In an avalanche of headlines, Brian over the past several days around what appears to be the clappers of XTX and given where you stand in this, it would be great to get your just perspective to start uh with what you’re seeing and did you expect this um? Well, I certainly didn’t expect it um, and this is a dark day for the customers who have lost funds in this. In this apparent you know, fraud. We don’t know exactly what it is until all the facts are in, but I think there’s a few things, just as I zoom out here. To think about I mean one is that you know FTX is really um.
It’S not representative of every company in crypto.
You know compared to coinbase, for instance, we’ve taken a very different strategy, we’re we’re based here in the United States, we’re we’re regulated uh. We have a New York Trust Company, we have a license from the cftc um, we have money transmission licenses and we went public, and so we have publicly available audited financial statements. We don’t own a market maker business um, you know we don’t invest customer funds without their explicit Direction, and so anyway, I think that’s an important thing for people to realize in this environment is that not all companies in crypto are are like this, and just like Traditional Financial system occasionally has a company that goes bad. It is not representative of the whole right.
What do you think happened here?
Well again, it’s tough to speculate. You know without being uh inside the firm, but what appears to have happened is that um customer funds that were you know, deposited in in FTX, Were Somehow made available into Alameda their their Market maker or more like hedge fund activity, and they took some risky positions And the firm appears to be underwater, but again I don’t have any specific knowledge of what’s actually happening, and this is what I’ve been able to gather from a brief couple of phone calls um. You know I did speak with SPF and CZ briefly during this process and then just from speaking with outside uh participants, did you see red flags um? Your Venture arm took an investment in FTX, I believe, back in 2021 and of course, for for many for the last year or two, it appeared uh that this was a firm that was shooting to the moon at a time that you were competing with it.
You know their numbers, you know your numbers, you know this is partly.
I think why so many people in crypto feel duped, and I I do as well is that I look back at all the interactions that I had with Sam and um. You know I felt like he was a very bright and uh genuine and eager person. Perhaps a bit young, you know he’s um, perhaps a bit um reckless in certain moments, but not not corrupt, not um. And again I hate to use that word because we don’t know exactly what happened.
You know sometimes people they get in over their heads
or you know, misunderstandings happen, and so we we should wait to reserve to see what what happens um. You know when all the facts are in, but you know the other thing I you mentioned the numbers um. I was aware of our Revenue. Last year we did seven billion revenue and about four billion dollars of positive ebitda, and I was aware of their revenue um. Just as an investor, which was more like around 1 billion – and I was surprised at how much um cash that they seem to have and Sam seemed to have to go out and perform various um, you know know investments in the market, both their Ventures arm and You know buying nine percent of Robin Hood and various political donations, and I did have I did wonder at times I was thinking where, where is all this cash coming from?
And so you know you always look back 2020 hindsight, but I certainly didn’t feel um anything enough to speak up, and so I was as surprised as anybody.