We're joined now by Michael Lee, executive president at hash Key Group, to discuss the latest in crypto and a very big day in the life of cryptocurrencies. And Michael, I just want to start off by getting your view on what's been going on with finance and f t X and give us a sense of the significance of this moment, particularly in terms of your own business. Hi,
nice to meet you. UM Hashi Group. We are a Asia base UH blockchain and crypto company where one of the earliest and largest investor in the in the in the space has been active since two thousand and fifteen. I think a longer term vision has always been is a is a very innovative, new new technology that that can really check up how financial services and how commerce in general h will be conducted in the future. So we continue to be superb sort of I think optimistic
on the technology. It's health but as we all know, right um, and and you look back at history, you continue to have I think you're four in the market and then potential bursts of bubbles, and I think it's just part of the learning process of the market. UM. It's obviously it's quite sad, upsetting, UH and and especially for those involved, I feel quite quite uh, I stand
with them. But I think as the ecosystem though, the the the everyone is really learning from some of the lessons right that that we would probably come out from the fallout. The way we look at the this whole space UM is that ultimately, if you're running an exchange platform, you really there a few cardinal rules you have to follow. Right. First of all, it's client assets segregation, UM. You can never touch it. You shouldn't never touch a client asset
if you're a custodian UM. And that's the way we have run out of business. Uh. Under the the new the license regime in Hong Kong, there's a regulator regime that that's set up by regulators here. So we're required to ensure your asset us safe and we we will, and we shouldn't be using client asset for for for running leverage positions. Well, as you know, Michael, there is a certain part of this space that is pretty much functioning as though it's the wild West, so to speak.
There's very little in in the way of regulation. And I was struck by a note today from the Strategy just over JP Morgan Chase talking about the fact that crypto markets will be facing weeks of deleveraging from fallout of this crisis. I'm wondering whether or not we're already seeing that. And part of the equities sell off that we have seen is people raising money in order to
pay back or to cover these margin calls. Do you think that that's likely and talk to me a little bit about your belief on using leverage in in in the crypto space. I think, um, the this space has really developed over the last twelve years also or maybe fourteen, depending on how you counted. And I think the people who have been in this space have also have seen a lot of cycles, and I think there's a lot
of fear and Greek type cycle. I think what has UH and and the the I think technology has reached a stage where the transaction per second is very high and you now see this whole movement around work three where the technology is being used for real life use cases UM and I think that has attracted a lot of attention, and that's why there's so much attention around
the space. Every felt that they need to get in UM and I think yes, Unfortunately, there's some some probably a bit too much speculation, and when the speculation, there's always leverage. UM, I would hope. I mean, unfortunately, one of the things within this unregulated space is that a lot of the data has historically not been that transparent. And I think part of issues right now is how to ensure that this food transparency on how how things
are run. And this is quite oxymoronic in a sense because blockchain was designed to be precisely exactly exactly, so I've been perverted in some set I think by Unfortunately, if you are running fast grain business, people just made may have made some wrong decisions along the way and going forward to really need to relok at this. We
need to ensure this transparency in the system. And there's a lot of good news that's coming out over the last twenty four hours right people actually talking about, oh, I need to a lot of platforms that are now saying I'm gonna disclose my audited numbers. UM, I'm gonna use moco trees or a large proof technology to ensure that clients can confirm their holdings. I mean, this should have in hindsight, it is always in hindsight. Unfortunately, just
have been done probably a year ago. But I think people are so busy trying to win market share and really forgot Um. Yeah, so the basics right, Yeah, Well, your your company hash keys recently received full license to operate virtualizer trading platforms in Hong Kong. So how is the regulatory environment different in Hong Kong to the US and other markets? And can you see a lot more regulation, a lot more requirements for that transparency that you're talking
about coming down the pipe. Um. I'm not an expert on US regulations, but my understanding is all regulators globally, improper jurisdictions are looking at this because it's a very powerful technology get that can be level leverage and using good ways. But I think a lot of the problems that we're seeing are on these unregulated platforms that are I mean that that are set up in in in
jurisdiction that that really have real little oversight. And I think some of these platforms are definitely very well run um, and I think the founders belief in transparency and do a very good job in running it. But unfortunately there's no standard, there's no established standard in these regular unregulated jurisdiction and I think that's where well, Hong Kong. I think it's in some sense the regulators really taking a
bit of a slow boat. I mean there's been a lot of criticisms that all other jurisdictions have moved quicker, but Hong Kong actually, over the last two years have put in a very clear regulations around UM how these exchange should be run, internal klient, asset safety, confident interest, et cetera. And I think the US definitely doing the same thing, right. I mean, Gary Guess obviously one of
the smartest guy and most knowledgeable in this. I'm looking at this, the various regulators really looking at this UM. There's a lot of work for the regulators UM and and the space just moving so fast. But I would imagine people, Yes, there are basic ground rules you have to follow right or else accident the bad thing happened, or accidents do happen. Michel, very quickly, I'm gonna give you ten seconds to give me a target. Give me a number that you think is the floor for bitcoin.
Right now we're trading around sixteen thousand one. Oh, that's a very tough question. I mean, this is by no means investment advice. I mean, personally, I would take a number of round twelve thousand. Very good. That's interesting because that JP Morgan note that I referred to earlier as looking at a floor of around thirteen grand Mickli, thank you so much for being with sa Michael as executive president at the hash Key Group, joining us here talking about the latest in crypto