¶ Intro
Hey everyone. We're recording at Halburn's Access Summit at the New York Stock Exchange and joining me is Chris Russell, who is the head of Tokenization chief Information Security Officer at T zero Group. Chris, great to have you.
Thanks for having me.
Yeah, I'm excited to learn about T zero and all the great things you guys are doing. Let's kick it off with your background. Tell us about how'd you you know, where you grow up and how'd you make your way
¶ Chris' background
into crypto and working at T zero.
Sure, so my career started off and actually in the intelligence field. I was in the US Army. He was a human intelligence collector. They taught me Arabic, they shipped me over the Middle East for a decade. But towards the end I was doing some fun things and some of that was finding people with placement access to systems that we wanted to you know, have some information off of.
So the frequency in which we got caught, which was never, let me believe that this was probably a good good career to pivot into job security wise, because people are just really unaware of from a social engineering aspect, from an insider a threat aspect, and even from a tooling aspect what's going on with their networks and if they're really defended and what kind of information is leaving all the.
Time, and how did you first discover crypto and made your way into the industry.
So I don't remember the exact day or why, but I remember I was looking into mining crypto theoryum, bitcoin, whatnot. And I was working at a man detection response firm and every time I tried to load a wallet on or download something, the screen tools would just quarantine it and go, this is malicious. It would look at the peer to peer connections, you unsigned binaries and go, nope, this is bad. So I just piqued my curiosity of like, this isn't supposed to be a bad thing, Like why
does scurity tools? Like what are they looking at the heuristics? So I started looking at it from a security tool perspective really first and understanding that. And when I looked at it, I was like, this is this is kind of cool tech underneath the crypto piece, the back end infrastructure, how it networks, the way GATH works. So that was what hooked me. It wasn't the necessarily the crypto piece itself.
Oh absolutely, So give us an overview of t zero's
¶ tZERO Overview
services and the blockchain and tokenization infrastructure services you provide.
Sure. So t zero has been around for a while. I've been there for five years now and hit the scene pretty hard with tokenisation of private securities. It initially was digitally enhanced securities, heavily regulated broker dealer space that we live in, so they allowed like a digital carbon
copy of private securities being traded. But while I've been there, we've moved to a full service infrastructure for you know, regulated private securities, farting from transaging services to primary raises, to an alternative trading system and secondary trading and custodianship with our special purpose broker licensing. So you know, we're we're a place where you can modularly use one of those services or use it from front to front to end.
And what we're trying to do is provide other companies the infrastructure so they don't have to go through all the licensing headaches and the finer exams that we do, and they can just use our piece and plug it into their applications and offer it to you know, the rest of the world.
So what type of institutions are you using your services, and I guess the contexts in light of the complete change we've seen as far as the approach of crypto in the US.
So right now, we've a joint venture called Link with some other parties and it's a Treasury Fund redemption. It's institutional, but we're trying to take what we're doing with institutional partners and try and also find you know, similar retail
type products that we can offer. So ultimately, we're trying to get a multi asset platform where you know, retail, institutional, everyone can come, UH, have access to these private you know, private securities, trade them, get liquidity, moving it out with what kind of assets they want, and so a lot of transformations going on for the past couple of months since Alan took over as a CEO and UH, And I don't know if you've noticed it, but the past
three four months has been pretty hectic in the space and everyone's starting to I think, open up, open up the doors for interoperability, yeah, and connectivity, and it's really getting exciting.
I was going to ask you about that interoperability because there's so many chains and we've seen these issuers folks who are looking to tokenized assets. They're putting in on multiple chains, So are you supporting them in that way? And you guys select the chains you want.
Yeah, we really want to be chain agnostic. So we've talked to a lot of l ones and said, hey, like, what stands you apart, what's you know what, what would make you attractive for an issuer. So we get them the right right utility they want. The chain itself doesn't matter as much for us. We're trying to support all
of them, you know, as much as we can. So, yeah, they all have strengths and minuses, they both, they all have legitimate products have been built on them, and so our job really is just to make sure the assurers and the customers are kind of getting utility they want at the end of the day. And we can use any blockchain for that really.
Oh absolutely. So have you seen increased demand from institutions. It seems like there's a tokenization race happening. All the banks, these financial institutions, they all have a tokenization or crypto strategy.
Now, yeah, I think everyone's opening up their eyes of the fact that we all need to be interconnected in a way for this to really work for everyone. You know, Previously there's a lot of silos, a lot of you know, walled off gardens. These are my assets, these are my customers. And that wasn't really good for the customer, was it. You know, it wasn't really good for liquidity for anyone.
It wasn't good for blockchain, right. The whole point of blockchain is to you know, ease friction, not create more. And so I think, regardless of why the race is happening, the interoperability, the connections, opening up the walls and realizing we need to make it more seamless for the customer is just going to be a net positive for everyone.
You know, you guys are certainly pioneers in many ways, and digital ownership is something that's going to rise where people are going to put different things they own, insurance contracts and you know, even tokenized maybe rare artwork and things like that. Is that something that the folks you're working with are also looking to build the infrastructure to allow the average Joe and Jane to.
Be absolutely Yeah, we're seeing and we've been seeing for a while, you know, the interest in artwork, collectibles, entertainment, intellectual property. But there those are a lot of those are would say very specific issuances with a specific product
that the average investors like kind of wrapping their head around. So, as a couple people mentioned during the summit already, what we're seeing now is a lot of interest bearing treasury products, mutual funds, things that people I think can understand digest better as a more foundational piece of their investment. And then if this, you know, if where they invest allows them to look at these other interesting assets, that's what's
going to come. I think. Sorry, leading with the unique niche ones probably didn't serve the space very well originally for real world assets, but I think they're coming along and they're going to mix in well with the more traditional investments.
Yeah, and the education aspect is going to be big too, to educate the consumer what is this, how does it work? Why can you trust it? And you can even just have it on your mobile phone.
In a wallet exactly. And I think people want to interact with real world assets a little differently than bitcoin. Yeah, so the wallets need to probably have some work upgrades so that you know, you're you want to invest in a real estate token, whether prospectuses, you know, all the paperwork for this investment, is it all on chain Is it all available? Can you see it from your wallet or do you have to keep going to these different places to check on you know, that creates that friction
that they don't want. So we need to bring in the experience as much as we can. And it's a it's a lot of things for a lot of different asset classes. But when you just start bringing that into the investor's hands, so they feel empowered and they feel like they can make good choices on their investments right from their wallets.
Almost right. You know, as you were talking about real estate, I thought of the folks of chain Link because I saw them put out a dynamic NFT for a house and that over time, as there's upgrades and things being done to the house, it's automatically updating all the information. Well, this upgrade was done, this was changed to the land, and so on and so forth. I can't wait for that day.
Yeah, that's the kind of information and investors really needs to make informed decisions and understand. You know, if you can look granularly at what was built, what was put in the house, and you're like, you know what, all these appliances are ten years old, These are only ten rated appliances. There's fifteen thousand dollars specifically that I can calculate that are going to be needing to be upgraded.
You know, that's a you know, a simple example, but you know you can you know, again, real investors want to have that level of detail before they get in on things. And I think the uh, the transparency that the blockchain is going to bring in these regards is going to help them.
You know, we were talking earlier about interoperability and a multichain world. There's not going to be one chain to rule them all. Is it Also the same for wallets that these institutions, many of them already have mobile apps and the way to interact with customers. Maybe they integrate a web three crypto wallet and they educate their customers. The customers already have an affinity, you know, they love the brand. That's the way to bring in the millions or billions on chain.
Yeah, I think people have to have the mindset, especially if we're talking about self custody of bringing your own wallet. You're comfortable with your wallet, you know. Look, we're not good as society with passwords, are we?
You know?
And then we're going to do private keys and then we're going to make people have multiple private keys. We need to think about the end user, what's realistic. And if someone has a comfortable setup with meta mask, then we need to meet them where they are and let them have that connectivity from the walts they understand and are comfortable with.
Yeah, that absolutely makes sense, and I'm curious to see, you know, within the next five years, how that wallet system and ecosystem is built out. And if it's big brands like Apple or Amazon or whatever may be, they say, hey, you already have our app, We've integrated this wallet. There you go. But you can also we partner with this other company and you can use the same wallet for them.
I don't know, I could conceivably see that very easily. And I think I've already seen hints from major corporations about their in their tone into blockchain for that very reason. And it's not necessarily that they want to be the leader in wallets necessarily, but they don't want to not have that functionality on their application or device or hardware. They want to, you know, again, let people connect what they want, have it in one place and not have
to have some separate system. You know, it's about you know, it's about user adoption and keeping people on the apps, keeping people.
On the phone, right, Yeah, you don't want to cause more friction and they get frustrated and all that. I'm curious, after the Genius Act passed last year, are you seeing a lot of developments around stable coins and demand for stable coins?
Absolutely so, our chief legal off servan Ness Savino. Anytime something comes out, immediately digest it and puts it into terms that meatheads like meat can I can easily understand so we can operationalize it. And yeah, around three four months ago, I think the race to have stable coin, stable coin operability, and just again interoperabilion general has just
really increased. We've had phone calls with you, i'd say competitors in the past that were like, you know what, this hasn't really worked for everyone to have a closed garden. Let's see how we can just offer more to everyone and you open up your doors, We open up our doors and everyone benefits from that.
Oh. Absolutely, what's on your road map? You know, it seems like with market structure, it looks like it's going to pass this year. Do you anticipate a lot of demand and even more adoption.
Yeah, So regardless of which direction the regulators go, we're in a pretty good position because we started off with the regulated route of having all the you know, special purpose book radio licenses for custody and all these other options.
And if they lighten the requirements to custody and hold these things and create these things, we're still in a good position because that means we have more partners and more you know, rise and tide lift cell ships, and so our mentality is either way, we're we have a plan, and the plan is to be a multi asset platform that we don't necessarily they have to run everything. We don't have to be the crypto exchange behind it. But we want to offer to our customers and we want
to give them a good experience. So we're gonna partner with someone who can offer the things they want so they don't have to have a separate one more log in to another platform. So we want to you know, maybe there's a couple of different crypto platforms, maybe you prefer this one. This all requires works, you can't deliver it all in one ear. But the goal is to be a multi asset, to make it pretty seamless, to remove the friction, and I think if we can do that, then everyone really benefits.
Oh absolutely, Chris. I'm looking forward to the future updates around T zero. Thank you so much for joining me.
Appreciate it. Glad to be here.
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