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so and we're live [Music] good evening hi good evening everyone people saying that my name is james and i'm the community manager for the resistance trader and tonight we have our guest of course meron tayong visited with our live stream none other than our guest is attorney raphael padilla so tonight our issue or the thing that we will be discussing is where we live consent ion even last time if you remember guys we had our interview with the ceo of pidaf we will be hearing them on the side of the story users represented some of them represented by attorney padilla padilla good evening good evening uh yeah good evening uh good evening uh community um yeah first of all um um i just called miraf or rafael i think you're not too comfortable with authority thank you yeah uh yeah i'm happy to discuss um and share some insights on what's going on although um uh just some disclaimer uh so so i represent some of the affected users in uh this case now uh regarding what happened to edax and because of my involvement as legal counsel for for this affected users now uh i have some restrictions now i i cannot give or discuss certain details of the case um for confidential reasons no as much as i want now it's interesting to to hear information material information coming from the other side coming from uh my clients know coming from other affected users that are not my clients no but were uh but did share some some some critical information from media and even from regulators now it's just that i cannot disclose this information because i'm bound by confidentiality uh because i committed to keep it confidential um and then also because of uh a strategy as well practically we don't want to to lay down all our cards so so we cannot disclose some of those some um critical information that might be um helpful uh uh for for the favorable resolution of this case in favor of my clients and then last disclaimer i hope you understand james i hope it's okay uh and for for the community as well um i cannot be object if we talk about pedex i cannot be objective um uh as legal counsel representing the effect some of the affected users uh i'm obviously uh biased not in favor of my clients we can talk about other things and i'll be happy to be objective but not at this point and not not with respect to this uh to the skills we perfectly understand the situation that you are into and but before we proceed um discussing all about this issues that happen allow me first to give let's give first the audience a background of who attorney padilla or who attorney rap he is aside from being a full-time lawyer and of course the legal counsel for those for some of those clients yeah so so i'm a commercial attorney i've been practicing law for 11 years now uh i have been specializing in financial technology and crypto since 2015 so almost six years now um i was also formerly head of legal aid compliance at sei ventures specifically it's mppt repeatance a uh which is uh one of the actually the second uh vce virtual currency exchange not licensed by the central bank um i i i i love working at sci i really enjoy it no the company of my mentors there miguel conetta which urged me to return to private practice and serve also other clients so i had to depart in 2018 and i've been uh yeah uh handling uh legal matters for uh several fintech and crypto uh projects here in the philippines and in southeast asia last year i also offered the book i wrote a fintech law and first principles published by rex bookstore and i am also a faculty a professor of lutz and veda school of alabama school of law since 2010 for 11 years now thank you attorney for that introduction also [Music] he works with fabian he works with the ogs before yeah it's in the miguel yeah we know that in fact that's the that's the main motivation for me the impetus really all right it was very seductive if chan bailon will ask you would you like to work at sei of course i do in the context of 2017 you know the opportunity to handle the legal and compliance regulatory affairs of a regulated regulated crypto business is quite rare maybe right now it's it's more common to sense vc's and crypto businesses but in 2017 this is quite rare and so it was an opportunity and i cannot say no yes attorney actually we will deal more about that but before we we discuss it further i also would like to introduce our co-host sam we have we have here our companion mecco who's she's lying sylvester say hi to say hi sylvester there you go she's live by the way he used also to work with uh with an exchange and anonymous foreign uh foreign cryptocurrency exchange so he has uh an idea how it works as well so for the purpose of uh our listeners vce these are what you call the virtual currency exchange so it's actually um the vce are licensed and um regulated by dsp all right so yeah expertise now apparently uh your company that uh that we will be talking about right now it's also an exchange this is what i would like to clarify attorney in the first place confusion in some of the communities just to lessen the confusion okay um no to be honest with you i'm quite confused by that as well um and i i i would be happy to actually receive that email uh so i can assess it okay we noted that that was a reported and quoted article me announcer uh yes and uh yeah but uh but uh you we want to really evaluate that to say i heard something different there uh from the bsp on this yeah and uh again in this tricky situation that i cannot uh remember exactly what was the discussion but it's to the effect that uh to the effect that this statement might not be credible uh i mean i mean if it's coming from from from a user it's possible that there might be some error in communication all right among dsp regulators but okay regard let's clarify though or or if i can give my assessment on this let's set aside let's set aside what's stated okay let's set that aside is this matter within the jurisdiction of of bsp the answer is yes okay edax is a live esp registered virtual currency exchange now the updated term now is virtual asset service provider vasp and we can talk about that later where realize the difference now but but point is pdas is a bsp licensed vsp supervised financial institution it is a registered money service business it is a registered uh virtual currency exchange and for that simple reason this matter what happened to edax falls within the the regulatory perimeter of of of the bsp uh there are some aspects of this case that equally falls within the regulatory perimeter or ambit or jurisdiction of another financial regulator that is the sec but it doesn't mean that it's not bsp turf it's s-e-c uh there are aspects okay that falls within the jurisdiction in relation to this case that falls within the jurisdiction of the bsp and there are also aspects that falls within the jurisdiction of the sec that is why also in relation to the case that i'm handling for my client one of the affected users we filed a consumer complaint before the bst and then days later we filed an investor complaint against the sec i guess no not against the sec but before the sec all right so that's just to clarify you know objectively the the it falls within the jurisdiction of the the bsp uh whatever state that there might be just some error or we we can investigate what happened there but um i don't believe that that's correct statement of the the deposition of the bsp in this case thank you uh attorney ravi for the clarification at least we know um when we when we interview nish and my aunt is to goodness opinion although i'm not legally a legal expert i can i can see and i can hear them from them that they're they're honest and credible enough to say that the bsp is coordinating with them about this matter if you heard them during our interview nah they even have um close communication about it with the bsp so having said that i believe i want a personality but thank you for that clarification now that it's clarified um well sabina nathan for as long as far as you are concerned let us uh dig deeper i don't know about it attorney if you if you don't mind my question is so there's someone who sold at that price level being appeared in the system after appearing on their system apparently there are some buyers from the other end so that's really an interesting version of what happened and i'll be happy to flesh that out one by one where they're nothing maybe i can randomly start at certain details but let me just quickly remark sorry i i i was about to interrupt you earlier and i think i did uh let's figure it out but i want to quickly remark [Music] are they even communicating with their users uh after we it's been more than a week since we submitted our inve our consumer complaint with the bsp and according to the bsp they have instructed already docs to communicate with my client right to sort this out we haven't heard anything from them if you really care about your users then talk to your users cooperate with them cooperate with them and i think it's a good starting point to unlock their accounts so that they can access their accounts so that they can do what they need to do with their accounts and as far as my client is concerned no the client is very transparent the moment they they they unlock the account my client will withdraw response there right um so yeah but um yeah let we i i can again happily go back to that but let's discuss for some of the anna the young version first um i i wanna hit two points here one is and that's crazy because that's even the term i'm not sure if you're just using that term james or or michelle himself use that term but it's crazy that i've been hearing that from their side no the term [ __ ] no no okay so let's let's tackle first the unfilled orders let me just say from from from information that i have from evidence that i have meaning emails you know what happens once your order is settled once your order is filled you receive an email and that happens also indeed so confirming you transfer and that that your account has been credited that happened to my client yes emails from pdas confirming that those orders were filled you can see that in his in his dashboard computer but he also has emails not proving that and it's funny actually to say we only hear the other side it's funny actually and i i i've said this several times samana chats it's funny because in between field orders three million three point one million something three point one million taps between that my three hundred thousand taps between that by three hundred and three sorry three million and i i'm we're not for my client i'm not taking this position for my client i am just speculating on this and a a disclaimer i don't have evidence also on this no uh this is just my speculation but what does that suggest to me what does that look like you'll feel in a potentially fat finger though i could actually should be investigated here but he said price not three million that was made by and uh maybe twice not three hundred thousand that may reset price will it not three million so what happened there is it possibly [Music] the field order nana it's really unfilled now let's let's talk about you a bono yeah it's again actually you're asking me yeah you're you're asking me if i use that term indeed i use that term when i interviewed with apps you say i would like the audience to understand if that is how it looks like you said based on how it was stated during the their wallet their liquidity pool filled in for that um order from the cell order of that particular whale that they said cell within in inside pidash which maybe we you would like to expound and the term that they use here is um i i i forgot the term specifically uh let me just uh try to remember that but it's common for a financial intermediary to advance certain funds to be to process certain transactions to settle certain transactions but it doesn't mean that just because they advance some cash or they advance some crypto does not mean that there's no substance in the transaction that the transaction is invalid no um that simplifies the settlement right that simplifies the transactions and it was an intermediary your goal is to make the transaction simpler for your end users so if you have to advance cash you do many things to streamline the process and one of them as a financial institution is at some point you will advance certain cash or assets no so practice we don't have evidence of this yet no we only have to take the their words on this no even the regulator has not said anything on this yet version vanilla is there are speculations and again we're not taking this position this is me uh um i i will remove my hat as legal counsel for my client but this is just some of the speculations no chats no uh because we're trying to understand how it might be possible this claim that their system was able to allow this unfunded order okay and the speculations are the suspicions are you rather are trading bots here okay and humana bots neon diba may be unfunded no they might be unfunded and what could be the reason why there's a trader there or there's an account there that's unfunded and that the suspicion is it's because it's controlled by themselves maybe they're trading bots or might be making bots all right that and that's really another kind of worm that's another potential regulatory issue it does okay what i'm saying here if this is [Music] affected users for something that was actually your fault right and i don't want to speculate further on why they have bots there okay i don't want to but it's something that they might have to explain to the regulator uh yes like your audio is not working better okay yeah yeah yeah there you go actually i want to ask the question since we're on this uh regarding the bots but it's more in terms of is it possible in this scenario i guess or in terms in regards to this discussion to request for like let's say an audit log of the actions that took place on that day which is causing all this you know that way we can review the transactions is that within um legal rights i guess is the question short answer is yes okay okay but here's my problem here's my problem i've heard um um michelle and someone statement snipida that they are already like rewriting or something the ledgers they're fixing it doing this and that and that actually let's make things let's make an issue there if they're doing this to you later in my view this is quite dangerous as this might expose them to uh this might be in substance a tampering of evidence and tampering of air evidences as potential criminal exposure and um um i i know they're saying that they're doing this in coordination or in yeah yeah we the bsp and maybe as they say there's some oversight in in fixing not the ledger reviving the transactions you know correcting the transactions okay all right but but there comes my issue again my representative from financial regulators representatives affected users okay but it's it's not we're not yet this is not yet over okay if this is being allowed to be done nothing stops the affected users from questioning later why this is being released without their involvement or without their without their their their their oversight now on whether this they're collecting it objectively and not to benefit themselves to shed more light on that allow me to give some i know some grain of how we did the interview last time no no no men's english about that uh trading boss liquidity provider i asked that question actually i asked that i asked that question particularly and i mean um liquidity provider if they have their internal liquidity providers like traders who trade parameters i asked that question there so sabina they're partners with traders where they treat them as traders not as in-house during that time statement statement and during that time also young concerned mo about the rewriting we asked that there we also asked that since and the answer was they are being regulated and what how while they're doing it the regulator the regulators are on it something like that so union to that effect so to be fair um a regulator it might be no it might be impartial so we don't well you all have the rights that you wanted the epresentative so something like that so they yeah this is how we're coordinating do they get reports the last time i know from my client anyway my my client's account is still locked and according to uh pdox they will not unlock it unless he returns the bbc uh okay that's clearly stated [Music] or whatever crypto they have withdrawn from the platform that happy dax is now requiring them to return the condition the requirement call it whatever you want but it looks like hostage to me right they will not return the they will not uh they activate the accounts until the btc is returned actually with that being actually with that being said that's actually a cause for concern because wouldn't you think that pdax you know being like this exchange they should have control over the wallets so why the my question then becomes why why why the hostage taking they can why the hostage thing it feels like there's pdax whoever's running it isn't really pdax that's what's what it's sounding like to me if they don't have control over the accounts why are they asking users to return the bitcoin when well your pdax you you can control this because because those ppc or whatever crypto asset but from the affected users that i was able to talk to they were able to withdraw the btc okay okay okay from there from the from their ebox account to their external wallet there are legitimate reasons why you will be withdrawing and moving your funds from one exchange to another hashtag arbitrage yeah and then uh why why is it so difficult to understand that some of this user will withdraw that but why why is that so important that they were able to withdraw the funds because that indicates clearly very very clearly definitely that a transaction has been settled and the transaction is final i agree i agree concepts are not settlement systems and we call it dvt scheme delivery versus payment scheme granted granted is not a securities trading platform but the principle also applies that you only deliver the asset upon payment and my client's account was reversing the transaction no no is um uh peso to btc 300k he purchased that all right his account was debited all right trader shah okay i i i i can't tell to be honest with you i don't know why he removed it from his account he withdrew it from his account transferred it to an external wallet all right but again i'm telling you all that you know no mana speakers for this community you know why you do that there's something criminal here all right but he did that but that tells you the asset has been delivered why because he has paid already no for that btc and that btc wasn't just sitting in his account he was even able to withdraw it in has been delivered all right uh and therefore final the delivery is an indication that the settlement has been finalized and therefore irreversible that you will see terms and conditions to the effect that orders once executed is final and irreversible nasa terms and conditions okay with more reasons the the the bbc wasn't just sitting no don't account my client my client was even able to withdraw it which indicates that he has control and therefore it has been delivered and again that delivery indicates the finality of the transaction settlement at your concept settlement finality all right young settlement finality is a legal finality okay what's the difference under our law under the national payment systems act not certain transactions particularly payment systems but even the principle applies to a security settlement you know once paid no and the asset has been delivered and in fact done as a dvp dvp scheme delivery versus payment scheme the sop is they will only deliver upon payment of the asset or security security as a securities trading security all right the fact indicates payment and therefore the transaction is final and irreversible that's settlement finality all right final okay now prediction what about mistakes what about errors and we're not suggesting that there's an error here or a mistake there here i'm not saying that because i don't even believe the story that this is just a glitch all right that this is really just an error right that was beyond their control i don't believe that no uh but but nevertheless assuming that this is a mistake what's the the um um um what's the consequence of that mistake will that mistake authorized now the reversal of this transaction the answer is no you cannot reverse the transaction once settled another the settlement has been finalized no union concept and settlement finality if you have legal issues if you feel that there's a mistake here if you feel like you have a legal course of action to demand the reversal or the demand the return of the funds that's another case that's another cause of action if that's something that either you ask the client no no because i have the legal right to do so they file a case import to demand the recovery of that asset and it will be the court that will reverse the transaction not because there's no settlement finality because there is settlement finality already but because of this legal issue there is not no legal finality yet so so that's one thing that no no no no no yes yeah yeah you're saying uh my mistake vito my glitch little yeah all but that's not relevant why are you reversing the transaction why are you requiring the clients to to return the fans now well the return can be done as some form of like extra judicial demand right and i respect that and then eventually affected users then assuming again that there is really a legal reason or cause of action for the riverside again let me clarify i don't think so okay but the transaction itself cannot be unilaterally reversed anymore because it has attained settlement finality already and this is the hardest thing for them to understand no um and um and i i feel bad about the letters that they said they're affected users i felt like these users are being bullied and then this is really the reason for me as well now to take the case for the platform for some of the affecting users okay noted on that attorney actually tony rafael looking at it we can understand nah why you're passionate and i see based on your explanation there's there's this um legal aspect of finality and unsettlement that the clients are holding onto so this is the legal aspect of it um and new this this this actual industry being new well of course legal experts they're banking on potentially um they might be banking on the fact that the regulation for our infancy and maybe needs clarity actually during my interview with them i mentioned that this might be a blessing in disguise too you said this brings clarity i don't know if you will agree but i do believe so this provides clarity both for regulators users in the community as a whole now how to settle or how to treat cryptocurrency inside a wallet or as an asset or as a currency itself is i think i would i will agree with you this is crypto this is new this is not yet mature regulation is not yet developed no uh therefore you in principle that is a financial service now that the financial intermediary should avoid if a conflict of interest maybe just maybe it's not applicable here but of course that's not true no uh uh from from a legal aspect or from a fairness aspect that is not true okay so once a platform that you're operating all right the platform that you're operating you're an operator of a trading platform and in that same platform you have traders there that's conflict of interest again let's clarify whether they can do that let's also clarify if they can have market makers in their trading platform that they operate and they also do the market making in the same trading platform and i'm not sure if you said earlier that they deny that they have market makers in their platform um do they allow their in-house traders to trade in their own trading platform we have partners where are they it as clients just how they treat the other traders on a legal or personality you know speaking personality and associated with that that's how we end up discussing when i asked that question okay speculation that's how they clarified it um it's up for people traders trading in their own trading platform or market makers market making in their own platform this is a conventional financial service dealers market makers here in the philippines and in your platform you also have assets that may be considered as a security therefore your platform can be viewed as a securities trading platform then even sec as the authority to assert jurisdiction with respect to what you're doing what was happening nothing further attorney young i know young partner and since and be explicitly implied that on pedex cryptocurrency is treated as a security um dinamond well when we read i'm also i also have a wallet in pedex also when we read it it's a currency exchange something like that so your your virtual currency over your fiat currency or other virtual currency likewise so having said that um that's the question when will the sec come into the picture just just for clarification para london saying they know i think my viewers tonight if if in their trading platform okay they list or allow the trading of tokens that are in the nature of a security in that case they will become a trading venue for securities so trading venues whether you call it exchange or trading platform whatever you want to call it right that is being regulated by the spc in sec stands for exchange let's not forget that so wouldn't that open up for um if if that was the case that pdx is um i guess buying and selling uh within the exchange of course the whole idea of let's say security tokens or something like that this would wouldn't this also open up the ground for more like uh legal battles in the future for them if that was the case um yes yes yes uh in my private chat with one of our friends in the community i i said yeah he dox needs to needs to address this problem no i i and at least for my client that the demand is so simple right unlock the account that's a very simple demand unlock the account and my client will withdraw his account response there if they want to sue my client later right for the return of the btc yeah they can do that or they can talk to my client we don't need to we don't need to go to court in legal finality all right they need to unlock the account so that my client can withdraw right right and they feel free to argue before the court why you feel you have legal reasons to obtain a reversal sure but convince the court first or better yet convince us in which case we might be able to you know arrange for a settlement here or maybe just maybe if my client is um is is reasonable the ladies in the world they might see the okay case going back to your your question yes this issue will open other potential legal regulatory uh issues that that uh ducks uh it might be exposed too right because um right because earlier in this uh conversation um i believe we mentioned that pdx is bsp uh license is that correct yeah and then if if and then but um just confirm just to clarify but pdax isn't like sec licensed yes which could be a problem right that's that's why i asked that question which could be a problem because there might be an activity so this is not exclusive just because you have dsp license then you don't need an spc license it doesn't work like that right right so right regarding the sec part then if let's say an account holder holds an sec token technically they're sure i'm just saying just saying just saying here as an example maybe there's an account holder there you know who's been affected that could be holding my client holds xrp okay so if we have a more complete example okay sure let's use that example then um but because that would be uh under i guess sec guidelines because of the the token is viewed as an sec or some kind of uh securities that's right security token um wouldn't uh wouldn't that also mean that there there is grounds that hey um pdx you got to release those tokens first of all you're not so be so supposed to be selling right you know selling or trading that so that's a double whammy for pdax to handle that's the damage control that they should be doing right they might be supporting security tokens right now and they have to immediately supporting those tokens this has been the uh the meat of our investor complaint in their platform they do have so this is not a hypothetical problem all right tdx right now in our opinion and this is what we argue are currently supporting the listing of security tokens okay one of the security tokens according to our investor complaint is xrp okay people xrp happy to explain that and there's another one and this might be something controversial all right we also asserted i i'll have to ask my client for permission if they want to because i'm happy to argue and explain as to why but this might surprise your community we also argued in our investor complaint the tether usdp is in security actually that that's so fun xrp and usd makes them a securities plating platform and without sec registration they could not do this do we have a clear stand uh as uh you you're also i believe you're also familiar with the worldwide or you know worldwide community cxrp and cosdt although um for example cusdt uh in some countries they want over that case that they are not a security team some of them are it's difficult to wrap our head around that concept that stable coin can be considered as a security and i get that fully i i really get that right i i i totally understand that no like for example how can you because our community might be familiar with uh how we test and how you determine whether a crypto asset for example is a security or an investment contract and one of the political factors there is the so-called expectation reasonable expectation of profits yes right okay how can you expect profits if this is a stable point exactly oh yeah yeah i get that i get that but here's what we said investors is only relevant when you're trying to analyze whether something is an investment contract and therefore security okay but under the securities regulation code there is a long list of securities investment contract is only one of them and as we say in our investor complaint okay usd tether falls within the definition of a security definition of what a security is not under the investment um investment contract example but with respect to other types of securities and we also said even assuming even assuming that this is stable then therefore you cannot expect that much profit your definition attendant traffic is now very subjective conceived especially amid amid this um macroeconomic environment where in many countries sky kumala bonds either negative interest rate sila or z rosila could already be construed or interpreted as expectation of profits do you understand what i'm trying to say here right because of inflation no unprecedented quantitative easing negative interest rates are considered security what more this asset that can enable you to to stabilize or ensure that you're storing this value can that be interpreted now as a security and arguably the answer is yes yeah so we try to convince the sec now that the tether is and there's another critical factor i know it's already 757. i feel i need to justify it oh keep going man this is good stuff yeah this you is unless you can prove that you are 100 back or fully reserved the chances are likely is can be considered as a security no it's it's a strong factor it's not conclusive but it's a strong factor in the case of die no use a maker that will decentralize stable coin problem in the case of usdc he buying sacrifice usd coin well having problem they have accounting reports audit reports proving that they have full reserve on problem last week early last week office of the new york office of the attorney general they have evidence they were lambasted not by the office of the new york attorney general that they don't fully serve they but before the new york office of the attorney general they were not able to prove that so we're using that as evidence that tether is not fully back and this further bolsters our theory that uh tether is a security we'll let the sec deci e that but but as far as we're concerned the fact that um um supporting the listing of tether and xrp xrp makes it a securities trading platform which they cannot do which they cannot lawfully operate without sec registration because sec is the regulator of exchanges and trading venues so apparently based from that statement i understand demand so there can be technicalities on it about the security having said that we will also be dragging in some of the other vc is also very the same because basically this is a an industry industry practice like x rp and usdt in their platforms too and they're being regulated by bsp according to you dragging sec in the picture with this case into that although this can be a clarifying matter for everyone in the community it will be uh like i don't know it will send shockwaves into that so is that correct to say that this will be a call for other exchanges too to take action yes and that they should be responsible enough to conduct their due diligence on the tokens that they're supporting which by the way is a an obligation um um that they promised the bsp as part of their licensing conviction that's a licensing condition cinema dc is that they should be conducting due diligence of the token that they're in this thing and for me i'm sorry to say but but my clients my clients don't support xrp my clients are going to vcu my clients don't support usdt i'm happy to recommend to my clients ustc because we can defend it usd there's no way and this is before the speedups issue you're telling me stay away from usdp all right uh and by the way um securities law implications that are more relevant right but we've been telling that so i'm i'm sorry i'm not trying to drive the other exchanges here but yes you are right this is a call to action that they should be more diligent in listing the tokens that they support because supporting the sale or purchase of cryptocurrencies that are in the nature of a security will make them a leading venue you know for for or actually in this regard not in trading venue no tight subunit like for nevertheless they will still breach securities regulation code this is a securities regulation put up the same or purchase or the promotion the issue was distribution of unregistered security otc xrp or usd you're really at rest here and by the way yeah uh this is a complicated legal issue and we will let we will defer to the sec to decide on this but for me as a legal advisor i've taken the position that they could be a security in fact i'm confident that they are right but of course we do respect to the s-e-c s ec will decide on this okay so imagine attached has their own uh share of battle in the united states particularly with this sena with the securities issue and will happen clarity in that part of the world now apparently there are some uh countries like japan for example and that declares that for them xrp is not a security so yeah yes sir okay um you are correct the judicially speaking this case has not reached the court and so we don't have that settled uh decision on whether xrp judicially settled or court decided all right assessment on whether xrp is a security okay but let's clarify this the us ec has clearly taken that position and that is exactly why they are suing the valuable labs in the federal district court in new york sure but let's remember right uh securities law and different jurisdiction vary from country to country i'm just saying applying philippine law all right we can also interpret okay we can also consider people xrp as an investment contract and therefore a security which cannot be sold to the public here in the philippines without registration with the sec i understood the attorney so the same goes with usdt2 right so in other jurisdiction can be the uh determining the security but for hours as far as our laws are concerned based on your interpretation yeah and these guys are these guys are security in its nature anyway thank you very much for the clarification that's very very you know um educating especially and i personally believe this is educating also for me um [Music] and not just in the philippines but also abroad so i know anyway thank you very much for sharing that in a piece of information and attorney rappy so the next question they were being asked going back to the pidax issue this might travel me wendell this might be a stupid question but peridot is a really platform legally speaking a young pedex crazy buy and sell inside those platforms as an employee okay uh legally speaking it's a grey area but from a conflict of interest from a fairness perspective okay i think there should be a policy for that it's not necessarily a no it's not necessarily a no uh that no they cannot trade or as a quality see they should not allow but there should be some policy in place here regulating how or or yeah how how employees can also trade because otherwise this is very much susceptible to insider um uh training and i know for one i know um although i i will be happy if somebody from binance can confirm this okay because i know something i was informed by somebody who is employed in finance okay that uh he needs to deal with this problem and the problem is he has a finance aha she has a finance account okay she has a finance account and that's a policy finance that does not allow according to her okay she told me she told me according to her finance employees are not allowed to have an account in in buy nines no if there's anybody from binance who can clarify this issue and what why do i know this not just me the ladies question to me is how can i prove to by nance that this is not really my account the thing is the lady was actually working somewhere and so like leaving a counsellor and she's maintaining that right right but but it's not really her account and so i i was consulted to uh to to like advise her how can we how can i explain this to binance that this is not really my account so if that is true if finance really has that policy prohibiting or restricting okay their employees to have a finance account i i think that's a great practice and that might reflect the best practice on how debab these trading platforms could avoid conflict of interest actually i can kind of like add something to this um again i can't speak for binance but what i'm saying is uh yeah since i used to work for an exchange i remember this one policy we had and um here here's what it was all about because the servers were set in that country okay let's say the servers were set let's say in singapore okay for the exchange right any employee living in singapore um could not um create an account with that exchange um and i think the reason was because um they it wasn't so much like conflict of interest probably it was but it was just more like um because the servers were in singapore it's it's it's more like they didn't want any like stories going around like oh you know it's insider trading i think maybe that's the precedence why maybe uh for the binance thing i'm just saying yeah it's a good insight it's like um but i agree i agree with what attorney and i mentioned that for employees to avoid no no not necessarily in rumors but issues and concerns as well they should come up there should be something in place but the trading community as a whole it's uh very significant in clarifying so that's the good thing the good thing about that if you have like insiders trading in their own platform correct correct so yeah this is uh this is the one this is also good regulatory side of our industry attorneys but of course uh we would in as much as we would love to discuss more about it let's go back a little more a little with the pdx thing now um aside from the legal legal aspect of it claim the mclaren acting complainants uh and exactly exactly no what do they want to happen just to win tomato to set the record straight it is an impedance and the youngest of many customers claim that then they were locked they said they were able to buy legally as a perspective they are able to acquire legally cryptocurrency based on the parameters of the exchange blaze apparently now that uh the exchange beam now okay my client wants his account to be unlocked okay and um um yeah he will withdraw his funds that's it and with respect to the demand with respect to the demand of um demand of edax uh to return the btc okay my client obviously wants them to stop from doing that you have no claim for this uh and i can i can only speculate that the other affected users have the same uh interest right that those transactions should be maintained not reversed and with respect to the btc or other crypto assets that they were able to withdraw and pdos wants to be returned they want edax to [ __ ] off right no that's understandable um going back to the uh the idea of pdax wanting them to return the clients to return the bitcoin uh i want to go back to the idea that you mentioned about settlement finality according to blockchain in terms of how it is um the process of blockchain once the con once the transaction is confirmed on the blockchain wouldn't that provide precedence for settlement finality well well blockchain is settlement finality in code right because you remember as i said earlier the terms and conditions sneaky that's my settlement finality all right right right are final and irreversible but what happened here there's a central intermediary there's a trusted intermediary that is happy to to disregard that that rule right that they're supposed to enforce blockchain on the other hand is is code right right that's correct it implements its own rule all right the network the protocol it implements its own rule right so that's it's hard-coded settlement finality okay thank you for that clarification so that that basically means the if if if objectively speaking looking at this entire scenario now okay hard-coded finality as you just mentioned and then we have settlement finality according to the terms and agreements of pedex technically in this case pedex doesn't really have a ground to stand on their ground is they're saying is under the terms and conditions they can reverse transactions for certain mistakes or errors right it's there i don't want them to say that i'm i'm like putting it uh in a uh in a way that sounds so simplistic and uh ridiculous but in substance that's how i understand the term that they have a say if there's a mistake they can reverse the transaction that's their ground okay but let's let's okay so i get that part um but i'm trying to um but what i'm trying to say is this technically blockchain you can't reverse it anyway so there's no point in all this this also means that the transaction the settlement right where the client you know if let's say he got the bitcoin at 300 000 um because that was done on that was done on chain yeah that was done on chain meaning the settlement was done on chain the exchange gave the client x amount of bitcoin for you know settlement purposes so technically what i'm trying to get at as blockchain already provides the the settlement the settlement finality thing okay then if we were to check the audit records of pdx of of them sending the payment to the client that that would already like finish this case basically in a sense what i'm trying to say is like i side with you on this and i side with your client but it's more like um i really feel that there's something going on here and where i feel that why the hostage taking part i really feel like it's it's more like hey we kind of don't have the the liquidity right now uh either give it back or something something that that's what i'm feeling from this entire conversation because you know if you're in exchange you made and it's legal everything it looks legal according to this entire con uh conversation you know there was no bots involved i'm assuming that this is an actual person on in front of the screen making the trade okay so that's an organic trade so if i i'm assuming your clients account or people who are who were also affected whose accounts were locked out and they were you know in front of their screens doing organic trades it kind of makes you wonder you know why the hostage taking unless you don't have the liquidity that's that's what it really feels like it comes down to sometimes in this in this conversation but but yeah that's just that's just my uh point let me just quickly remark again removing my uh right as a counselor and he just are speculating on what happened here if you're saying that you think that this is an organic trade and they're saying they're in snowball then could it be really the case that there was an error here i i i don't think so the reset price i mean your case right right right um uh some of the field orders of my client are three million some are three 000. one is 301 million i think so you see 301 million 3 million 301 million 300 000 and 3 million we're talking about how what they they priced bitcoin at that time that this happened right correct that was the preset price and these are by the way these are information uh that we forwarded to the bsp and sec i would be happy to disclose it here with my client's permission but i will be happy to show those emails confirming the field orders right and those preset prices so i'm just saying this right now because you said you think this might be an organ this might be organic rings [Music] they seem to manage it that way and uh oh a personal personality i i as i view it uh we wanted to hear the side of the traders they they said this they said that but at the end of the day um um this might be a stupid question though pero if ever i will with these clients of yours or that with the end users particularly those are those who you're present are they willing to open their i think that's always an option but the show stopper here is the the locking of the account okay because that indicates bad faith is it me which just thinks that this is like a hostage-taking thing or call it whatever you want ransom or what like and they can only do this because they have the funds right they are an intermediary that we trusted with the positive i'm not happy that's account holder by the way i'm not right but i'm just saying traders and losers trusted they'll put their funds there okay and then when they withdraw it acts as a fight usually role to allow the withdrawal subject to of course to certain uh uh limitations like for purposes of money laundering or they they can like suspend not withdrawals or subject to know your client procedures okay or other legal reasons like samsung's evasion terrorist financing failure term the legal reason for them illegal are like for example they're claiming it and they believe they have legal reason to like claim that token then they can lock the client from the account and we question that all right okay the pdx can restrict withdrawals or the activate accounts if there are like money laundering involved uh or for purposes of kyc or know your client or procedure or table if there's steroids financing involved or other criminal illicit activities was able to find no this beautifully priced bitcoin at 300 000 purchase that list the illegal or illicit activities my client did not hack their website or their platform right my client found a good dream in my view this is 90 discount this is not like i i will stop myself my my from there but but that's just 90 percent and that's not that's not totally unreleased right because of that i know that's a ridiculous example i of course i understand and that's just hypothetical example right but what i'm saying is you 90 percent of this count no it's not and we do have cases and that's why we're very confident about this this our the our clients position we do have cases abroad sustaining distance actions as legitimate transactions smoking okay compare enough attorneys have a story of using a use case that we had not just here but also abroad he said they're also um citing examples [Music] yes of course but he's just saying that to say that the precedents are against him but but that the precedence are in favor of my client and we're very happy to leverage that and our burden now is to convince the financial regulators that these decisions abroad make sense that t ey should be adopted here in the philippines not blindly but because they are reasonable right they are reasonable interpretation of what should be done in scenarios like this noted attorney so experience the presidents although it happened no in another country makes sense no makes commercial sense makes legal sense reasonable yeah figure thank you for that uh anyway uh we will i will not hold you for long attorney a few questions [Music] and so this one this one i think should be answered we're discussing the accounting or cryptocurrency for example like uh you know in accounting to address that maybe we can discuss a little on how it should be treated in an accounting perspective debit credit box something like that is some cryptocurrency it's legally obtained xrp this is usd bitcoin uh how do you do the accounting of this in our books okay okay well the first answer that i should give is there is already some guidelines from the philippine sec on this securities and exchange commission they issued it in 2019 if i remember correct that circular number 22 series of 2019 where they in in that circular they approve um as easy approve your interpretations and that guidance already provides some standard or some basis on how we do the accounting that's the best answer that i can give in response to this question because the the yeah i i i need to to say also that one i'm not an accountant and two even if i'm an accountant i expect that this will be a nightmare no uh it will be a nightmare to to account for for crypto assets now the guidance from the sec is helpful but it does not like um uh obliterate the problem uh the problem of accounting and by the way this is not just in the philippines not accounting for crypto assets it doesn't really matter and also whether it's a security order [Music] guidance differentiate the encrypt on a security token a commodity but the guidance is one thing the actual implementation on how you do it the tedious process of bookkeeping going back to the products issue if this will be reversed the wasabi this is being reversed by uh pidax on their end if this will be reversed [Music] and i'm reversing this transaction i will probably reverse them in my favor there must be some oversight on the financial regulator affected users or do we just trust edax that they will rewrite or reverse these transactions as is or before the event or can come in further it's really difficult i know it's difficult but and i also feel bad for redux this will be challenging there should be also representatives from the affected users now in this exercise assuming that they should reverse because i'm not agreeing also that they should settlement finality hashtag settlement finality right but if they are being authorized somehow to reverse this and assuming that's legal then for this process or exercise to have oversight from the affected users i see uh maybe that answers our question for our uh viewer there you know you know some of the questions they highlighted so i thought this is a curious question for me um i promise i'll make this very quick [Music] i cannot figure out what that means now what that statement means will you i know will you expand that it's a call for the community to have the affected users so that statement my client is not a car what was what was remarked by roaring was the bets during his um um statement while uh during the senate healing of a committee on financial services when they were investigating uh gamestop wasting bets suspension robin hood the reference to yeah it's a tribute to roaring kitty for standing up for the community that their communities the wall street vets we also have a community here and i urge the community to support my client and the other affected users that's what i mean when i said my client is not a part so it's a para delis empadano with what happened in the united states for the benefit of our viewers it's a parallelism that you use let's say there's a similarity yeah for those who get it it's a call it's a call no we yeah we we need help okay that's fair fair enough fair enough and a good and a good parallelism actually um if i can you know give that comment the best help we can get is from the community the financial regulators can help us and it's easy to er it's too early to say whether they will be able to but we trust that they would be able to but at the end of the day the best community i mean that the best uh yeah the the best help we can get is from the community and i don't need to say what the community need to do thank you attorney for that clarification in that anonymous explanation why do you have any further questions uh not not at the moment actually i'm good yeah me too uh so before we let you go attorney is there any um comment or message you wanted one way to the community and also to your adversaries in idaho if if there's any it's going um yeah i just wanna yeah yeah actually what i need to say for the community i just wanna thank you for this opportunity we've overextended i i don't care uh as long as you allow me to uh yeah discuss this matter so thank you thank you um i hope you can do this again next time we will do a series of it discussing not just with that maybe we can do some uh if there's any value in my insights and as long as i'm still making sense here i do understand that uh my state my my opinion on that usd might be um unpopular and might be really good for many of the community members it's okay we can we can debate on this and i'll be happy to do so at the end of the day it will be the securities regulator who will decide on this right correct now no problem thank you very much attorney for gracing our community with your presence and that there you go guys for our viewers for the last couple of hours and with that i would like to say happy weekend to everyone who is viewing us today not tonight and someone who knows good morning good afternoon good night whatever time zone you are into thank you very much and goodbye happy weekend guys happy weekend guys you