#609 Building A Crypto Unicorn with Michael Wu

Michael Wu is the founder & CEO of Amber Group, a Hong Kong-based crypto finance startup that provides trading and asset management services. In this conversation, we discuss building a crypto unicorn, servicing institutions, market making, crypto finance, and centralized vs decentralized services. ======================= Remote makes it easy for companies of all sizes to employ global teams. We take care of international payroll, benefits, taxes, and local compliance, so you can focus on growing your business. Sign up for Remote today and receive 50% off your first employee for the first three months. Check out remote.com/pomp and enter promo code POMP to get started. ======================= Choice is a new self-directed IRA product that I'm really excited about. If you are listening to this, you are likely part of the 7.1 million bitcoin owners who have retirement accounts with dollars in them, but not bitcoin. I was in that situation too. Now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys and using tax-advantaged dollars to do it too. Absolute game changer. https://www.retirewithchoice.com/pomp ======================= You don’t have to be a hedge fund guru to know that markets can rise and fall quickly - remember Dogecoin? Sometimes, the most attractive growth can be found in some of the oldest of places. Despite being hundreds of years old, the art market is poised for tremendous market capitalization growth. Deloitte projects the total wealth held in art and collectibles to expand from $1.7 trillion to $2.7 trillion by 2026. I largely attribute this to the rise of securitized assets, opening the doors to the art market for all. Founded in 2017, Masterworks dot IO is the leading platform for blue-chip art investing with over 185,000 registered users. They have purchased over $180 million in art from artists like Banksy, Basquiat and KAWS. I’m a huge fan of Masterworks dot IO and have spoken with founder Scott Lynn twice now on the pod - so go back and give those episodes a listen! Check out Masterworks dot IO today and skip the waitlist with promo code POMP today. See important disclaimer at Masterworks slash disclaimer

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Michael Wu is the founder and CEO of Amber Group, a Hong Kong-based crypto finance startup that provides trading and asset management services. In this conversation, we discuss building a crypto unicorn, servicing institutions, market making, crypto finance, and centralized versus decentralized services. I really enjoyed this conversation with Michael, and I hope you do as well. Before we get into this episode, though, I want to quickly talk about our sponsors. First up is Remote. When you use Remote, you can employ people in other countries legally and easily. They take care of international payroll, employee

• 0:44Anthony Pompliano?

  benefits, tax headaches, and all the paperwork for local compliance. Forget about location and hire the best person for every open role using Remote. Remote's platform is easy to use for full-time employees, contractors, and your HR team. Whether you're a major corporation or a small startup, Remote has the tools and resources to help you at a price you can afford. Even better, listeners get a special deal. Sign up for Remote today and receive 50% off your first employee for the first three months. Check out remote.com/pomp and enter promo code POMP to get started. If you hire employees around the world and you don't use Remote, that's not smart. I'm a huge fan of Remote. I think it's a no-brainer. Go check them out at remote.com/pomp and enter promo code POMP to get started. Next

• 1:27Anthony Pompliano?

  up are my friends over at BlockFi. I'm an investor, I'm a user, and I sit on the Board of Directors. I am very happy with them, and I think that you will be too. They provide financial products for crypto investors. Those products today include a high-yield interest account, a US dollar loan product that they lend out dollars against your crypto collateral, and a cryptocurrency exchange that trades with no fees if you use that exchange. They recently launched the Bitcoin Rewards credit card. That's right, it's a regular credit card. When you swipe, you get paid Bitcoin back rather than cash back or airline miles. You can earn up to 1.5% cash back on every single transaction. It's basically my favorite card at this point. It has some kind of psychological event. I just keep swiping my card.

• 2:10Anthony Pompliano?

  I want to keep earning Bitcoin. So go check it out at blockfi.com/pomp. Again, blockfi.com/pomp. Next up is Choice. They're rebuilding the way you approach retirement, which starts with making it simple to include Bitcoin and other cryptocurrencies in your savings. More than 20,000 Bitcoiners, myself included, have already signed up to start investing. Whether we're talking about crypto or stocks, Choice lets you trade real Bitcoin and Amazon in the same place, all without paying a dime in capital gains taxes. And if you want to hold your own keys all the way to the moon, you can do that too. Either way, Choice is on a mission to give you full control over your retirement savings. So head on over to retirewithchoice.com/pomp. Again, retirewithchoice.com/pomp. Again, retirewithchoice.com/pomp and sign up for an account today.

• 2:55Anthony Pompliano?

  And one more thing, you know how I feel about this, but if you have a pro that manages your money, don't take any of their BS. Choice has tools for them too. Take back control today and visit retirewithchoice.com/pomp. Last but not least are my friends over at Masterworks. You don't have to be a hedge fund guru to know that markets can rise and fall quickly. Remember Dogecoin? Sometimes the most attractive growth can be found in some of the oldest of places. Despite being hundreds of years old, the art market is poised for tremendous market capitalization growth. Deloitte project projects, I'm sorry. Deloitte projects the total wealth held in art and collectibles to expand from 1.7 trillion to 2.7 trillion by 2026. It's going to get larger. I attribute this to the rise of securitized assets opening the doors to the art market for all.

• 3:40Anthony Pompliano?

  Founded in 2017, masterworks.io is the leading platform for blue chip art investing with over 185,000 registered users. They've purchased over $180 million in art from artists like Banksy, Basque and Cause. I'm a huge fan of masterworks.io and have spoken with founder Scott Lynn twice now on the podcast. So go back and give those episodes a listen. You can check out masterworks.io today and skip the waitlist if you use promo code POMP. That's right, if you want to invest in art, but you don't have millions of dollars, you can do that now through my friends over at Masterworks. Big fan of the platform, big fan of Scott and the rest of the team. Go check them out at masterworks.io and skip that waitlist by using promo code POMP today. All right, let's get into this episode with Michael. I hope that you guys enjoy this one.

• 4:23Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 4:52Anthony Pompliano?

  All right, guys. Bang, bang. I've got Mike here with me. Thank you so much for doing this, my friend.

• 4:57Speaker 02

  Thank you. Thanks for having me, Pomp.

• 4:59Anthony Pompliano?

  Absolutely. Let's just jump right into Amber Group. Obviously, you guys have built a really, really big business very quickly and serving users in kind of unique ways. Let's just start with what is Amber Group? What is the products that you guys kind of present to the market today? And then how has it been going so far? What metrics can you share with us about the business?

• 5:20Speaker 02

  Totally. So Amber Group, in short, is an integrated crypto finance platform. Our slogan is your gateway to crypto finance. We provide pretty much everything under the sun as related to crypto finance. So global user base. If you look at the business, you can kind of think institutions, you can think of us as, you know, almost like a crypto investment bank or crypto prime brokerage where, you know, the hedge funds, VCs, the crypto companies, they use our services to trade, to invest, to do asset management derivatives, et cetera. Now, the second part of the business is more consumer facing. You

• 6:01Speaker 02

  can think of it as a crypto private bank or crypto private wealth manager where, you know, a individual customer could be as large as, you know, a billion dollar family office or could be, you know, a young guy, a Gen Z millennium that, you know, just got into crypto. Doesn't matter. The person can really, you know, enjoy all the services, almost the same kind of institutional grade services that we provide to the first group of customers via our platform, you know, so our customers can also buy and sell crypto with us. They can park their cryptos and stablecoins with us for a very attractive yield. They can do structural products with us. They can do asset management with us. They can do borrow,

• 6:46Speaker 02

  lending, payments, et cetera, all with us on the same platform in a one-stop kind of services way.

• 6:53Anthony Pompliano?

  Got it. And so when you start thinking about kind of this all-in-one platform that services everyone from institutions all the way to retail, what metrics can you share with us in terms of the user base, or the growth, or what products are most popular, volumes? Just what are you comfortable sharing there?

• 7:09Speaker 02

  Totally. So, you know, in terms of the customer base, right, on the institutional side, I think we have a bit over 700 different institutions that onboard with us that, you know, trade or do crypto asset management with us. These are, again, you know, the billion-dollar hedge funds, the multifamily offices, the crypto companies, projects, et cetera. On the other end, you know, on the individual side, actually, we only launched our product suite late last year. So it's only been nine months of the journey, but we saw a very fast adoption of our product, and it was very well received. So combining together,

• 7:49Speaker 02

  you know, now we manage around $2 billion of crypto assets for our customers. And also, you know, being one of the largest liquidity providers in the space, I think up to date, we have traded over $500 billion of crypto assets. On an average day, I think we account for 3% or 4% of the global crypto volume. In terms of the popular products, I think the most fundamental product we offer is what we call, you know, the Amber Earn or the Interest-Earning Account. Essentially, you know, our customers, they like to park their crypto with us because on the floating side, they get 3% to 4% annualized floating yield, which is very appealing. And there's no cap size on, you know, how big you want

• 8:34Speaker 02

  to park there. You wire that to our Amber Wallet. You enjoy that floating interest every day. And then if you are willing to lock that up for a longer term, say six months, 12 months, or any customized date, you know, 190 days to 157 days, up to you, you can get a much higher fixed-term deposit rate. So for Bitcoin and Ethereum, it can go up to 7% or 8%. And for Dollar Stablecoins, it goes up to 10%. So that is, again, you know, a very attractive fixed income kind of yield our users can enjoy with us.

• 9:08Anthony Pompliano?

  Why did you guys start with institutional services first? And then what was the impetus for bringing the institutional services to more of the retail market?

• 9:17Speaker 02

  That's actually a wonderful question and it ties back to, you know, the kind of the DNA of the company or the background of the team. The team was really started about four years ago by a bunch of more Stanley traders, Quants, Bloomberg system engineers. So our background was dealing with the institutions. So we knew how to handle them. We knew how to provide the services they need. And, you know, let's be honest, these are very picky customers, right? They are used to be serviced by, you know, the Goldman's, more than Stanleys of the world. So they require very high standards of professionalism, very high standards of product offering, very high standards of risk management, and we were able to deliver that.

• 9:58Speaker 02

  So, you know, it was very easy and very simple and natural for us to start initially focusing on the institutions. Now, why we ventured into global consumers was because after two to three years of servicing these institutions and really gaining their customer loyalty, they're very sticky to us. They keep referring other institutions, other family offices to us. We realized, okay, you know, we also have the technology DNA. We really know how to build technology. We really know how to automate things. Actually, you know, the firm really had always from very early days until now, about 70 or 80% of our headcounts always in some kind of developer or R and D roles.

• 10:40Speaker 02

  So we realized, okay, if we use that technology to build a platform to automate things, you know, we can bring the same kind of institutional grade services that was, you know, the big guy so happy was to all the global consumers. So we just decided to do that and we launched our Pro Suite. End of last year, we'll keep iterating our mobile app, our web portal. And we think this is what exactly what we are doing. We are now bringing the same grade of institutional level services to global customers through technology, through our platform.

• 11:18Anthony Pompliano?

  Yeah, it's absolutely fascinating. And also, you guys are one of the largest market makers in the industry, from what I understand. And so not only are you serving kind of institutional and retail, but by sitting in this kind of very unique position of the market, you actually have a lot of access to data and you can see trends and you can see kind of what's happening across the market. And so from that seat, what are some of the trends that you're seeing today that maybe people aren't aware of, or the things that have caught your personal attention and you think are either surprising or worth noting?

• 11:49Speaker 02

  Very interesting question. I think, you know, one of the things, you know, speaking from someone that's in Asia, that can offer, you know, might not be familiar to the Western customer base or guys in the West is that, you know, I think we noticed kind of the the timing or the shift of crypto adoption. You know, 2017, 2018, I think, you know, the most adoption of crypto was actually East led, you know, was China, Korea, Japan, you know, all the Asian countries that, you know, jumping into crypto with, you know, a lot of a lot of speculative nature as well, right? And then the market kind of quiet down in

• 12:27Speaker 02

  2019, early 2020. And then, you know, the March 12th or March 16th double dip happened in 2020, where, you know, I think a lot of the, a lot of the Asian miners that was, you know, overly leveraged got flushed out in that event. And then we started to see actually institutional adoption in the West. This is probably what, you know, the audience in the, or the crypto users in the West are familiar with, you know, all the, all the PayPal, or the Fidelity, or the BlackRock alike, they started to get into crypto, get into Bitcoin at least as an asset allocation. And what we noticed is there is a small lag. It wasn't

• 13:07Speaker 02

  until pretty much end of 2020 or beginning of 2021, when, you know, I think the crypto adoption in the West has already happened for about half a year, that, you know, Asian adoption kind of happened again, you know, and this time it was led by actually, you know, a lot more mature and sophisticated investors. In Asia, the family offices, right, uh, some of the wealth managers, they started to follow, you know, their, their, their, their Western counterparts and started to get into crypto. And I think, you know, uh, this kind of dynamics is really interesting from our perspective, because we have a lot of institutional flows from, uh, US, Canada, and Europe, et cetera.

• 13:49Speaker 02

  Now, we also see, you know, all the, all the, all the adoption, you know, all the buying, all the, all the, all the staking on the Asia side from these family offices. And I think, you know, this kind of interesting dynamic also gives us a lot of long-term confidence, because crypto is very resilient, right? We've been through, you know, roughly two cycles of ups and downs. And, you know, in every, you see in every, uh, bull run, there's actually always new money, new type of money that come into the industry. And, you know, then even in the, uh, in, in, in, in the sell-off or in, in the bear market, right? Some of those, you know, might, might become stale, but you, you see, you know, most of that actually stay, right?

• 14:32Speaker 02

  I mean, we've had a kind of a sell-off for the past three months, but I don't think, you know, the, the, the, the money that went into the market, you know, will, will exit completely. They might not be active for now, you know, they might take some market, market loss, but they're there for the long term now. So you become, you see throughout every cycle, the market become bigger and bigger. And then we see in our real eyes, you know, uh, crypto adoption is happening day by day in both market or bear market.

• 15:01Anthony Pompliano?

  What's fascinating to me is you described almost kind of a retail-led in the Eastern world, uh, early on in the industry. The West was kind of the second follower. In the institutional world, it was the West first, and now the East is kind of following. Um, and it would make sense, right? There's much, there's many more kind of institutions in the West and in North America specifically, uh, than necessarily in the East, but it's still fascinating to kind of see, uh, how one side makes a move of the world and then the other side follows, you know, kind of six to 12 months later. Um, and then you guys actually see it in the data. Are there any other insights that you think, um, are, are kind of interesting in terms of either East versus West, uh, or other things that you see, um, you know, through the, uh, the usage of the various products?

• 15:42Speaker 02

  Sure, I I think also another very interesting trend is, you know, again, you know, I think the market is becoming more and more sophisticated. I mean, the market started with, you know, very speculative nature, which is, which is fine, which is, you know, what naturally, you know, early markets are. But, you know, right now, if we look at our customer base, you know, I think they are getting more and more sophisticated. A lot of them, you know, are they, they don't take a lot of leverage, you know, they don't rush into a lot of altcoins, they don't understand. Instead, you know, they know how to, how to hold the, you know, the blue chips of crypto, you know, they, they, they, they put their assets in, you know, Bitcoin, Ethereum, the top tokens they like, the blue chip DeFi coins.

• 16:23Speaker 02

  They ask us for advice to construct those baskets, those indices that, you know, they want to hold a long term. And they, they know how to use, you know, uh, uh, structural products that we offer, right? I mean, one of the very popular structural products we offer with our clients is something called YieldBoost, which essentially, you know, is a, a option-linked structure that gives them the option to either accumulate Bitcoin or Ethereum at a lower price or discounted price over time, or give them a high yield that essentially comes from option premium. This is very popular among our sophisticated users, which are, you know, from these, you know, family offices

• 17:02Speaker 02

  to, you know, I think a lot of the, even the, the, the, the small retails, you know, after a while, they start to understand those products. They start to understand their own investment thesis and they utilize this kind of tools. So I think, again, you know, I, I think the theme here is really, I think the market is becoming more mature. The investors are becoming more sophisticated, which also means they are more long-term. Instead of trading the next hundred X thing tomorrow, a lot of them start to understand. Crypto is more about, okay, this is still a young industry and a young asset class, there's a lot of upside. The biggest upside come from getting in here and being this for a very long time.

• 17:42Anthony Pompliano?

  What do you see in the usage of different assets, right? So maybe Bitcoin, stable coins, and then the other assets. Are there specific things that you're able to kind of pick apart or understand as kind of industry trends across the various assets?

• 17:57Speaker 02

  Sure, I think you know now really Bitcoin as a investment asset or Bitcoin's own narrative is very widely accepted. And it helps with people now have, you know, like curiosity or interest to look at other crypto. Because before, right, you know, a lot of new investors were still asking about what Bitcoin is all about. Now, pretty much, you know, all the customers we talk to, right, they understand, oh, Bitcoin is digital gold. It's a storage of value, right? They get it. Now they are asking, so what is Ethereum about? You know, what's Ethereum, why is Ethereum different from Bitcoin? What are the other tokens about? What's DeFi about, right?

• 18:37Speaker 02

  And, you know, it makes our job a lot easier to explain to them because once they accept, they really mentally accept, okay, Bitcoin, digital gold. Then we can tell them, okay, Ethereum is kind of like, you know, the oil in a new digital economy. And they get that because they already accepted, okay, Bitcoin is digital gold. So it's easier for them to follow that train of thought and, you know, accept, you know, the narrative or the understanding of other crypto assets. And stablecoin, I think, you know, is a, it's a huge innovation in a way that, you know, I think it goes beyond what people understand at the moment.

• 19:17Speaker 02

  You know, I think stablecoin is not just, okay, you know, now we finally have something that's in crypto form, you know, that's stable against the dollar in value. So, so, so, you know, people are happy to park some money there and, you know, the stablecoin yield is a lot higher than fiat dollar yield. So there's structured yield pickup, which is a huge driving force for people adopting to crypto nowadays, right? But I think it goes a lot beyond that, if you think about it. Bitcoin, Ethereum, all of these are crypto-native assets. Stablecoins are not crypto-native assets. They're essentially traditional fiat or traditional assets that's got mapped into the crypto world, right, through blockchain.

• 20:00Speaker 02

  And this is going to be done over and over again as we speak. You know, more and more assets, they will be mapped into the crypto world, like dollar stablecoins, and they will transact against Bitcoin, against Ethereum, against other crypto in the same form. This is what we talk about when we say crypto finance. I think crypto as an asset allocation or as an asset is widely accepted. The next step for people to understand is crypto is way beyond that. It's not just an asset you invest. It's actually a form or a technology to revolutionize how financial services should be done. And the dollar stablecoin is such an example. You move the asset from the traditional world to the crypto world.

• 20:44Speaker 02

  You get a better structural yield. It's easier for payments. It's easier to transact. It's formless and seamless between different asset groups once they are all in crypto form. So that's why we promote. We're thinking, you know, by using crypto finance technology, actually, you know, we can service not just the crypto-native crowd. We can service not just the crypto-native assets. Actually, we can service, you know, all kinds of financial needs. We can cover all kinds of financial assets. Of course, you know, it takes time. The regulators need to get comfortable with it. But I think, you know, inevitably, the better technology eventually prevails. And, you know, I think we have real proof that this is a better technology.

• 21:30Anthony Pompliano?

  Absolutely. And when you think about kind of this crypto finance, is that kind of decentralized finance? Or is that something different? Like, how do you think of DeFi, regardless of where it happens from a protocol basis? How does that fit into your idea of crypto finance?

• 21:44Speaker 02

  So now, on this, I might have a slightly different view than, you know, many guys in the industry. I'm actually, first, I don't think decentralization and centralization is a binary concept. I don't think that. I think it's a scale, right? I mean, you can be extremely decentralized or you can be extremely centralized, but...

• 22:07Speaker 02

  Always, always, I think most of the time, we're somewhere in between leaning towards one or the other. Secondly, I think for crypto or for crypto finance to really adopt in a global scale. I think the industry, the participants, the users, the builders have to be open minded. And they have to be pragmatic on the centralization. Because, you know, I think essentially, we all know, you know, Bitcoin crypto started with with a fundamental thesis that centralization is good. And it is good, it's great, it eliminates a lot of, you know, a key counterparty risk, right?

• 22:49Speaker 02

  It makes things transparent, you know, a democratized finance, right? But there are also cases where, you know, either for practical reasons. Or, you know, for for for technology reasons that things can't be or would not be that decentralized. And it's fine, you know, if you take an extreme end of this is, you know, a lot of the central bank digital currencies. A lot of people argue with me, are they crypto or not? And I think they're crypto. Why? Because they they a lot of them are programmable. They can interact with Bitcoin Ethereum, right? Their ecosystem can interact with these decentralized ecosystem. So even though they are centralized, right?

• 23:33Speaker 02

  You can include them into the same system. I mean, if you really think about it, dollar stablecoins are not decentralized. Right? I mean, they use Ethereum as, you know, the base layer protocol, but the issuance and all of that is centralized. Right? So you have to have an open mind about this, I think, for crypto finance really, really, really to be big.

• 23:57Anthony Pompliano?

  I wouldn't take it even a step further. There are some decentralized protocols that claim to be decentralized that aren't, right? And by the way, there's plenty of maybe people who call centralized services that actually have more decentralization to them than they're led on as well, right? So it kind of works in both directions. But I don't think that you're necessarily sharing a perspective that is completely out of left field, right? I actually think there's some rational thought there. What about things like tokenized stocks? So we see FTX and others starting to essentially create synthetic stock exposures. You don't get governance rights and some of the things that you would get with the traditional stock, but you get all the price action, kind of one of the reasons why people come to buy or trade stocks. And so how do you think about that fitting into the ecosystem?

• 24:42Speaker 02

  I think that's great. I mean, the technology has always been there, right? I mean, you know, what you just described in traditional finance is like a CFD, contract of difference, right? I mean, this is essentially, you know, a bilateral contract to bet on the prices, right? I mean, it's great. You know, a lot of people, you know, all they want from a stock is its price and its price actions, the opportunity to make or potentially lose money, right? So, you know, that is easily done, you know, in crypto, because, you know, it's essentially, you know, one of the largest application of crypto is still trading, right? Or speculation. So I think that's the first step. That's a great first step. The second

• 25:23Speaker 02

  step, I think what's more interesting is actually moving the assets into crypto, right? Instead of just, you know, essentially have, have, have almost like, you know, I always give this example, you know, there's, there's a great trading book called The Reminiscence of Stock Operator, right? And it talks about, you know, the bucket shops, right? Where, you know, essentially, people trade on those bucket shops to speculate against the price. They don't really own the stock, but you know, they can trade against. So the CFDs, or you know, these, these, you know, synthetic, we call them synthetic stocks in crypto are essentially, you know, the bucket shops on blockchain, right? I mean, they're great

• 26:06Speaker 02

  for the first use, but I think what's really more interesting is actually move the assets onto crypto form, right? You actually want the whole thing. Because if you have the whole thing, then you can actually break it down. Right, you break it down to, you know, the, the, what we talk about price is essentially come most from, you know, the, the, the economic perspective, right? Then you have the voting, which is kind of the governance perspective. You have all of that, right? And if you really have the asset, you can, you know, combine different assets. You can, you can do structured products around them to create new assets, right? And I think that's a lot more interesting. Now, while we are not there yet, the technology, I think, is always there. It's really, you know, how do we? Actually, you know, I take that back. I think the technology to replicate the assets or put them on blockchain is always there.

• 26:52Speaker 02

  That's the easy part. The harder part, which we are working on, I think a lot of the guys are working on, is, you know, what's the technology there to, to, to solve the problem of transition? Transition both for, you know, for the regulators to get comfortable with that transition. Since moving from the traditional financial ecosystem to the crypto ecosystem. And also for the current stakeholders to be comfortable in that transition, right? The current shareholders, how do they understand? Once their stock is in crypto form, right? What does that do to them, right? For the ones who don't understand technology, who still custody the stock with traditional brokers, depositories? What does that mean to them, right? Do they lose any of their rights? Do the other guys get better liquidity and therefore it should be priced differently?

• 27:37Speaker 02

  I think all of these needs to be ready for this to be happen. And, you know, I think these are solvable problems. And, you know, we are trying to solve them. A lot of guys are trying to solve them because eventually we think, you know, the, the crypto finance form is a better form. It's a more efficient form. It will happen. It's just a matter of how and when.

• 27:57Anthony Pompliano?

  I completely agree. Uh, how do you think regulators respond to all this? Well, there's the synthetic stocks, the DeFi protocols, uh, you know, regardless of where it happens in terms of the actual technology stack. Uh, let's just, you know, fast forward 10, 15, 20 years and say, okay, it all did happen. How do regulators respond? What, what do you anticipate is kind of their, uh, their progression into this industry?

• 28:20Speaker 02

  I think you know, the regulators we interact with, I actually got to give them credit. I mean, they get the big things right. I mean, all of this is evolving too fast. If you think about the regulators, right, they are usually in an office of, you know, not too many people. Right, and they have many things to do. So, you know, unlike us, who really can, you know, dig deep into this crypto rabbit hole every day, they cannot. They don't have the luxury to, right? I mean, they might have a few guys to look at it, but you know, they just don't have the same resources to do so. So, for them, right, they need to get the most important things right. And for most regulators globally, I think they care about two things the most. One is, you know, AML, KYC, anti-terrorist financing.

• 29:01Speaker 02

  Basically, making sure, you know, this is not, you know, helping illegal activities or illegal money. Secondly, is to protect the small retail investors. And if you follow their train of thought based on these two core principles they operate around, you'll find that, okay, they are happy to, to, to, to not look at a lot of activities in crypto. Yet, because they think, okay, number one, if it doesn't break the first or second principle, there aren't a lot of, uh, uh, retails getting hurt there. Or, uh, you know, the, it doesn't involve a lot of fiat transactions and, you know, let me leave it alone for now and get back to it later when I actually can.

• 29:43Speaker 02

  What they care most is, you know, okay, so if this either, you know, involves, you know, a lot of fiat transactions, which, you know, they kind of have to, uh, deal with from, uh, from a global regulatory perspective. Or, you know, uh, if, if, if this, uh, if this, you know, will involve a lot of, uh, small average retail, they, they have to put a very harsh standard on it. Now, back to your question, how this will happen is, you know, step by step. I think, you know, the industry need to get regulators comfortable with these two things first. Do these two things absolutely right, right? Have the best technology and, you know, have the best protocol to make sure, you know, the AML, KYC, and all of that is done properly.

• 30:26Speaker 02

  And also, you know, design, I think the first part, I think, you know, people, uh, in the industry, players are generally getting better. As long as you put enough efforts on this, right? You tend to be able to do KYC, AML right, right? Unless you don't care and, you know. You're not willing to, right? But the second part is where it's a bit uh it's it's it's not as easy for a lot of industry players because you know by putting a lot of restrictions on things like leverage, you know, on, you know, having a higher standards of assets that you offer on your platform, right, you're protecting the end consumers, but you're also sacrificing a lot of, you know, potential revenue and profits. A lot of guys just are not willing to do that. They go for that growth first mentality.

• 31:11Speaker 02

  Let me make the revenue first. Let me grow the business first, then worry about, you know, protecting my customers later, right? This is, I think, what really, you know, is confronting with the regulators. Now, but you know, at the same time, I think the industry has evolved that, you know, there are players, there are large players even, you know, or or, you know, somewhat large players like ourselves, right? That I can afford to do both. We can afford to pick, okay, let's protect our end consumers. But at the same time, you know, I think we can still make good revenue or grow a large business based on these principles. And, you know, if more players really adopt this approach, you know, I think the regulators will will find this industry more acceptable.

• 31:56Anthony Pompliano?

  Completely agree. Uh, you recently raised a lot of money and achieved a billion plus dollar valuation. Tell us a little bit about the fundraise um and what you guys are gonna do with that money.

• 32:07Speaker 02

  Thanks. So for us, you know, the company is very, Amber is very fortunate to be profitable early on as a startup. I think the industry presents a lot of opportunity and, you know, financial services, you know, i- i- i- it's naturally, you know, a positive margin kind of business. Um, so the fundraise this round or, you know, last round in 2019, neither were about the capital itself for us. You know, it was really about to bring the right partners who can help Amber grow long term to to the scale that we really wanna be. We think in this industry, there's gonna be companies of scale of Google or Facebook or Amazon, right? We we try to become one of those.

• 32:50Speaker 02

  Now, you know, in 2019, it was about to bring the best, you know, crypto-native investors in the space, right? Paradigm, Pantera, Polichin, Coinbase, all these guys for us, right? This round is rather about to bring a lot of traditional names that can help us grow and can help us be known by, you know, non-crypto folks and non-crypto institutions. It will also help us hire a lot of best talents that are still, you know, somewhat on the sideline against crypto. So we'll bring guys like China Renaissance, Sequoia, Tiger Global, because these are household names for even people outside of crypto. So when we hire the person from, say, Tencent, from Google, right?

• 33:33Speaker 02

  You know, they don't just look at us as a crypto startup. They look at us as, you know, a tech company that's backed by these tech masters that, you know, that know what they're doing and have done their due diligence for them. Similarly, when we push our products to new customers that are still, you know, undecided about crypto or even have some skepticism about crypto from their previous experience or from, you know, the media article they see. Now they at least look at Amber's platform and say, okay, these guys, these traditional investors have done their due diligence. They've done the homework for me. So at least, you know, this is something I think that's legit and I'm willing to try. So that's really what helps. And of course, you know, no one complains about having more capital, right?

• 34:17Speaker 02

  So, you know, having a larger capital base will help us, you know, be more aggressive, even more aggressive in our growth. So we are very aggressively hiring globally. We're very aggressively pursuing, you know, licensing or regulatory setups globally. No, we're very aggressive in, you know, getting our names out, working with marketing and media partners, KOLs and all of that, to really push our products to our global customer base.

• 34:44Anthony Pompliano?

  Yeah, it's awesome. What are you most excited about looking for? Let's say the next 12 months, internally, the thing that you're either working on or you're focused on as a business, what's the thing that's most exciting to you?

• 34:54Speaker 02

  I think our product roadmap is very exciting. I mentioned, you know, we really try to be this integrated crypto finance platform and we think, you know, we can offer really, you know, every service category to the best, to our customers. And I think we will see that over the next 12 months with our product suite. It'll be very integrated. Right now, you know, we have an app and a web portal, right? The two, you know, are already linked and I think they will be further integrated. So you will have almost the same seamless experience, right? Smartly guided, you know, when you, when you, when you, when you do anything crypto, trading, you know, asset management, treasury, borrowing, lending, spending, you know, on your phone or on PC, right?

• 35:39Speaker 02

  And also, you know, another integration is between, you know, what we call, you know, the more C5 versus more DeFi services. Right now, if you go to our web portal, you already have, you know, access to DeFi products through our web portal in a easy, convenient to understand way, right? But, you know, I think the next step is really to further integrate that experience. So, so I think right now, the one problem with DeFi is still the entry barrier is a bit high, especially for folks who are not so familiar with crypto, right? We try to really lower that experience. So in the end, you know, it will be natural for our customer base, who might be very new to crypto, to, to have access to DeFi without even realizing it, right?

• 36:23Speaker 02

  And I think that's an empowering experience and that helps with adoption as well. So all of that will happen in the next six to 12 months on our platform. You have a lot more, you also have a lot more structured products. And these structured products are essentially tailor-made for different investment needs. The one I just described, you know, it's tailor-made for guys who wanna accumulate crypto, but don't wanna rush it, right? We'll also have, you know, index products for guys who wanna diversify their crypto portfolio, but, you know, it might not have the expertise all the time to do all of that themselves, right? There'll be a lot more of that. And I think, you know, I don't wanna, I don't wanna give too many spoilers. I think, you know, our users will find them on our product within the next six, 12 months.

• 37:08Anthony Pompliano?

  I love it. I love the optimism and I love the enthusiasm. Before I let you go, I've got three questions that you get to ask me. One, what's the most important book you've ever read?

• 37:17Speaker 02

  So, so the most important book I've read, there are many, but you know, a recent one is really, I love, I love Blitzscaling. You know, I think it's a really good book and you know, it really resonates for, for me as an entrepreneur, you know, I think, you know, what, what, what internet e-commerce has done to traditional finance with network effects with scaling is happening exactly with financial industry with crypto finance. So that book resonates with me a lot.

• 37:51Anthony Pompliano?

  What about your sleep schedule? Our friends over at Eight Sleep, they got me sleeping on this absolute ice cold thermo-regulated bed. I sleep like a baby now. What's your sleep schedule?

• 38:01Speaker 02

  So I actually try to be healthy now with, you know, two kids and, and everything, you know, I, I, I try to sleep, you know, around midnight, you know, of course, you know, crypto happens. So sometimes you know, you're up the whole night. That's, that's just part of crypto life. But other than that, you know, I try, try to, try to go to sleep around midnight and you know, wake up early so that, you know, every day, you know, it's, it's exciting to wake up because you know, there are so many things happen in crypto and we try to have a lot of things happen every day in the company. And you know, every day is, is just exciting to, to, to, for me to get up and get to work.

• 38:39Anthony Pompliano?

  Absolutely. I, I, I feel you on sometimes you just gotta stay awake. Things are happening. Last question, aliens, are you a believer or non-believer?

• 38:48Speaker 02

  I, I am a believer. In fact, I'm not only a believer of aliens. I am a belief of, you know, there's some form of a higher being that we might not understand, right? And you know, I, I'm not, and there's an interesting theory, right, called a big, a big simulation, right? And we are all being simulated world, right? I, I'm not saying, you know, I a hundred percent believe in that. But I think, you know, the reality might be some form that's close to that, you know, in a day, we could all be living in some system, you know, that's, that's, that's, that's programmed by an alien kid, who knows?

• 39:30Anthony Pompliano?

  I mean, that would be wild if that was true, but anything is possible. That's for sure. What one question you have for me to finish up?

• 39:37Speaker 02

  So, um, I, I think you've talked to a lot of crypto entrepreneurs, you know, crypto companies, right? Um, and over years, right? You've seen a lot of success and failures. What would you say? The, the biggest differentiation between the guys who succeed in the end to different scale versus the guys, you know, that, that have more setbacks and, you know, failures?

• 39:59Anthony Pompliano?

  I think the biggest thing is focus and delivering exactly what your customers ultimately want. Like it's super basic stuff, right? There's no magic bullet. Um, I really do think that it's just having the focus to understand we're in this business. Let's be the best at this one business and then we can earn the right to go into other business lines or build other products or do other things, but let's be the best at this. And if you're able to do that, uh, it, again, it gives you access to other things. So I think, I would say that's one. The second thing then is just you gotta build something that people want, right? Sometimes they know they want it. Other times you gotta build it and then they realize that they want it. Uh, but ultimately you gotta find that product market fit. And so, you know, some of that's

• 40:41Anthony Pompliano?

  more kind of art than science. Um, but, but I would say early, that's it. Just focus and build things that people want. And then you got a shot, not no guarantee, but at least you got a shot to, to build something big and valuable.

• 40:52Speaker 02

  I really, really agree with what you said, but you know, one, one add-on question, uh, just throwing there. Do you believe in, uh, do you believe good guys will win in the end? Or it doesn't matter?

• 41:02Anthony Pompliano?

  Oh, I definitely think good people win. It's a, it's a like an attrition game, right? And bad people, uh, especially people who build a bad reputation for doing bad things, treating people poorly, not paying people well, all that. Eventually they just kind of stopped getting phone calls. They stopped getting investment opportunities. They stopped getting, uh, people that want to work there. And so it's a kind of a death by a thousand cuts, more so than it's just like one single blow up. But, uh, but, but I'm a very big believer, you gotta do the right thing, uh, in order to have kind of a lasting, enduring career.

• 41:34Speaker 02

  Totally, totally agree. We believe so too.

• 41:38Anthony Pompliano?

  All right. Where can we send people to find you on the internet or find more about the business?

• 41:42Speaker 02

  Sure, please go to our official website, www.ambergroup.io, or feel free to email us, [email protected]. And we're very excited to talk to all of you. I think crypto is exciting. It's just an exciting day every day to interact with people who are interested in crypto.

• 42:02Anthony Pompliano?

  Awesome, my friend. Well, listen, Mike, thank you so much for doing this. We're definitely going to have to do it again in the future.

• 42:06Speaker 02

  Totally, I'd love to be back.