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00:00How are you looking to maneuver some of these regulatory concerns that exist in the US let alone across the world. Well said Ali first of all thanks so much for having me. It's a really really important questions and I guess I quibble a little bit with the premise. And the premise seems to be the regulations bad for crypto or it's scary for crypto. Truth is we're in a transition point where the number of people participating in this market has gotten so big that you need basic frameworks. And that's actually a sign of the maturity and the growth of the market more than it is a sign of something bad. What I think it does mean though is that exchanges like ours you know the biggest exchanges in the world need to be very sophisticated about how do you allow decentralization to occur. How do you bring these assets to the market while ensuring good risk management compliance with law. The disclosure of what you're selling to your customers in those kinds of things. And that's why we're so excited about bringing the former California financial institutions commissioner Manny Alvarez on board. We need people with those kinds of backgrounds who have been policy makers and senior roles to help us navigate these shoals. And I think the successful companies are going to see that and try to compete for that kind of talent brand. Can you clarify the relationship for viewers between finance U.S. and buying ads globally which is the world's biggest crypto exchange. By far I know that there's sort of like there's their separate legal entities. But can you explain like how are you owned by them or what is the what is the relationship. Yeah. So we're not owned by them at all by NASDAQ. Com doesn't own a single share of finance U.S. We share a common founder and historically finance U.S. licensed the name and some technology from finance dot com. We don't think about it really is that a couple of years ago it was clear that the world was segmenting into two basic kinds of markets. You had most of the world which was still learning about crypto didn't have crypto licenses or requirements. And then you had an emerging part of the developed world that started putting crypto within a regulatory framework. We were founded precisely to be a regulatory compliant licensed exchange. So we've got 43 U.S. states that allow us to trade in their borders based on licenses and other other legal compliance mechanisms that we have will eventually have all 50 state licenses. And then of course there are other parts of the world served by a different company. But other than licensing the name and licensing the technology operate independently we have a separate board of directors. We have a separate ownership. And you know you might think about us as essentially a finance branded exchange that's doing our own business here. They're the biggest in the world. We're the eighth biggest in the world. Different companies. All right. So we've got the brand here in the U.S. now. Brian let we talk about the U.S. regulation or lack of it. And I'm curious as to your thoughts as to why it's been so slow to see something a little bit more formative out of the SCC and the other regulators here whether it's setting up guardrails whether it's approving ETF there just doesn't seem to be any real momentum at least not that I can see publicly but remain. That is a great comment. And I think honestly it says more about the U.S. regulatory system than it says about crypto. To be honest part of it is you know in this country we set up a lot of different regulators and gave them each their share of turf. So the issue is and I know this having having run one of these agencies there's a little bit of inherent turf conflict between you know the Fed and the FCC or the FCC and the CFTC. Everybody's trying to grab a little bit of turf. And because of that it's hard to get clarity. If you look at a country like the United Kingdom where there's basically a single regulator for the entire financial system that's the Financial Conduct Authority. It's a lot easier to get clarity over here. You've got competition among agencies. There's overlap in their jurisdiction. And so at some level it's tough to deal with. But I will say we're not as far behind as people might think. I mean at the end of the last administration all of the major regulators myself included got together through the president's working group on financial markets and started providing some clarity on certain crypto assets like stable points. And I think that's an example of how our regulatory system can adapt if all the regulators work together. Let me ask you a question about a decentralized finance defied tokens and so forth. Are some of these de facto equities and are trading as such. Now it's hard to say. I mean they're certainly they're decentralised exchanges that are selling crypto tokens you know without the intermediary or broker and you know some crypto tokens to Remains Point are classified as securities and some are not classified as securities. So it depends a little bit on what's being traded. I think the main takeaway for D5 for people who are new to the concept is just the idea that usually in this country we're used to paying middlemen a fee for the privilege of buying stocks and bonds or saving in a savings account or whatever. Right. So we pay a fee to a bank or a fee to our stockbroker to do that for us. And the purpose of defy is to eliminate the middleman and make the stuff cheaper. But if the underlying thing is regulated as I've said before the underlying activities should be regulated as well. Brian you were a primary banking regulator in the United States and now you're a company that is more on the D5 side of things right. So how concerned should the banking industry be concerned about defy at the end of the day. At what point does it start to be a threat. Well you know to me it depends on whether the banking industry adapts as it always has or whether somehow it treats. This is different. If you think about it if you go back 30 years. Banks used to be really threatened by money market mutual funds. Later they were very concerned about index funds that paid higher rates of return than savings accounts to it at one time. Banks were really scared of computers because of the idea they could maintain ledgers faster than the old. You know that the bank employees themselves could and the banks always managed to adapt to those kinds of environments. So my belief is and what I tried to do with the FCC is to make sure that banks understand what's coming that they understand that defy and other crypto projects are competing for the same kind of financial services banks typically serve and to adapt. Right. Banks have the customers. They are as you know the bank robber once said where the money is. They have an ability to succeed in this environment if instead of resisting it they understand it and adapt to it. I think that's very doable. Brian you've been in this role for really a number of weeks now. Right. It's a pretty new job. But also what I'm wondering what your most immediate plans for expansion are to improve customer service get past regulators and ultimately get ready for a potential public listing. Well Sonali Basak that is a great question and that the first thing you do anytime you step into a job like that is think about what are the four things I need to do to make this company a wild success. So the first thing is we're not going to get around or evade or otherwise get by regulators as you say. What we're going to try and be is the most transparent partner and regulators could possibly be. So we're going to be in plain sight. Everything we do is going to be well described and well disclosed. And I'd start with that. But in terms of the other things we need to do to be successful the first thing is we need to grow our exchange business. And that means making sure we serve all 50 states New York and Texas and the other states. We're not in need to be added to our list and we'll get there by the end of the year. As far as our plan. The second thing we need to make sure we're doing is bringing as many assets to market as people find valuable. And right now you can buy 54 or fifty six assets on our exchange but I think they're easily 65 or 70 that are legal and that people find valuable that need to be added to our platform. So you'll be seeing us adding assets starting next week two or three a week for the next several weeks as soon as they pass our listing process. And that will allow us to grow. The third thing we need to do is we need to transition Sonali from being an exchange to being a product company. If you think about it you know the early days of the Internet there was AOL who offered little more than a portal and email. And then along came Google and figured out all of the valuable products that could be added to the Internet. We're going to do that for crypto in a whole bunch of ways that you'll hear about in the coming months. And then finally we need to you know enrich the financial ecosystem in which crypto exists. And that means finding us compliant ways of bringing derivatives to market. We need to work with our partners to make sure that a Bitcoin ETF eventually does come out because it's safer and it's better disclosed and easier for people to access the primary products that exist today. And I expect we'll be the portal for a lot of those innovations. So at the end of the day it's adding assets it's adding states as being more useful to people.

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Crypto Exchange Binance.US Hires Ex-California Regulator Alvarez

Brian Brooks, the CEO of Binance.US, discusses the regulatory crackdown on cryptocurrencies and its decision to hire the former commissioner of the California Department of Financial Protection and Innovation, Manuel Alvarez. He speaks with Joe Weisenthal, Romaine Bostick and Caroline Hyde on Bloomberg's "What'd Ya Miss?" (Source: Bloomberg)

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