The good thing about bear market is a lot of hype goes away, you're talking to people who are all serious, that's all that's left. We're really serious. And the other piece is like, looking for product market fit like a lot more conversations very much focused on product market fit, as opposed to the next hype thing, which again, we see in traditional tech all the time. And so I think laser sharp focus on what people want to serve and solve problems for people that's good.- Chia Jeng Yang
Chia is an Investor at Pantera Capital, one of the first institutional investors in crypto. He was previously Principal at Saison Capital, a FinTech-focused venture capital fund
Previously he was the fifth employee for Antler, the leading global pre-team venture builder. He also both invested and launched markets for them in Europe. He was also at Rocket Internet where he helped build out an eCommerce company in Pakistan and Sri Lanka that was bought by Alibaba.
He also angel invests in the marketplace and consumer startups in emerging markets like Indonesia, Bangladesh, and Egypt. His educational background includes a law undergraduate degree from Cambridge. He likes indie music, and hiking and writes about venture capital on his website, which can be found at www.chiajy.com.
Jeremy Au: (00:29)
Hey Chia, good to see you. We scheduled this call to try to do a more regular thing and catch up. And in that month and a half that you scheduled me out for because you're such a busy popular person it turns out that unfortunately, we had some fantastic meltdown news terrible for crypto industry but great from a timing and podcast perspective to obviously talk about your subject matter expertise, which is crypto, which you have gone all in for. So I want to welcome Chia. Actually a fantastic FinTech and crypto VC. Why don't you introduce yourself a little bit, Chia, into your own words for like a minute?
Chia Jeng Yang: (01:06)
Thanks for having me again, Jeremy. It's been a very, very crazy time been on here for a few times. But for those who have not yet, kind of know me, I am a crypto investor at Pantera Capital, which is a crypto hedge fund of funds institutional investors into crypto since 2013. We've been very early in the scene. And before that it was a FinTech investor in Singapore, dealing with all your very traditional FinTech investments. And before that was helping to build ecommerce companies,working at Rocket Internet and in places like Pakistan, Sri Lanka, etc. And before that has gotten a Law degree. And so intersection of crypto and law is something that has popped up recently, because of everything that's happened to FTX, which has come to as a huge surprise, I think, to the industry, and obviously very disappointing actions that have been taken and reacting to all of what's happened over the past couple weeks. So good timing, Jeremy, and happy to chat about this.
Jeremy Au: (02:10)
Let's describe it in the short words what actually happened for those who somehow haven't seen the news in crypto, or heard something about it, but don't really know what's going on or they think something unfortunate happen? How would you describe in your words, Chia, like your tweet of what happened?
Chia Jeng Yang: (02:25)
Essentially, what has happened is, fundamentally, there has been a misuse of client funds, as per the terms of condition and really kind of the rules of any exchange out there? When you deposit funds into an exchange and you use those funds to trade, the exchange should be only focusing on making money by taking a percentage cut of transactions, and you shouldn't be taking your funds and going to lend them out or investing in other things. Because they are fundamentally, the client’s funds, and through a series of kind of different actions, and also through a series of very poorly managed systems plus what appears to be a fraudulent backdoor accounting system that was in place to hide some of these transfers. Client funds were essentially used to invest in a whole bunch of different things to pay out to different employees and founders for a whole bunch of different transactions. And people are still trying to figure out what they were for, with the end result that essentially $8 billion of credit funds have been lost, including a significant number of fibers from retail depositors, which is obviously the most serious to institutional fund managers, to projects, working in crypto. And it's essentially hit basically almost every single person with a lot of cascading effects as these losses are started to be borne by institutions and other actors in the space.
Jeremy Au: (03:51)
So misuse, fraud, and of course, I think a collapse of some of the intrinsic value as defined by whatever they were trying to do here. So a huge mess here. So there have been people who said, Jeremy, this is an unfortunately a hostile action. Misunderstood young person flew too close to the sun, got screwed by crypto, macro, headwinds, and obviously hostile action by other crypto players, like by Binance and CZ etc. What's your response to that? Was that any grounds to that? How do you think about it?
Chia Jeng Yang: (04:26)
This whole thing was precipitated by the fact that CoinDesk released the report about the balance sheet being insolvent, and then that was going to be followed by no one really can say, of course, for sure exactly. Why it's either what he did, but I think what his facts is, CZ then went on to say that he wanted to liquidate the FTT holdings and to sell that in open market, which caused part of the crisis of confidence in the books of Alameda. Some people's say there was part of the war that they were having, some people said that he was just responding to CoinDesk insolvency report. Those are the facts of what has happened. I think, regardless of the pressure that was having FTT. Fundamentally, if an exchange as per their own terms and conditions, we're not touching the client's funds, essentially, they would not be in solid because the client’s funds will always be there. They're essentially the custodian, and they are not kind of trading on the basis of that. So it's very clear, despite everything that. Fundamentally, there was a breach of the terms and conditions, there was a breach of what people who were depositing money signed up for, how those funds would be used or how they were missed use. And I think that's fundamentally at the heart of the current crisis.
Jeremy Au: (05:47)
That lines up with what I think. And I always share that Bernie Madoff, obviously, he was running a Ponzi scheme. He was misusing client funds and so forth. But obviously, he only what came to light when there was macro headwinds, when the water was rising, nobody tried to cash out and everything was fine. So you can't really say the economic crisis caused Bernie Madoff's collapse. It was more like the fundamental cancer that was really there eating away at the fundamental dynamics of it. So I think what we're going to turn to, obviously, is that I think there's a lot of people who are interested about trying to understand Southeast Asia's role because the news has primarily been from an American perspective, and to some extent, maybe a global perspective in aggregate. But what is Southeast Asia's exposure from your perspective at a high level to obviously, not just to FTX, but also perhaps other the other similar crisis moments I think we mentioned earlier, like Tracy, and obviously Terra Luna, but why the links within Southeast Asia and the first order basis?
Chia Jeng Yang: (06:45)
It's really fascinating. I think Southeast Asia holds a place like no other, because you have the interplay of three different things. Personally, I'm not trying to draw any conclusions from this, but we've had three $10 billion blow ups in crypto, and all three of them were linked to Southeast Asia. So, Luna is based in Singapore, Tracy was based in Singapore, and FTX was born out of Hong Kong. And so we somehow have this link to the biggest crisis’s and disasters that have happened in crypto. So that's one thing to bear in mind. And second thing to bear in mind is that, I think the approach that we've taken, and I'm not going to make comments on whether or not it's good or bad, but I do think there's some soundness to where we focus on institutional adoption in Singapore and we try to attract crypto companies to build. And I think that fundamentally is a good approach. I think, we should be encouraging companies who are interested in building new things, and crypto to continue innovating in space. But unfortunately, I think part of that has also meant that some of these companies that were licensed or were supported, also had ties to Singapore, South Asia, etc, with FTX, I think being one of the latest examples. And so that's that second kind of institutional focus angle to think about. And the third thing is also something that I'm also pretty bullish on now is that Southeast Asia has been one of the regions with the most amount of consumer adoption for crypto. I mean, we look at Philippines, Vietnam and some of the examples of consumer adoption of crypto. And that's happening in the backdrop of what's going on the institutional side, as the days go by more and more bullish on consumer adoption of crypto because the whole point of consumer adoption is to really abstract away the Blockchain, to abstract away crypto to the point of the people interacting with them don't know that it's fundamentally crypto. So I think why I'm believer, for consumers, the industry right now is dealing with the fallout of what's happening. And yet no consumer crypto is going to keep advancing, it's going to keep building products for consumers, abstracting that Blockchain away. So almost in a way kind of move away from the stigma from people consciously using crypto, consciously interacting with things that they may not fully understand the way that we see defy and finance and on the institutional side of things. And so I think Southeast Asia was always in this really interesting place because they have this interplay that I think no other region has. So it'd be really interesting to see how that all pans out.
Jeremy Au: (09:11)
Let's double click on what would you see are the links between Southeast Asia in all three of those things we mentioned? So I'll start first, I think Temasek has had to share that he had a write down a $275 million investment in FTX that they invested between late 2021 and early 2022. So I think that's one direct exposure. Obviously, there were a lot of Singapore retail investors that had invested in the FTX international exchange. I think Singaporeans formed one of the largest groups by nationality. They were affected, I think in a recent audit, but unfortunately, another way of saying it is that Singapore isa much smaller population compared to many of the other countries. So haven't done the analysis to understand how many number of Singaporeans had exposure, but definitely I've met in person folks who have had Bitcoin or other assets still frozen on FTX platform, including this last night. So what else is the other links that we have? Unfortunately, I think this year is a train wreck that has been happening in slow motion?
Chia Jeng Yang: (10:11)
Retail trading exposures were high. I think Singapore and many other Asian countries are at the forefront of crypto adoption. I think as a result, when you have an incident that affects crypto in a negative light, chances are you're gonna have an outsized impact on current users who are more adopt to this and not going to sugarcoat it. There's a lot of very experienced people who did get hit in this kind of FTX incident. I think a lot of this was frankly, very difficult to have caught. You've seen in the press, how there were backdoor algos and mechanisms designed, specifically obfuscate detection. And so I think a lot of this from the investor side is very unfortunate, of course, Pantera, we never invest directly to FTX. But I think that that's something that is just really unfortunate for a lot of investors involved. I think you asked about other exposures, I think the good thing is that we have a lot of people who spent a lot of time in crypto in Southeast Asia, and who also exposed to different parts of it. I think there are many kind of interesting consumer use cases that are being explored and that have adoption, and we'll continue to see that for sure. And so a lot of those projects, customer discovery processes, are really fundamentally not very affected by what directly happened by FTX. So we'll continue to see progress on that side, we'll continue to see progress on the infrastructure build out. But I think fundamentally, we have a lot of institutional funds who are in Singapore, based in Singapore, a lot of them have been affected. And so that's something that we'll continue to see unravel, gave more clarity, as can damage reports continue to flow in.
Jeremy Au: (11:55)
I think we saw that. We had Dogecoin in Singapore, after kind of like the Terra Luna crash. Obviously, capital was based in Singapore as well. So I think there's like you said, there's that unfortunate capital and people links with all these. And I think also look at more broadly as well, I look at Southeast Asia as a whole. I think there's also a lot of crypto exchanges, I think that really borrowed a lot of inspiration, I would say, in terms of their business model, hopefully not from the financial fraud and internal controls. I think, from the US principles. So they were like kind of like saying, our job is to clone and localize for that approach for different sub markets. So that's been one approach. I think we also had Hold Or Not actually not I mentioned it, there's also another Singaporean company that imploded unfortunately, after being kind of like the entry ramp for retail consumers to unknowingly from their perspective, actually be entering the Terra Luna ecosystem. And I think we see that more broadly in Thailand, we see in Indonesia, I think we see this broader ripple, like you said earlier retail investors who unfortunately have lost capital. And I think from my perspective is, I think it's because of two big reasons, or even three. So I think the first is that, I think local ability to invest on stocks, and all these public markets and so forth, unfortunately, is hard. In many of these markets, I think not everybody is like the US where you have Robinhood equivalent, as I think there's been a big push or desire by retail investors who are reading the news to join all of that. The second, of course, I think, obviously, Southeast Asia, unfortunately, is still obviously has a lower GDP per capita, or is lower income than the US and so they're not accredited investors. So they're also not allowed to trade many of the sophisticated financial instruments, even if they could get access somehow to a US bank account, or instruments and so forth. So I think they are, to some extent, find that crypto is only place that it can easily get in of a smaller ticket. And I think that that, of course, is how we talked about is that the population across Southeast Asia is young, millennial, Gen Z. So you're obviously reading news, they're very much plugged in from my perspective. And also aspirational, they would like to build out their life savings to be able to raise families and so forth. And so they find that they're in crypto. And I think that's a story I hear quite a bit in Malaysia and the Philippines this is like in other words, I can qualify for a trading account. And if I could create a qualified trade account, I wouldn't be able to do the stuff I want to do anyway. And this is the only hope I have for a better life. It's such a shame. I think that that hope is like totally divergent from the actual financial returns at least over the past one year, or even over a broader period of time. What are your thoughts about that? I mean, do you feel like that's going to change? Do you think that more mainstream people, middle class folks continue on them? Do you feel like regulators will feel like they have a responsibility to regulate or protect? How do you see that playing out?
Chia Jeng Yang: (14:51)
I think maybe three reactions. So I think the first thing which is important to note is, frankly, why join the crypto space in the first place, which is I fully believe that being able to access global permissionless economic layer is something that is fundamentally useful for people. I think that the financial value chain has a kind of different obstacles that are unnecessary, that restrict people from accessing the kind of margins that we see middle men in financial value chains accessing and profitable very handsomely. I'm deeply passionate about the ability to get there. But that being said, I think it's definitely irresponsible to not see that crypto at the moment has a lot of pieces of it that is being misused. And that sometimes with what we see with centralized exchanges, centralized entities within crypto, you can have the worst of both worlds, where there's no recourse, but there's also no regulation. And so there's no transparency behind the whole thing. And that's exactly describing FTX. And that's exactly describing what has happened here. There are I think, two ways to take this. One of the ways that I spend a lot of time is also looking at DeFi. DeFi is by definition permissionless, it's transparent. You can understand what's going on. I'll also point out, a lot of the DeFi protocols that were up and running barely even made a sound like Aave, Compound,Uniswap Sushiswap fundamentally, because they didn't help cause whole custody of your funds. The contracts were battle tested. And so the fact that like to use is, last week, the entire crisis Aave and Compound didn't even tweet. And I was on Twitter, a lot during that week, just trying to catch up on news. So DeFi and parts or crypto do hold this promise for people where you rely on self-custody, you rely on trusted cryptographically protected tools to help you further financial independence. And so that's good parts of crypto that I want to focus on. I want to focus on growing, I want to focus on making sure like more and more people have access to that and that safe and that helps. Without forgetting the fact that there are some really bad things in crypto that have happened. And we can't forget that and should be a valuable lesson for anyone building that this is terrible and we should avoid that. And I call that out when necessary. I think there's also I've made this post publicly, I think there's a lot investors and founders, also throughout tech, non-tech, whatever, but also in crypto where you can't criticize, when you find out you can't criticize, it turns out that this whole thing was something that was about to explode. So accountability, responsibility, focusing on the good things of transparency, those are the things I want to focus on. Now, on your point of regulators. I think that's the other route I see kind of crypto going, which is that we're going to have DeFi, it's going to get safer, it's going to be better, but regulators also need to act because they will feel compelled to. And I think unfortunately, we can see a clamp down on a lot of crypto, I think that were a lot of opportunities from new ones may be lost because of what's happened here. And it kind of does behoove people in the industry in crypto to try to talk through some of these points, and make sure that new ones doesn't get lost. And that sometimes some of these centralized entities are terrible and terrible for crypto, they’re terrible for retail investors. They're terrible for regulators and terrible for everyone. And so I think we need to not lose sight of what's potentially good, of course, is our fact that many people are just not going to want to take the energy to understand the new ones. And I think that's very fair, because all they see is all these negative headlines or people losing money this that. And I think that's a very normal reaction. One of the jobs I like to do is to say, hey, look, know that good things were crypto, they are working, we've seen them work, and they're working right now. We can use them. And here's how to think about those.
Jeremy Au: (18:53)
Awkward reality is that I think we use a lot of buzzwords or DeFi and all these other things. But at the end of the day, when you boil it down to it, these are like US and Singapore domiciled companies doing plain old fraud, conflict of interest, regulatory fate, internal regulatory in oversight and risk management drops. And the awkward reality is like, so who's incentivizing that? Obviously, I think there's a big push. And I think there's a lot of internal industrial championing of self-regulation. Unfortunately, I think Sigmund Freud, who was also like the one of the biggest champions of self-regulation, but also to some extent actually advocating for some regulator action as well. So I think that hypocrisy at that level has really kind of stunk up the whole place and cause a lot of confusion because in some weird way. He was the most supposedly pro regulator, a pro US regulator, maybe perhaps in lobbying, but also in terms of engagement, speeches, dynamics, even representation across the table. And so I think there's a lot of confusion about what the approach is. I think my personal point of view is that at the end of the day, I think the same fundamental fiduciary standards apply to everybody. At the end of the day, I think that a company in Alameda research lend a billion dollars to the CEO, and half a billion dollars to his head of engineering in a shot saying, so I can't think of many companies in the world, if any thing that ever lend that much money to their own executives, if that makes sense. And I think that should have raised flags, I think to everybody, I don't think is regulatory level but at least from a risk management and even internal board perspective and definitely from a shareholder perspective. So I think, for me, is this really about making sure that the same standards are there? We talked about audit standards as well, it was interesting to read that FTX did not have any of the big 4 doing their audit. It was just interesting that I was like, there's a lot of stuff that we just would like people to hold them to the same standard. And I think it's a shame that it's only starting to happen. I mean, I think today's news as well was that Elizabeth Holmes got 11 over years for fraud, for Theranos. And I think one thing I think about is like, I think that's pretty fair. I think it's a good chunk of time, and she unfortunately, put patients’ lives at stake. We're trusting the results of fraudulent, blood testing approach. And she was also misrepresenting the company's advancements and technology and progress to the board and the shareholders. That being said, and John who might cost me actually raised some good points on Twitter. He said, from a shareholder perspective, Theranos, the only people were exposed to it from a shareholder perspective were accredited investors. There was a board of directors, and Elizabeth Holmes did not steal, get a billion dollar loan, let alone transfer money to themselves, not mince additional tokens. She didn't build a backdoor in terms of the financial systems accounting to bypass audit and compliance. So in some ways, I think FTX does seem. I think some people have claimed it as victimless because all financial nobody, like had fake blood results. I think in terms of the magnitude of the financial crimes, there's a lot more or similar dynamics, who I think eventually play out. I think, too, obviously, not just civil action, but criminal charges. I hope that's enough, actually, I hope that slow moving legal process can stiffen the spines. I think of executives who want to cut corners, slash wander into committing fraud slash explicitly decided to commit fraud or something like that to stop it. But I think one thing I was really disappointed about, I think about FTX was just like the lack of internal executives who said no, or were willing to whistleblower. I do think there is a whistleblower FTX. I think somebody gave that Alameda balance sheet to CoinDesk. So there is one whistleblow I don't know who that. I think people are forgetting that story. That somebody who had access to that I don't think the hacker, I think it says somebody who had access somehow made the right call. Maybe it was a financial incentive as well to short sell the stock who knows, but someone made the call to do it. But I just feel like it's disappointing that the whole executive team of FTX at Alameda, unfortunately, nobody kind of like stepped in and said, like I said, there's something wrong. I think there's Constance Wang. She's someone who studied at National University of Singapore, the CEO FTX, formerly from Credit Suisse. And she studied risk management there. So she had gone through the basic training, at the bank about some of the stuff and she was living on premise with many of the key actors. I feel like there's a huge story where there's a lot of people who basically saw everything happening, but didn't step in. I don't know, I think this is me ranting, I guess. I think that's my disappointment. I would say, what are your thoughts, Chia?
Chia Jeng Yang: (23:57)
I mean, maybe one quick presentation like, SBF is definitely not the face of self-regulation. And I think he was definitely very heavy handed. And there was a lot of backlash to him in the weeks before, because of the bill that he was trying to push through Congress that would essentially kind of heavily regulate DeFi, he was also kind of very aggressively trying to build systems to accumulate more assets. And so I think one train of thought is that SbF was really trying to ensure that more and more assets while there is control, both from DeFi and both from the exchanges, essentially to continue growing and to get more assets to potentially cover the hole that that he knew existed. And so that's what that's one thing very important clarification that a lot of people in the crypto community that were very opposed to what he was trying to do before this whole FTX thing happened. So I think that's point one. I think point two, you're absolutely right. And I think one thing that shouldn't go unnoticed is the fact that this is a broader generalized problem about governance and kind of oversight and accountability, fundamentally in all companies. We saw some of the things WeWorkork we saw similar things with other companies with a great example. And there is very little difference. Fundamentally, of course, consequences are very different. But there was very little difference fundamentally about the way that they were approaching building, which is reckless abandon to the consequences and to accountability. Arguably, when you see a setup, and I'm going to quote the current CEO who’s taken over, what you essentially have here is a bunch of very inexperienced people potentially deliberately chosen, because of that who essentially kind of allow the exact team to do whatever they want. And also to be clear, like very handsomely rewarded for doing that. And so I think that that's something that is part of the Bull Run that we've seen in the past 10 years, inevitable consequence of what happens when it's easy to throw money around and not give oversight. When the market turns against you, you start to realize that, okay, like some of these things actually don't make sense. That's important thing to bear in mind. Like this is a generalized problem that happens in any market that's moving too fast. It's growing too fast. It's making a bunch of people, a lot of money happens traditional finance, and it's happened here in crypto, and these are not the things. And so I think the next few years is a great time, as you mentioned, to kind of reflect on how everyone should be building, investing, and kind of supporting key industry players as the market is jumps slower to recover from all of this. And maybe one last clarification is, I think that very heavy rumors of who is likely to meet that CoinDesk. I think the most plausible rumor, which I would say here is that it's probably from an external party rather than internal party.
Jeremy Au: (26:54)
Maybe that's the case. I think there's a strong financial incentive for somebody to do it, because he could have easily done shorts and hold opposition and probably someone could have had, this is like the defense of all short sellers. Short sellers should be allowed and all this investigative journalism needs to be allowed, because the market kind of work with that information. For me, I just feel like if there's one key takeaway, I mean, let’s say the industry is industry is moving quickly but humans are the same. Financial fraud has happen, or fraud has happened for like 100s, if not 1000s of years. And obviously, for you and I think we learned at business school, which was the fraud triangle. It's like any of today's like, the three things that causes people to go bad. It's like opportunity, motive and rationalization. Motive, you're gonna make money. There's a lot of pressure, and somebody is telling you to do it. This opportunity, because no one's watching. There's no controls internally. Diminishment isn't really checking, the bar is not really there. And the rationalization which is like not saying, I want to fraud, but that I'm just gonna make up for the loss. I lost something, I'm gonna make it up again, let me double or nothing double or nothing. And then it's only a loan I'll pay back eventually. These are all like ways that it's very normal human beings who you would trust to or not rob you while buying a can of Coke, or just hanging out with you at a dinner party without committing murder. This ends up doing this. I mean, it reminded me what you're talking about it, the collapse of Barings bank. The orders merchant bank in Britain, which was founded in. I mean, have these notes on the side, founded in 1762, and collapse in 1995. 233 year old bank destroyed by Nicholas William Leeson, a trader in the Singapore office. So Singapore is, I don't know what's going on here. But I think he was a futures trader, they just kept doubling down on it. And he basically created like, a $2.2 billion debt hole which is utterly insane, obviously, if you think about it from an in one individual doing it, but also how he wasn't caught earlier. So just a really crazy, I don't know, what's the word. Like, it's just like, we keep rediscovering that humans I don't know, humans are like version 0.1. So I tell people all the time, it's like crypto is like monkey brains in strapped to what our dinosaur bones, fueling electricity with algorithms, It's just like screaming through the jungle on a rocket ship,
Chia Jeng Yang: (29:23)
I think you're right. Like, I think there's a bunch of takeaways, I think are relevant here. Like number one, just like your example, that trader who grew up that bank and it was in Singapore. Singapore, trying to be a financial hub. And you can't be a financial hub without realizing that being a financial hub means a lot more financial activity, some of which are going to be fraudulent and it's going to look bad. So you kind of have to take the view like, do you want Singapore? Do you want Southeast Asia to be the center of this or not? Being in the center of there's less financial crimes in Utah, like that doesn't make Utah like a great financial district. Sorry, for anyone from Utah. So I think that's kind of fundamentally like the first thing to realize. Like if you want to be at the forefront of things, and frankly, I think Singapore has. Singapore was on the forefront of this in a move that I think is genuinely surprising to Singaporeans. And there was backlash. Do you believe that this is going to be part of the next kind of iteration of financial technology? Quite a lot of us do believe that. And so there are certain things that are in place. And suddenly, we can improve the way that we do things as a whole; investors, founders, regulators, etc. There's always room for improvement. And I think we will get there. I think that's the first thing to bear in mind. And I think it's very good to treat new situations with a lot more humbleness, a lot more introspection about how we're doing things. So that's the first thing. The second thing to note is that we are not at least in the crypto industry, like we're not just, here's an exchange to buy monkey tokens. Like, we are here to do a lot more things. And there's a lot of consumer applications that are going on, still very interesting things that are happening. And this will happen, despite the collapse of certain exchanges and things like that. And so all of these innovations are just continue to grow and we're going to keep seeing that grow. And so like, an exchange is not the industry. I think that's the second thing I just wanted to be able to communicate. And then the last thing I just wanted to be able to communicate is, as a country, we're surprisingly indexed to crypto for whatever reason. I have my own suspicions on psychology, but like, I like to make the joke that a Singaporean actually owns almost every single major crypto fund, why is a very, very interesting longer conversation. We are very, very index to this, because I think there's a lot of rather, that's exciting. And there's a lot that we can bring our skills to global audience. For the first time, in the industry, you can say, like the top leaders of this industry are based in Singapore. We don't say that really for B2B SaaS, for example. We don't say that for a lot of industries. And we can say that because the government has taken some proactive measures here. They were one of the fastest movers here. The Singapore government who was very close to Vitalik, as Vitalik was trying to build up Ethereum, which I think was a really good way of understanding the power of what Blockchain has to do. Again, on the good side of things for institutions etc, I think that's a good thing. Like, we're able to say, we are going to take ownership and leadership and certain things because we think that that's the future. And sometimes there will be downsides, as mentioned before, but there's also a bunch of really strong advantages for that. And I think that's kind of important to bear in mind. Some of the benefits from a social and nation building an industry competitiveness perspective when we do this. And again, like, full acknowledgement that I think, frankly, as an industry, a lot of people would feel very, very disappointed by what has happened. And I think that’s a lot in this.
Jeremy Au: (33:01)
That's actually a beautiful, hope signal. I think Singapore is a financial hub for the world, and also an innovation leader, I think, for the region as well. And so I think the truth is, there are consequences. And I think it goes back to what you said about the Barings Bank which is after that happened He was an individual, but in Singapore, then changed the law to improve governance and oversight and even licensing of the industry. Yea it collapsed in 1985. But in 2022, and 2023, I think Singapore is even a stronger financial hub today versus back then. Like you said, I think one meltdown and disaster doesnt tar the whole thing. And again, also FTX, for example, was the Bahamas, and US entity. So I don't think it has the same flavor. I think we're just talking about retail exposure and perhaps, obviously, investor exposure to it. But that's very different. I don't think you happen on the MAS watch in that sense. And I think like you said, I think also the Monetary Authority of Singapore has been proactive. I didn't get didn't see this coming and has already begun taking I think tonality, I think shift but also, I think looking into this more deeply as well, much earlier in the year. I think what reminded me of is like, when every time you try and build something new, The awkward reality is like you have all these like good faith actors playing the long game. And the truth is, in the short term, just all the people who are like that faith playing the short term is a swamps the system. It's just totally like, I don’t know, just kills the system over and over again. But I think it's a shout out to all the people who are good faith building a long term, actually doing the work. They said like you got to keep building and gotta keep your head down. I think gotta get a lot of hate actually, and skepticism. And I know what you call it now, Crypto winter, crypto nuclear, winter fallout, what do you what do you call it now I guess?
Chia Jeng Yang: (34:55)
Bear market.
Jeremy Au: (34:58)
Bear market is, like you said. A bear market was, I don't know why advice you have for builders, builders of crypto people who are crypto interested what advice you have for them?
Chia Jeng Yang: (35:09)
I can give two things, which is, I think the good thing about bear market is a lot of hype goes away, you're talking to people who are all serious, that's all was left. We're really serious. And I think, , the other piece is like, looking for product market fit like a lot more conversations very much focused on product market fit, as opposed to the next hype thing, which again, we see in traditional tech all the time. And so I think laser sharp focus on again, on what people want to serve and solve problems for people that's good. And the second thing is, DeFi exists, use DeFi that's something self-custody, decentralized protocols, does a lot of things that are tried and tested that continues to iterate on the best practices are completely transparent. And these are the things that we should be using lot more.
Jeremy Au: (35:59)
We could go on for an hour, I think. But I didn't want to wrap things up here. For me, I think the three big things I took away from this obviously was I think, first of all, I think it was a great obviously recap of the FTX situation. But also I think the Southeast Asia first order consequences, I think in terms of retail investors, institutional investors, regulators, and even geographic location as a source of talent, like you mentioned, but also as a place for crypto talent/executives together as well. And so I think we've definitely seen a lot of Southeast Asia exposure to all the crypto bear market trigger/inflection points. I think the second thing I really appreciated talking about was, I think going back to basics, a little bit about what went wrong. We talked about, obviously, fraud. We talked about oversight, we talked about regulatory action, we talked about the fraud triangle with a history lesson about how it's happened multiple times over history, financial fraud, and I think we just keep rediscovering that humans can go bad. And I think it was an interesting dynamic for us to, I think be reflective on and I think he talked about. I think the third thing is I like the call to action, which is about saying, at the end of the day, if you are a crypto builder, and you are good faith, long term player, like you said, now's a good time to be heads down, keep building the hype is washed out, and this slowly do what needs to be done, despite the media, despite friends and family and just keep building slowly. Also, obviously, your push towards decentralized finance, which is, I think, a pretty nuanced view. I think most people can really tell the difference between decentralized finance and centralized finance. And obviously, what happened in FTX. So I think that's worth adding for people who are unclear curious to kind of like Google and just kind of go down that path, at least understand how he could mitigate some of these consequences. Well, I think I add, I think what you inspired me to say DeFi this call to action, I think is also a call to action to venture capitalists, executives, institutional investors, regulators to really step up our game. You said earlier, I think there's pressure to not call out folks to not say stuff. And I think the unfortunate piece is that silence is complicity at some level for when bad things happen. And, actually, it goes all the way up to, in legal terms, negligence or even gross negligence. If you have a fiduciary duty as executive. I think is a good reminder that everybody needs to do their due diligence, if you're an investor in crypto, you have to do the work. There's no such thing, like you said earlier as a free lunch in a bull market, everything go up. Means, I go up. I mean, it's not true. And I thought that was actually a good, I don't know, reminder that we just need to have more honest, no BS, direct conversations about what's going on. Otherwise, if the external party then drop the Alameda, the balance sheet, even those external party, and even though there's a financial gain. Here, imagine if this fraud snowballed for another, I don't know, two years, and the US Bill got passed. I don’t know it would be like, I don't know, even more cataclysmic, honestly.
Chia Jeng Yang: (38:51)
I mean SBF at one point was trying to set up a commodities exchange, maybe one of the largest traditional commodities exchange who knows what may have happened, then.
Jeremy Au: (39:02)
At least the meltdown happen now rather than later. I guess that's one way to think about it, even though that's a really weird way to say it. I think we all wish that this was popped out a year ago. So thanks, Chia, for jumping on the call and discussing this frankly. So it was fun.
Chia Jeng Yang: (39:26)
Absolutely. Thanks for having me, Jeremy.