are on the sidelines, likemyself, who I, I run a podcast, I invest in crypto.

Like, so, like, I'mlike amateur-ish person. There's a lot of people in that like this, the, thecrypto Twitter sphere. And it's really an army. It's an army of people and toalign them and point them in a direction and say, this is what we have to doand we have to do it now, it be, it can become like a laser and lasers are muchmore powerful than flashlights.

And, and I, I, Ijust, I would encourage, I'm trying to encourage people I talk to that, hey,if, if we're really in, if we're really headed towards the iceberg, like weneed to pull a hard freaking left and like we need to do something, whetherthat's come to an organization, we all put in money. Like what if everyone putin 1% of their crypto holdings and together there was like a lobbying groupthat then went out and tried to like, make specific things happen.

I don't know. Idon't know if that's the answer. You mentioned these SROs, like how do we, howdo we do this 10 times better, 10 times faster? And, and like I would love foryou to tell me, Hey Mike, I think there's a 95% chance that US is the absoluteworld leader in crypto innovation over the next 10 years.

Instead of like Bminus, maybe sliding downward. Do you feel like there's enough momentum, enoughfocus energy in the industry that is pointed towards the direction of lobbyinggovernment and making the changes necessary? And if not, what should, whatshould we do specifically to, to address that concern?

Because that, to mefeels like, I, I'm sorry to spend so much time on this. I, I know there's somuch to talk about, but this just feels like such an important thing to getright. Cuz if we don't, then everyone, every, every project is just, r i p.But  

Akbar:yeah, I, I, and look, I'm torn in, in, in, in some ways because the, thecomplexity of crypto is, is, is significant and unknown, right? Like, I mean,the lot of the technology innovation is still ongoing. And so, having, havingputting anyone on the spot to say, well, why don't we have rules or laws aroundit? You have to think about it from their perspective too and say, Well, how dowe govern something that's evolving so fast? So I I, I will still go back tothe having the SRO kind of model, which is that people in the industry gettogether, create a, a self-regulatory organization, and we develop the, the setof standards that, that the industry will, will abide by and, and will, willwork on. I do think that's probably the, the most efficient way of, of gettingto that next level.  

There's alsoobviously right, the clarity from the regulators, and I, I don't think anyone'sgonna argue on that, but the reality is that is, that is not in our control, atleast, mm-hmm. As, as a company. I mean, that is something that we as citizensshould talk to, to CFTC and S E C and, and other regulatory parties say, Hey,please provide clarity to the, the industry.

But in many ways,we as an industry also need to grow up and, and, and, and do our part. Andthat's what we're focused on, right? We're we're focused on what can we do? Andwhat we can do is make sure that we take that right step, right, make sure thatwe offer the bankruptcy protected custody. I mean, that's the, the fact that itwasn't there before, it kind of amazes me, right?

That you, we shouldhave hopped that on day one. And honestly, if you, if you had thought of thaton day one, we would've built it. But. Being able to build that kind ofsolutions where we're saying, look, we are going to be an industry that takescare of its customers. I think it's important. So I, for me, I think that as a,in industry leaders, we should do what we can.

But as, as acitizen, yeah, I certainly, I think that, Reaching out to the, the appropriateregulatory bodies to provide that clarity will be very important.  

Mike:And how about these SROs? Is there an SRO that you can point to that's like,this is the SRO for like trading or like, are, do these things exist or,  



Yeah. No, it's, Ithink ability. It's actually called the N yc sro. Like, it's literally calledit's called Reg. Yeah, I can look it up. But there's actually a specific.Entity that, that governs that in the equity market. But not for crypto.  

Not for crypto. AndI think, I think that's something that, we'll we're, we're gonna start lookinginto and, and developing that, that coalition so that we can do the same thing.

Mike:If I were to set up, just hypothetically speaking out loud, right? If we wereto just set up a podcast with like, can we get, like, it may, it doesn't haveto be public, like we could do it privately, but we say, Hey, let's get 10.Like, let's, how do we kickstart this? We get 10 founders of venture funded, USbased custody crypto companies together with the general ambition to createsome sort of sro and we just throw an hour on the calendar.

Talk about how thismight look with a Google Doc. Like, is that, would that be helpful or do youfeel like we're past that point or like,

Akbar: Ithink we should do it. Yeah. I don't think we're past that point. I think weshould do it. And we should, we should be, you know, championing andpioneering. Why not?

Mike:Yeah. All right. Well I'm gonna hit you up afterwards about that. Let's do it.Let's do it. I know we're approaching our time Akbar,  

you guys haveraised a decent amount of money. You've made tremendous progress so far. Isthere anything you wanted to talk about that we haven't talked about so far? Wecovered a lot of ground.

Akbar:I, I know, I, I do, I know we covered kind of a lot on the regulatory side.Mm-hmm. Mm-hmm. But one of, one of the big things that, you know, that, thatwe're seeing in the, in the market is that people, people love this idea ofhaving access to the blockchain and blockchain services and, and, and that,notion of.

And, and, and, andwhat does that mean? Right? So look, there's so many things you can do with theblockchain, but it all starts from OnRamp and off ramp, depositing moneytrading and then, and then custody, right? Like that becomes the, thefoundation. And for us, unifying that and creating that seamless experiencebetween all of those is what we're focused on.

And I do think thatthat ease that we can create for our customers. I think becomes very importantbecause for a lot of customers, the crypto is way too complex. I mean, we'retalking about regulatory bodies, I'll tell you, I was at a conference earlythis week and we were talking about things like what's backing Bitcoin?

So for the, forthe, to grow the adoption of the space. I think that making this entireexperience easier. Is actually what's needed. And that's kind of our focusarea. And I think, that's something that if you talk again, maybe that's a,it's a good topic to kind of delve into because right now crypto is really toocryptic for a lot of people.

It is very hard andvery confusing. And I think if we can govern and transition that to more of a,digital assets that make it easier for you, I do think that the market is readyfor that and something that we should we should all be working towards.  

Mike:Love it. Love it.  

Well, Akbar, thanksso much for hopping on today. Congrats on all the progress with everything. Ihope you guys achieve wild success and paved the way for many other companiesto follow. Are you active online tweeting or blogging? Anything you wanted toshout out personally? We'll have all the links to the company and the shownotes.  

Akbar:Yeah, I mean, look sFOX.com is is where we are. On twitter, it's sFOX and Youknow that, I think that's the best place to get to get to us. If you're onTwitter, any messages, we'll, we'll get it for sure.  

Mike:Awesome. Thanks so much for your time and talk soon.  

Akbar:Thanks so much.