¶ Intro
Hey, everyone.
We are recording at Halburn's Access Summit at the New York Stock Exchange, and joining me is Rob Benke, who is the co founder and executive chairman at Helburn. Rob.
Great to have you, Tony. Thanks for having me.
Yeah, it's great to be here at the Stock Exchange, and you know, I'm really looking forward to the panels and all the great discussions. I would love to kick it off with your background. How did you end up
¶ Rob's background
co founding Halburn?
Sure?
So, I mean, I definitely I think at this point qualify as a serial entrepreneur. I've built a couple of smaller companies before in completely different world.
So right out of college I actually.
Started an organic food company, a salsa company actually, And surely as we were sort of winding that down. This was back in twenty twelve, twenty thirteen, so at the height of my CpG experience, we're in about ten thousand grocery stores around world, and then you know, it's just kind of it's a really tough industry to be in. But around that time in twenty thirteen, as we were winding that company down, a friend of mine told me about this thing called bitcoin, and I said, oh, that's
funny that scam. You know, what are you talking about? Like that PONDSI or whatever. And I went down the rabbit hole. And so my exceptionally tiny claim to fame in that moment was, you know, I'm I'm I'm always about learning. I'm constantly learning. The way that I actually learned the best is typically through audio. So I'm a musician as a as a fun hobby. I've always been, you know, playing drums and electronic music and such and playing that. And so when I fell in love with bitcoin,
there was no audiobook. So I actually created the Bitcoin White Paper audiobook that's on YouTube. And so that was in like late twenty thirteen that I launched that thing.
So I've been really into this space for a while now, and you know, had another company, had other jobs throughout the way, and then in twenty seventeen, you know, got you know, was part of sort of the Ico madness that was going on in that moment, and uh so I started a growth hacking and sort of growth marketing agency at the time, and then so that that company was called Token Agency. That was a wild moment where a couple of things happened there. So, first of all, that was my first real.
Taste of success.
I was able to bootstrap marketing agency to eight figures in revenue on one hundred percent of it and just sort.
Of grew it that way.
And throughout that time one of the big projects we were working with was so think about this. Twenty seventeen, I was working with the former Commissioner of the CFTC
on an asset back stable coin wow wild stuff. Shockingly, it didn't end up launching because of all the obvious reasons right, way too early and timing is everything right, But what happened was throughout twenty seventeen, twenty seventeen, twenty eighteen, I noticed that very big trend, which was, as much as we love this technology for what it's able to enable, all the all the concepts that that tokenizing things can can bring about, every single one of my clients kept
getting hacked. And it wasn't just one thing, it was just it was a myriad of different things. So of course there was a you know, oh we launched this big project end boom, No we don't, because you know, the smart contract gets hacked or you know, just just pure social engineering, right, Like you know, one of my clients they just got, you know, an invoice from a
vendor to change their bank details. They send one hundred thousand dollars to you know who knows where, And so it just happened left and right, and I realized that if if code equals money, well hold on. The only thing that matters in order to actually make this thing take off is cybersecurity and making sure that folks can sort of stay safe out there.
And so it's just left, right and center.
So what happened was, uh, put a call out to my network, met a friend of a friend. That friend of a friend is my now co founder, Steve Wallbrough. Turns out he is a world renowned ethical hacker. He's known as a Sans Fellow. So in this sort of group of you know, the Sands, one of the largest you know, uh, technical educators in the world for cybersecurity.
He's one of the guys that has what's called the one coin, So it just means that he's gotten every single training session and sort of the height of every single.
Training session there.
And when I met him, his penetration his team had just won one of the largest penetration testing hackathons in the world called NetWars.
So he's a first place run.
So I meet this guy and he just has all these accolades, and I'm like, okay, Like, first of all, I don't think that this guy's real, you know, I'm like, all right, this can't be this can't be real. So end up meeting Steve turns out, you know, certainly real, and we we realized. So I brought him in on a couple engagements with my clients and so as a marketing agency, the idea was, let's spin off a different branch and let's you know, let's do a cyber branch
and we'll call it Token Hackers. Wow, best worst name ever, Like, truly truly incredible. So throughout the year of twenty eighteen and nineteen, I realized a couple of things. First of all, you know, if you want to go, if you want to go fast, go go alone. If you want to go far, go you know together. So Steve and I vibed really well. We're sort of a Yinging Yang scenario where he's good at other things that I'm not.
So we teamed up.
We actually built two companies at the same time, and then COVID hit So like the moment that lockdown happens. We're working on two different things. So the first was what we then rebranded to Halborn, and funny enough, the second one was a fashion aggregation site, which I still think.
Is a great idea.
You know, you got to get the real realm, Poshmark and eBay and aggregate that all together so you can get some you know, pre owned fashion. Anyway, but the moment that Covid hit Halborne signed, it's very first customer. And it's fitting that we're talking about this today because that first customer was Nicey was the New York Stock Exchange.
So at the.
Time, at the time backed bakkt was a division of the New York Stock Exchange. You know, they were like the big name, right, So we had an opportunity. I said, put us in coach, like you know. It took us months and months and months of red tape as a two person shop to like get all the paperwork ready. And yeah, so we did our first pen test, you know, back then, and then I had a conversation with Steve. I said, look, I'm going to go and I'm going to sell so many deals this back in twenty twenty.
I'm going to sell so many deals, you're going to quit all your jobs and we're gonna have to make Calburn a full time thing.
And that happened all in the year twenty twenty and so it's been kind of crazy.
So, like you know, twenty twenty, by by the end of twenty twenty one, we were completely bootstrapped, never raised a single dollar for the company, and had seventy full time employees.
Wow. So it just goes to show.
You kind of like, you know, I think timing is everything as well too, Right, So we didn't know, DeFi summer was happening in that time, but it was happening during that time, right.
That's that's an incredible journey. And to have your first client being backed, I mean, that's amazing.
Yeah.
I kind of realized, you know, in when I was when I had the marketing agency, I put feelers out. I talked to all of our would be Halborne competitors in that time, because I you know, they weren't competitive with me at the time. And I realized immediately that no one knows what the hell they're doing, and if they do know what they're doing, they're very focused on like one specific part, but don't look at the forest
through the trees, right, and that was the market. I was like, okay, well, what if we focus on holistic security practice all of the things that can go wrong on chain, but all the things that can go wrong off chain. We saw so many hacks happening over the last couple of years that have nothing.
To do with smart contracts.
In fact, in a recent Holborn report that we put out, over forty percent of the top hacks that have happened in the space have nothing to do with smart contracts.
So if you're just doing smart contract.
On its all day, that doesn't get that doesn't get you secure, that doesn't stay safe. And so that's what we've been building towards ever since. You know, and what I would say is through that founding journey, when when the nicey is your first customer, I think we had a really big opportunity to say, Okay, I think that blockchain technology in tokenization is going to come. I think that we're going to completely transform financial services and we need to be sort of ahead of that and take
those steps. And so you know, it's it's very public now, so you know, I can talk about it, but you know, even back as far back as twenty twenty one. We were working with like B and Y Mellon and a couple of other larger financial institutions on you know, a number of different initiatives that they.
Were trying to do.
And so what I did was kind of an unconventional thing, which is, you know, I'm I'm I'm the Web three native in the group. I actually went out and we hired a CEO. So I went out and we hired Jacques Boujeong, who you know, I think you'll talk with
soon enough, and he's our CEO over at Halborn. I transitioned into executive chairman, and I've been you know, I haven't stopped, like I'm I'm still knee deep and everything that we're working on over at Halborne, and it's just been really exciting to can you continue to sort of ride the momentum and ride the growth that we've seen.
Tell us a bit about the services that you provide
¶ Security services for Institutions
and how institutions are leveraging. You mentioned smart contracts, but there are other avenues like social engineering and things like that.
Yeah, yeah, yeah, So you know, look, I think for better or for worse, we get lumped into the smart contract auditor sort of you.
Know, barriers there, right.
The reality is that since day one we've been focused on what is called assurance works, is security assurance work, which is really this world of pen testing, manual code reviewing, and if it's on chain, yeah it's a smart contract, or it's an L one, or it's an L two. And I think, you know, by us being a purely sort of ethical hacking operation, that's been able to bring additional sort of expansion opportunities, and we want to do
that in the right sort of way. And what we realized is a lot of the financial institutions we were working with, you know, great Halborn, Yeah, yeah, you can pen test what we're about to launch and so forth, so on, but we're years out from that, like we're not.
Ready for it yet.
So about two years ago we spun up an advisory practice and we said, okay, well we are the experts in the space, like we've built custody solutions, we know what to look out for, we know more about stable coins than most. So we spun up an advisory practice so when you start building, like, we're here to help. When you start to think about a buy verse build.
Analysis, should I should.
I go and get my infrastructure done by fire blocks? Or should I build my own home cooked thing? These are the things that we help customers with. So our advisory practice, we grew four hundred percent last year just in that division, you know, and look it's a big number, but it was also it was a small It was small the year before, and now it's much more sizable, more material now. And so that's really the division of
we do advisory and we do assurance. And so what that goes to show you is as early as you start to think about building in custody or stable coins or tokenization into your financial services, you know, company like
we're here to help along that way. And I would say that the alpha that you can go ahead and drop on this podcast that we haven't really talked about is that throughout the course of the last year or so, we you know, since the beginning, we've had a lab's division, a technology division, And I think that what's exciting is that throughout the sort of chewing glass and the sort of like running into roadblocks and Okay, this isn't working,
this isn't working, the last six months, something clicked and it clicked in a really big way, and so we will have a automated code review product out to market by the end of this year, and we're pretty quiet about it. I don't mind telling you about it or telling the world a little bit here about it, but you know, you won't see the marketing team talking about it too much. And that's because our internal team is starting to utilize it. There's never any.
World where AI takes over one.
Hundred percent of anything, but the human hybrid of you know, here's this piece of technology, here's the human component is what will always be our secret sauce. And yeah, I mean, so we're really excited about launching and building throughout that, and we've been picking up a lot of pilot customers along the way there.
And I'm assuming demand has risen incredibly with so many
¶ Institutional demand
institutions getting involved with crypto. I mean, you go down the Wall Street List right, Black Rock and many others. So are you seeing a lot of demand on that front?
I mean, in twenty twenty three, I would say that it was a tough moment for probably the industry too. But it was a tough moment for me to go to my board and basically be like, hey, look, we're only going to focus on financial institutions, we're going to be the Web three company, web three security company that doesn't focus on Web three security.
And it's like, what do you mean. So it's like, well, we're only.
Going to help financial services companies enable to the next digital transformation. So it's like, you know, like IBM, for example, considers digital transformation to be sort of like the you know, cloud is what people mostly think of, but then it's also AI and blockchain. So as financial institutions start to realize the power of tokenization, which it seems like they are now, you know, this is a thesis that we
think is the long tail right call. And you know, this is where you know, I would say three years ago, our enterprise business was two percent of all of Halborn.
Today it's thirty percent.
Wow, and we expect it to be you know, a majority of the business this year. And we're and and so you know, we're really excited. We're six years into building out this company. In many ways, I think we're just getting started. So yeah, you know, it's it's a
really exciting time. And yeah, to specifically answer your question, I mean, the institutions are coming, They're all here, and that's why that's why we threw That's why we put together Access frankly, right, you know, like is this you know it started off as positioning and then turned into reality. You know, it's it's about.
Positioning us and continuing.
To be sort of a you know, a thought leader in how financial services gets through this digital transformation.
And the digital transformation is going to take.
A decade two decades to still keep happening, so we want to be the ones to enable that.
So, speaking of adoption, we have the Crypto Market Structure
¶ Clarity Act
bill that's currently in the Senate is expected to potentially pass this year, maybe later this quarter or early Q two. What do you think the impact will be of that bill passing?
Will accelerate the adoption, Yes, it will accelerate the adoption.
I think that there's a bunch of you know, there's just.
Trillions of dollars of capital and the sidelines kind of waiting for regulatory clarity. You know, of course it's you know in it a clarity act is good branding, you know, you know, it's definitely good branding. I think that the devil will be in the details. And you know where we're at today filming this this interview, there's a lot of uncertainty as to when and how and what it
looks like. So again, the devil is going to be in the details, right, So we'll say, and and look, whether it takes another year or two to actually happen. I don't think that part necessarily matters for what we're building towards at Halborne. But will continued regulatory clarity help further the industry, Yes, in a in an incredible way.
I think the Genius Act was so necessary. Uh, it was really exciting to actually get that bill passed through Congress, and it's it became a bill, right right, And so that's why you see so much stable coin technology taking off right now. So you can only imagine with clarity it kind of cover everything else. Of course, it covers you know, stable coin yield, and that's that's the that's big, that's the big spicy topic, right. So I can't weigh in as to where where you know, where that pendulum
is gonna swing. I have my suspicions that the banks are probably gonna win out, but I don't think.
That that's a very spicy take. But we'll say, you know.
Yeah, yeah, it's an exciting time and you know, I've been here since twenty sixteen, and I remember twenty twenty two into twenty twenty three being a rough time. We were talking before the recording, I thought of potentially leaving the industry. But things have turned, you know, done.
A one eighty not that you're sticking around.
Yeah, it's so exciting, and I feel folks are heads down building, they're not worried anymore, and it's just a good time. There's great momentum.
Yeah, there's a there's an incredible amount of momentum. I mean that moment in twenty two and twenty three was was was pretty incredible in a lot of ways.
I mean, look, I don't mind.
I don't mind even I talk about it privately, I don't mind talking about it publicly. You know, Tara Luna was twenty percent of Holborn business in twenty two. You know, there was a lot of people in the web three space that were very bullish.
On that concept.
Turns out they never had a security issue. It turns out their economics were wacky. Yeah, you know, so you know, so that was definitely you know, more of a like a crazy moment, but you know, we but but it also shows you sort of the world of security, how necessary it is.
It just shows you sort of the.
Resiliency that this industry will continue to remain. Now momentum is interesting as well. So I've been having some conversations with some folks in the industry about whether or not the last ten years of all of this decentralized building, all the VC dollars, the billions of billions of dollars that have been poured into VC and startups, whether or not you know, the big banks are basically just taking
it and running with it. You know, the real value a crew, you know, a cruel is probably going to be coming from the Black Rocks and the JP Morgans of the world, because they're going to take these open source, you know, code bases and use them.
For for what they're what they're what they are for.
And I don't have an opinion as to whether or not that's good or bad. I just think it's an observation of where things are and also sort of how things have always been. So, you know, we're we're excited by the momentum of how banks are accepting of this technology. Obviously, there's also quantum and AI sort of involved throughout throughout all those threads. But finally we get to a point
where twenty four to seven trading is about to be enabled. Yes, you know, NASTAC announce that'll be twenty four to five right away, right, instant settlement, you know, T zero you know, and programmable money, smart contracts like these are the things that we've been talking about for the last decade. Yes, like oh you know, this is this is you know, why why can't I send a USDC over to someone in Argentina like that, you know, instantly? Like why hasn't
that taken off? Where we're at today in twenty twenty six is we're here at Access Summit Western Union and Swifter in the audience.
Yeah, crazy, incredible, incredible.
Yeah, you know, going into this year and we're already you know, middle of January here, what would you say are to top three threats from a security standpoint for institutions participating in crypto? And I know that can fluctuate an EBB and flow, but oh boy, yeah.
That's a big one. Top three threats.
So what I've learned being in the security industry now is the biggest threat of every organization are humans?
People?
Yeah, people, It's social engineering all day every day. So you think about some of the biggest crypto hacks and even some of the biggest bank banking hacks. You know, it might be you know, you might be told that it's now where or sort of like a fishing you know, fishing is you know, social engineering as well, like you know, convincing someone to click on this link and download this thing and so on. And I think that that will
never change. Convincing you know, a low level person inside of a company that might be not making as much money as they would.
Like, Hey, under take this.
Yeah, yeah, take this envelope of cash and look the other way and just leave your laptop open here.
Like that stuff is real.
It happens all day, every day, right, and it will only continue to matter, you know, in a in a big way. So that's that's one another element that I think is big. Is I mean, as institutions start to adopt this technology stack, there will also be one of the things that we help customers with is how they set up their custody infrastructure. Right, so you know, if you're a big bank, you have X. You know, let's just talk about bitcoin only for a moment. Okay, we're
not we won't get into many others. So just bitcoin custody, right, you have a key ceremony where you're talking about where you know, where you're setting up your custody infrastructure. In the security industry, it's called a wrench attack, so you kidnap a wrench attack?
Is this idea?
I think it's called like a five dollar wrench attack. So the the idea is that you can take a
five dollars wrench. If I go up to you, Tony and say give me the private keys, You're gonna give me the private keys, or I'm going to hit you with a wrench, right, So these are you know, I think, oh geez, you know there was a company in Canada, Chinese, a Canadian crypto exchange, so I can't recall at the top of my head, but they had they had a wrench attack with the CCO and he was threatened to get you know, and so they he luckily got out
of that situation. But there's been some there's been some really bad situations more recently with that. And then third, you know, you can't talk about these things without talking about smart contract risk.
Like, great, you're going to issue a stable coin on ethereum.
Awesome, here's a laundry list of things that if you write the code poorly, it goes bad for you. And I think that there are dozens upon dozens upon dozens of security risks involved with putting anything on chain. So one of the things that we did today at our summit is we released a stable coin risk framework because the way that every financial institution looks at determining risk
on assets has everything to do rightfully. So with the financial sort of efficacy, you know, that stuff goes back to the nineteen thirties with like the book, you know, security analysis. But now as we enter to the modern paradigm with using DLT, nobody's talking about the technical risk that everybody is taking on now. So is this stock equity? How do you determine that risk on just the financials?
But hey, that stock equity.
Is now sitting on an ethereum public main net. Yeah, and nobody wants to talk about the fact that that contract is a little wacky, or that that contract gets upgraded every six months and who's checking that. So these are I know, I'm going way past top three, but these are just the things that that we think about and keep a lot of folks up at night.
So well, no, I appreciate that insight because security is such a core component or pillar for this acid class to grow and mature. You mentioned, you know you have
¶ Roadmap
something on the roadmap for this year. Is there anything else you want to highlight that maybe upcoming?
Yeah, I mean we're announcing. I'm announcing in a in an hour. Uh So this time last year we were appro We had some folks from Salona Foundation in the audience and I had a conversation here and I was like, why is there no ARC? I think it's I always mess up the numbers.
Excuse me? Like the ARC thirty six, forty three.
You can go, you know, google me, so for you know, it's the RWA tokenization sort of ethereum standards. Yet like why doesn't that exist on Solana And they're like, well, some people have tried, but maybe you should take a crack at it. And so we worked with uh, you know, Solana's Foundation supported us in our efforts to then go and work with a panel of industry expert So we
put together security panel. The long story shortage, Today we're announcing the launch of the Solana Security Token Standard SO S S t S dot org SO that's what we're announcing today SSTs dot org.
Go check it out.
Uh.
And that's really fun, you know, like these are all What's fun about this moment for Holborn is we get to sort of build the building blocks that are going to be around for the next twenty thirty years, maybe one hundred years, and so we're creating the standards and the frameworks that a lot of these folks you know, can sort of take bits and pieces from and then go utilize it. So so that's really exciting too. We're a big you know, look like we're not Maxi's in
any particular division. I think the market can tell us what the market wants to do, Like if you want to build, you know, want to issue something on Ethereum made net or issue it on Solana. The trend that we're obviously seeing is interoperability. They're not pick in one chain, right, they're picking. They're diversifying on like five to six chains, seeing what works, seeing what doesn't.
And going from there. So I'm excited to see that as well.
That's awesome. I saw Nick Dukov of Aslana Foundation moving running around, so hopefully I'll get to chat with him later. But Rob exciting stuff. We're gonna have to do round two since you are in New York and I'm in New York.
Hey, sure, hey, sure, Tony.
They will plan it with some of the announcements. But thank you so much for joining me.
Hey, thanks for having me. Appreciate it. Cheers.
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