How Can I Sign New York Banking Presentation

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hello everybody i have with me here this afternoon dave abner who's global head of business development at gemini uh thank you so much for your time joining us thanks to the audience for joining us also dave maybe we just start introduce yourself introduce your company although i don't know that it needs an introduction uh but why don't you just give everyone uh some background sure sure it's great to be here thank you very much for having us i'm actually slightly different from uh i think everyone you've spoke to today i actually uh i've been in the financial markets for 25 years i started out as a derivatives trader but i joined uh wisdomtree asset management as a startup so i actually come from the asset management side of the business as opposed to the brokerage side and i've been uh working for the last decade educating institutional investors on how to use and incorporate etfs into their business and then i switched over to crypto because i think that industry is in the same phase of educa education and adoption that we're seeing today so let me tell you a little bit about the company and as you said most people know it gemini is a full-service crypto exchange and custodian that allows customers to buy buy sell and store crypto in more than 30 digital assets we were specifically designed for institutional investors to acquire crypto assets and store them safely securely and efficiently we are what i would say is more highly regulated than most of our competitors we've achieved sock 1 type 2 and sock 2 type 2 certification from deloitte for both our exchange and the custodian we're the only exchange speaking today to have achieved that certification level we run on a digitally native architecture that enables us to process excuse me provide access via api and fixed connectivity for most of our services we are not run out of the cloud our exchange infrastructure and matching engine is housed in the same facility as the nysc the equinix ny5 data center in secaucus new jersey we're a new york trust company we're regulated by the new york state department of financial services we're a fiduciary and we're subject to capital reserve requirements cyber security requirements and banking compliance standards set forth by the new york state department of financial services and new york banking law we're qualified custodian for both our exchange and our segregated custody account our exchange and custodian are covered by one of the most robust aml kyc programs in the industry including an extensive market surveillance program we're subject to the bank's secrecy acts and its implementation requirements we actually provide the highest insurance coverage in the industry with 290 million dollars in coverage across across both our exchange and the segregated custody accounts we provide private keys using fips level 4 rated hsms which we consider to be more secure than key sharding with web auth support address white listing rate limiting and ip restrictions for securing accounts gemini has over 350 employees and we're available in all 50 states washington dc and puerto rico additionally we're available in more than 50 countries including australia canada hong kong singapore south korea and the uk let me tell you a little bit about our founding the firm was officially founded in 2014 by cameron and tyler winklevoss they first became involved in bitcoin in 2012 during the very early days of cryptocurrencies they faced hurdles acquiring and storing their bitcoin as well as connecting those holdings into their wealth management infrastructure they realized that they can build a bridge to the future of money for all institutional investors through the development of systems purpose built to facilitate their own needs for buying and scoring their coins today gemini's empowering individuals and institutions by providing a simple elegant and extremely secure way to trade and store crypto assets the firm is built on a foundation focused on product security licensing and compliance and many of our decisions start with the idea of doing what we should do not only what we can do because protecting investors brand and reputation is our primary goal awesome well that was a pretty thorough background uh a lot to know i want to make sure we get it all in oh i like it thank you thank you dave so 350 employees give us a sense of your size in terms of assets uh well we've announced publicly recently that we have over uh 10 billion dollars in assets under custody and that's that's that's our general size that we make public the rest of our company is very private okay great so uh you mentioned you you offer brokerage custody services just maybe you can break that down especially this is bitcoin for corporations right and you're you know you're sort of uh gave us all the great credentials that gemini has maybe you can just walk through one by one the different uh tiers of products and and why corporations should be interested in this absolutely so we offer a wide variety of what i call prime services we're an exchange and custodian and we offer otc execution and clearing services all of our services are applicable to all of the products that we make available from bitcoin and ether to a range of d5 products first and foremost let's talk about the highly regulated crypto exchange right as i mentioned with the only exchange here to have achieved stock 1 and 2 type 2 reporting status this means that gemini is the most highly regulated transparent and tested cryptocurrency exchange in the world we take customer safety and security security very seriously in order to fulfill our mission as this bridge between traditional and digital assets right assets on our exchange are kept in an on the bus account that is secured with three levels of storage security a hot wallet and then cold and crowd storage we also offer a fully segregated custody solution this segregated custody is entirely separate from our exchange storage systems with independent sets of private keys hsms and even different geographical locations for physical hardware security this is designed to work seamlessly with trading on the gemini exchange but also completely independently as a standalone first solution for investors who wish to trade elsewhere and still have gemiini be the custodian of their assets the exchange and custodian are supported i think like i said by a full suite of apis so that functionality can actually be built directly into in-house solutions already in place at most of our clients we also provide a series of execution venues for our customers ranging from trading directly on the exchange utilizing either our simplified exchange mechanism linked to our matching engine or our active trader functionality this is designed for traders that want to use advanced order types charting and additional features there's also what i guess it's an automated block trading utility which is unique to the industry and it's currently actually free to use this provides instant block liquidity from market makers in real time via an electronic interface you simply type in a block size and you'll receive two-way markets with actionable prices and lastly uh as has been discussed by many of our competitors we have a high touch trading desk for working directly with institutional clients managing their sophisticated order flow a unique feature of this desk is its use of proprietary algorithms to determine levels for pricing orders for execution on the gemini exchange so this keeps client order flow within the gemini ecosystem removing the problem of settlement risk that sometimes ignored on other trading desks as they go out to a variety of venues effectively our clients are trading as if they are the top quantitative hedge funds in the world the desk is run by a former head of fx trading at bmp parabol and the experience is structured to look exactly like that of trading with a big bank we can offer pre and post trade analytics and we approach the our execution business as a partnership between our clients and the firm there are no regulations dictating best execution in the crypto space but we take that concept as a cornerstone in our otc trading business we are not executing against clients at any time but working with market makers and our own math-based algorithms to find the best bids and offers throughout the global market in order to achieve the best execution possible okay well thanks dave i appreciate that um tell me about your customer base do you have any customers you that reference and i'm sure security and privacy is important do you have any reference customers you want to share with the group here we do actually uh our customers span all segments in global regions like i said we're currently safe keeping over 10 billion dollars in cryptocurrencies we have banking relationships with jp morgan and partnerships with state street and other institutions we provide execution and custody services for robo advisors traditional wealth management firms including trust structures pensions endowments since the firm was designed to be able to execute and store crypto for a large family office originally everything is built from the ground up to service our institutional clients generally institutions come to gemini to talk about storage and are actually pleased to discover that we actually offer this full suite of services of execution and clearing but in a very discreet and professionally run structure so one of the most unique features of our platform is our sub accounting function functionality it enables wealth managers like eaglebrook advisors for example to segregate trading steps strategies or end customers under a single master account structure this is most used by wealth management platforms that are managing money from multiple clients under the same umbrella through this functionality we can assign differing levels of access and privileges across the account structure we can trade for one or multiple accounts simultaneously allocating executions at the same price to multiple clients with similar or different fee structures we also provide custody exchange services for a variety of corporate clients that as we'll talk about in further detail starts with a long discussion about intended goals and an education process about the crypto industry our firm and alternatives in the market what we have found is that the initial decision to pursue a crypto exposure typically comes from somewhere near the top of the organization and it actually becomes the job of the rest of the team to figure out the mechanics of implementation our specialty is to help educate each role on the team as to their involvement in the process and what they will need to know for entering into the position and managing it in an ongoing basis so i think i said at the beginning that i started at wisdomtree and i've spent 12 years educating portfolio managers on the nuances of implementing etfs into their portfolios we run a very similar process of education before we pull the trigger on execution i firmly believe in transparency around fees and process we're happy to help our clients understand how liquidity providers create liquidity in bitcoin and where they're making their money right all of our client relationships are partnership designed to achieve the best result on that execution i want to focus on two more areas before we move on um we provide services to more product issuers through our gemini fund services group than anyone else speaking today fund issuers like three iq in canada galaxy ci osprey crypto trust they're all clients of our bespoke fund services business our experience in etf in etfs enables the team to excel in providing not only custody and execution but all capital markets needs like seating and liquidity provision and we're actually in discussions with most of the fund industry about wrapping cryptocurrencies into traditional wrappers i think this is a piece of the business where we really stand out and then lastly we also work very well with the family office industry that group traditionally keeps their business close to the vest but because of our providence of gemini and the winklevoss family office we have a real understanding of their needs and so we spent a lot of time educating and providing services to this what we call traditionally discreet group of investors all right well you you came quite prepared david but i don't know if i heard you answer my my specific question do you have any corporate customers you know a lot of the audience here are major corporations uh that are considering investing in bitcoin do you have anything to share or talk about we do but we don't have any that we're willing to share their exposures today or share their experience today okay got it thank you so so let's say you're a corporation you have 50 million dollars that after after listening to the two days of our bitcoin corporations track super interested in getting into a bitcoin position as soon as possible uh how fast can you on board what's that experience exactly feel like so the customer journey is a huge focus for gemini right and i think they understood this from the beginning that if you're building a business from scratch getting customers in the door trading was incredibly important right and turning people on right so the firm is built this process of onboarding for an institution it's actually very similar to the process as if you were onboarding an individual right there are some minor differences in documentation requirements it's all standard incorporation documents that every firm would have readily available right we have a concierge service for institutional clients we walk them through the steps of the process with a dedicated person for questions to ensure things are flowing smoothly generally our turnaround time which is what you specifically asked is 48 hours start to finish however uh like a few people have mentioned today actually we can turn you on much quicker if there's a you know something that needs to really get done quickly and assuming that all the uh paperwork is in order more importantly than onboarding though to me is this concept of gaining an understanding of the client's goals with the relationship right we do this through a series of meetings designed to best understand what they're trying to do how they like to communicate and the variety of ways that we can help them achieve these goals right this does a lot to avoid the typical challenges that might present themselves to our cust our customers right so differences between exchange custody and our segregated custody product sometimes people need to think about that a little bit or the way that we protect their accounts by white listing this prevents them from accidentally sending funds somewhere unintentionally we have an extremely advanced set of controls and procedures right this prevents clients from sending funds uh and making mistakes in a world where like crypto where there are no do-overs so we walk clients through this entire process to ensure they understand what they can do and cannot do and then lastly i would say it's important to remember gemini is only 350 people we treat every customer as if they were our only customer you're not getting lost in a big organization you're not dialing the phone and getting into an endless automated maze if you want to speak to us we answer the phone we answer questions we're here to help with adoption of this new ecosystem and we actually understand the value of your money to you i think great uh so let's so let's let's get big picture and where do you see the bitcoin marketplace going one year's two years three years uh you have a price uh forecast for us at the end of this year probably not but uh you know i'll ask you i'm gonna leave i'm gonna leave pricing to crypto twitter okay you can get plenty of price estimates no one's taking us up on that that yeah i didn't expect you would be the first but just tell me where you think you see the market go in the next three years i may be a little more conservative than my colleagues um look i think one of the most interesting aspects of the marketplace today is around this development of traditional looking financial service products for investors ight i spend most of my day speaking to institutions about our services one question we get all the time is how do we integrate with our competitors actually because firms want to set up multi-custodian models like they're used to in the traditional markets i think this is one of the biggest features you're going to see in the future right because this concept of spreading around risk is incredibly important not just from hackers right but even from traditional market disruptions that we can't predict until they occur imagine for example that if you're the largest bitcoin trust in the market today and you kept all your assets with one custodian and executed only through their team well there's risk on the custody piece there's no competition for the trading piece so clients end up bearing all these additional risks that they shouldn't be subjected to i think the market's not necessarily big enough for this evolution yet but over the next few years as assets continue to grow we're definitely going to see uh these setups start to take form additionally we're seeing rapid advances in the trading architecture so that liquidity sourcing will become dramatically easier and much cheaper i think it's clear to everyone here that time is accelerated in today's markets right what used to take years in the past sometimes happens in hours or minutes based on news dissemination social networking crypto twitter right over the next few years massive investment is going to come into the crypto space and it will be great for industry leaders like gemini right but i think that crypto space moves in dog years a traditional year is seven years in crypto right the development speeds are incredibly fast and as we move from one product innovation to another it's just staggering that you know what people have to absorb to keep up this is sometimes just on that you know you worked in the etf space you mentioned and you really saw that take off over a 10-year period how would you compare the adoption of bitcoin versus the adoption of etfs in terms of you know you mentioned dog years of 701 like how much faster do you see this happening i assume you see it look i do see it happening faster and there's massive adoption but um you know part of it is that you know there's a regulatory you know delay or weight right and this is actually really difficult it's a great question and it's a difficult point for gemini because of our regulatory disposition right we sometimes find ourselves waiting for regulators to catch up right and you asked about my history bitcoin etf is actually a great uh example of this right the winklevoss twins were the first to file for a bitcoin etf in 2013 right they were absolutely right about the demand for the product and the need by some investors many of them on the phone today or on on the call today to hold their bitcoin exposure in a trust structure but uh they didn't want to launch an inferior structure for investors which might have premium or discount issues in the future so they waited for the etf believing sort of like i do that it's a structure that would provide exposure for investors but also sufficient protections for them and what they did in the meantime is build gemini into an exchange and custodian that serves all crypto investor sizes right simple order flow to the most complex complicated execution and storage situations the future is going to be this full series of new products that we almost can't imagine today but it's also going to be made up of all the products we know in the traditional markets but running on sets of digital rails they're more efficient and lead to lower end costs for investors right yeah you know you seem like you would be the perfect person to hit that sort of intersection of bitcoin and an etf you think we'll get one it's a great question uh it's hard to see what the future brings okay i wouldn't wanna i wouldn't want to step in front of any regulatory clarity you know okay uh what advice is so we're here we got you know thousands of people uh listening and watching and will watch they represent corporations that are interested in bitcoin uh what advice would you give them first and foremost you need a good partner that you can trust right and i think that's a universal statement from everyone today the first decision start with your view of bitcoin as a new and future element of your balance sheet no one can make that decision except for the leader of the institution that you're at right and firms like gemiini can help with implementation and storage only after the mindset has been adopted that you want to move forward on this path we are specialists at educating teams on helping them prepare the implementation plan and getting ready for ex you know for execution as michael explained yesterday right there are a wide variety of strategies being implemented depending on the type of firm and business firms are bringing bitcoin onto their balance sheet like microstrategy asset managers are bringing bitcoin and other cryptocurrencies into products that they make available for their clients right so blackrock has taken its first steps with bitcoin futures and certain funds the largest custodians like state street and mellon are working on ways to partner with crypto custodians so that they can be a part of the services they offer to their clients wealth managers are building access points for their clients so they don't have to leave the platform ecosystem so every day we see increases in the ways that institutions are utilizing crypto so i think this highlights one very important point for everyone here today right if you're an institution either corporation with a us dollar based balance sheet you're an asset manager you're a steward of retirement assets you're an insurer custodian even a traditional exchange or investment bank and you don't have a strategy for cryptocurrencies you're dramatically falling behind some of your peers almost to a point of negligence at this stage if your board is not asking questions about how cryptocurrencies and blockchain will disrupt the business then you should be educating them on the variety of ways that it probably will well i love that uh yeah and i you know i i always you know it's it's uh i consider myself biased but i agree if you're a part of a corporation or treasurer or cfo board member executive and you're not considering at least crypto uh as part of your balance sheet of dnl you know then you are behind the top so i think that's great dude all right uh we're running low on time uh i i went out to the chat room to solicit a question and i know this is gonna sort of come out of left field you don't have to answer it dave um i i read bitcoin billionaires i thought it was another brilliant book by ben mesrick it was very entertaining i assume you've read it too did you have a favorite part of that book look i i think the overall portrayal of the twins look i i think it's a great redemption story right i think they got sort of not a great persona in the social network and you look understanding the founders of our company this is not lightning does not strike twice there is absolutely something special here right in the original incarnation of the early stories and then now what they've done with bitcoin these are definitely you know bitcoin billionaires the twins the winklevoss twins are definitely someone that we should all be watching and paying close attention to all right who's gonna play you in the movie are you are you gonna be in the movie i'm hoping to rent many theaters in manhattan when that movie comes out so that we can bring all our best clients in and get together awesome all right thanks dave i really appreciate your time and uh thanks for doing this with a group and uh we will i'm sure we'll get a chance to talk at some point in the future awesome thanks very much mom