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00:00EMILY: I ' M EMILY CHANG, AND JOINING ME NOW IS THE CEO AND COFOUNDER OF CRYPTO.COM, JOINING US ON A LATE EVENING IN SINGAPORE. THANKS FOR STAYING UP FOR US AND GREAT TO HAVE YOU HERE. KRIS: THANKS FOR HAVING ME. GREAT TO BE HERE. EMILY: I WANT TO START LOOKING AT THE YEAR AHEAD IN CRYPTO BY GOING BACKWARDS. TALK TO US ABOUT HOW THE MARKET EVOLVED OVER THE LAST YEAR, BECAUSE THERE WAS A HUGE PICKUP IN ADOPTION, AND I WONDER IF YOU THINK WE HIT MAINSTREAM, QUOTE UNQUOTE. KRIS: ABSOLUTELY, IT WAS A FANTASTIC YEAR FOR CRYPTO IN GENERAL. WE GREW THE INDUSTRY FROM ABOUT 100 MILLION PEOPLE TO ALMOST 300, SO A FACTOR OF THREE. INCREASE PARTICIPATION BOTH IN RETAIL AND OTHER AREAS, AND WHEN CRYPTO ENTERED THE MAINSTREAM, IT IS NOW PART OF THE CULTURE. IT IS THIS UNSTOPPABLE AVALANCHE. WE ARE VERY HAPPY THAT WE ARE ABLE TO PLAY A PART IN THIS RISING ADOPTION. EMILY: IN A NEW REPORT THAT YOU ARE JUST NOW PUTTING OUT, YOU TALK ABOUT BITCOIN VERSUS ETHEREUM. WHICH WAS STRONGER AND WHY? KRIS: WE DON ' T REALLY LIKE PICKING WINNERS. PEOPLE SEE A MULTI-CHAIN FUTURE, WITH BOTH CHAINS SERVING DIFFERENT PURPOSES. I THINK IT REMAINS TO BE SEEN WHAT ADDITIONAL INNOVATION WILL COME OUT OF THIS SPACE. EMILY: TALK ABOUT HOW ETHEREUM WEEKEND OVER THE SECOND HALF OF THE YEAR, AND WHAT DO YOU CHOP THAT UP TO, GIVEN THE MERGE AND FUTURE OF ETHEREUM? KRIS: YOU COULD SEE A RISE OF MULTIPLE NETWORKS IN THE FIRST HALF OF THE YEAR, AND IT CREATES MORE DISPERSION IN BOTH THE ATTENTION AND IN TERMS OF PEOPLE ' S INVESTMENTS. BUT I DON ' T THINK IT ' S NECESSARILY BAD. AGAIN, THE FUTURE IS MULTI CHAIN, AND DIFFERENT FEATURES WILL BE USED FOR DIFFERENT USE CASES. OVERALL, A VERY STRONG YEAR FOR THE INDUSTRY. EMILY: SO LET ' S TALK ABOUT THE YEAR. YOU EXPECT GLOBAL CRYPTO USERS TO HIT 300 MILLION THIS YEAR. WHAT MAKES YOU THINK WE ARE GOING TO GET THERE? WHAT GIVES YOU THAT CONFIDENCE? KRIS: ONE OF THE KEY THINGS TO LOOK AT HERE IS THE EXPANSION OF USE CASES. 2020 ONE, VERY STRONG TRACTION, BLOCKCHAIN GAINING, AND MOBILE GAMING AS A USE CASE IS FREQUENTLY USED. BLOCKCHAIN USERS VERSUS 300 MILLION CRYPTOCURRENCY USERS GLOBALLY. IT ' S GOING EXTREMELY RAPIDLY. I THINK PEOPLE UNDERESTIMATE HOW LONG IT TAKES TO GET TO THIS INFLECTION POINT, BUT ONCE YOU ARE THERE, IT IS GOING TO SNOWBALL. THERE IS EFFECTIVE INNOVATION HAPPENING IN OTHER AREAS, BUT IT IS SOMETHING WE ARE VERY EXCITED ABOUT AND INVESTING IN HEAVILY. EMILY: SPEAKING OF SNOWBALL, ARE WE IN A CRYPTO WINTER? WHAT IS HAPPENING RIGHT NOW? KRIS: LOOK, THE MARKET IS STILL NASCENT AND HAS BEEN HIGHLY CYCLICAL, BUT IT IS ALSO CONNECTED TO WHAT IS HAPPENING IN THE BROADER SYSTEM, RIGHT? ONE OF OUR MOVES IS FROM THE EQUITY MARKETS OR BOND MARKETS, THIS SPILLS OVER INTO THE CURRENCY SPACE AS WELL. I THINK EVEN THOUGH YOU MAY SEE SOME SORT OF SLOWDOWN HAPPENING IN Q1 AND Q2, THE INDUSTRY IS ON SUCH A STRONG TRAJECTORY WITH SUCH STRONG HEADWINDS, THE SECOND HALF OF THE YEAR IS GOING TO BE PHENOMENAL AGAIN. EMILY: DO YOU THINK WE GET TO 100,000 BY THE END OF THE YEAR? KRIS: I AM NOT VERY GOOD AT PREDICTING PRICES. WE ARE MORE IN THE BUSINESS OF BUILDING RATHER THAN FIGURING OUT WHAT THE MARKET WILL DO. I THINK A GOOD IDEA IS TO PICK A VERY LONG TERM VIEW AND SEE WHAT THIS TECHNOLOGY CAN DO TO THE ENTIRE INTERNET OF THE COURSE OF FIVE TO 10 YEARS. IF YOU TAKE THIS, WHERE YOU DON ' T REALLY CARE ABOUT THE MOVEMENTS OF TODAY OR MONTH-TO-MONTH. EMILY: LET ' S TALK ABOUT THE BUSINESS. WHAT SETS CRYPTO.COM APART? WHAT IS YOUR SPECIAL SAUCE AND WHY SHOULD TRADERS CHOOSE YOU? KRIS: WE HAVE AN ENTIRE ECOSYSTEM OF PRODUCTS, FROM RETAIL PRODUCTS FOR SOMEONE WHO JUST WANTS TO BUY THEIR FIRST COIN ALL THE WAY TO TRADITIONAL TRADERS THAT TRADE HUNDREDS OF MILLIONS OF DOLLARS EVERY DAY, AND EVERYTHING IN BETWEEN. SO YOU CAN FINANCE IN ONE PLACE FROM A REGULATED PLATFORM THAT HAS LOW FEES. THE BUSINESS HAS BEEN GROWING PHENOMENALLY. WE GREW ABOUT 22 TIMES OUR REVENUE LAST YEAR. IN TERMS OF THE PRODUCTS THAT WE OFFER AND HOW WE SERVE THEM. EMILY: THE LAST 48 HOURS FOR CRYPTO.COM HAS BEEN A LITTLE HARROWING. YOU PAUSED WITHDRAWALS AND TRANSACTIONS DUE TO UNAUTHORIZED ACTIVITY. TRADERS REPORTED SEEING SUSPICIOUS ACTIVITY. WHAT HAPPENED HERE. WHAT WAS BEHIND THIS HACK? KRIS: FIRST AND FOREMOST, WE INVEST VERY HEAVILY IN SERVICE SECURITY. WE HAVE 200 PROFESSIONALS AROUND THE WORLD WHO COLLECTIVELY SPENT THE LAST FEW YEARS BUILDING A VERY ROBUST INFRASTRUCTURE. THERE IS DEFENSE IN MULTIPLE LAWYERS. SOME OF THESE LAWYERS WERE BREACHED, WHICH IS LINKED TO 400 ACCOUNTS HAVING UNAUTHORIZED TRANSACTIONS. WE STOPPED ALL WITHDRAWALS AND FIXED IT AND WERE BACK UP IN ABOUT 13, 14 HOURS AND DURING THE SAME DAY, ALL THE ACCOUNTS AFFECTED WERE FULLY REIMBURSED, SO THERE WAS NO LOSS OF CUSTOMER FUNDS. OBVIOUSLY IT IS A GOOD LESSON AND WE ARE CONTINUOUSLY STRENGTHENING OUR INFRASTRUCTURE. EMILY: ONE OUTSIDE ANALYST ESTIMATES $15 MILLION OF LOSS. I SAW ANOTHER ESTIMATE THAT SAID 33 MILLION DOLLARS. CAN YOU GIVE US A NUMBER? KRIS: WE ARE STILL WORKING ON A POSTMORTEM FOR THE INCIDENT, BUT IT WILL BE POSTED ON OUR BLOG AND THE NEXT COUPLE OF DAYS. WE WILL LEAVE THE NUMBERS UNTIL THEN. WE ARE WORKING ON IT. IN ANY CASE, ONE HAS TO REMEMBER, GIVEN THE SCALE OF THE BUSINESS, THESE NUMBERS ARE NOT PERFECTLY MATERIAL AND CUSTOMER FUNDS WERE NEVER AT RISK. EMILY: I ' M CURIOUS WHAT MORE YOU ARE DOING ABOUT THIS. WHAT ARE THE PLANS YOU ARE PUTTING IN PLACE NOW TO MAKE SURE THIS DOESN ' T HAPPEN AGAIN IN THE FUTURE? KRIS: THERE ARE DIFFERENT WAYS OF SECURITY WE ARE IMPLEMENTING, AS WELL AS SOME NEW PROGRAMS WE WILL BE LAUNCHING TOGETHER WITH THE POSTMORTEM. I DON ' T REVEAL TOO MUCH AT THIS STAGE, BUT THEY WILL KNOW IN A COUPLE OF DAYS HOW WE ARE GOING TO ADDRESS THIS. HISTORICALLY, WE LED THE INDUSTRY IN TERMS OF SECURITY STANDARDS, CERTIFICATIONS, AND VERY HEAVILY INVEST IN HAVING GREAT INFRASTRUCTURE. WE WILL CONTINUE STRENGTHENING IT AND LEADING THE INDUSTRY TO KEEP THIS PLACE MORE SAFE FOR EVERYBODY. EMILY: AS I MENTIONED, YOU ARE JOINING US EARLY IN SINGAPORE AND THE EXCHANGE IS BASED IN SINGAPORE. HAVE YOU HAD ANY CONVERSATIONS WITH THE SINGAPORE MONETARY AUTHORITY? HAVE THEY REACHED OUT? WHAT HAVE YOU TOLD THEM? I AM CURIOUS WHAT THEY ARE ASKING. KRIS: AT THIS STAGE, WE DID NOT SEE ANY OUTREACH FROM THE REGULATORS. HOWEVER, WE RESPECT THIS AND WILL SHARE IT WHEN AN INQUIRY COMES IN. YOU KNOW, IT IS PART OF THE PREPARATION AND PART OF THE PROCESS OF CLOSING THIS INCIDENT IN THE POSTMORTEM. EMILY: WHAT ' S IT LIKE OPERATING IN SINGAPORE? WE HAVE SEEN SOME OF THE REGULATORS TAKE DIFFERENT APPROACHES FROM CRYPTOCURRENCIES AROUND THE WORLD, IN THE U.S. AND CHINA. TALK TO US ABOUT THE POLICIES THERE. KRIS: SINGAPORE IS SUPPORTIVE OF THE CRYPTOCURRENCY INDUSTRY IN GENERAL. IT ' S A PRETTY ROBUST FRAMEWORK. I THINK OUR COUNTRIES SHOULD BE LOOKING AT -- WE ARE IN THE PROCESS OF SECURING TWO LICENSES , SO OVERALL, A VERY, VERY SUPPORTIVE ENVIRONMENT. I THINK IT IS A GREAT PLACE FOR INDUSTRY PLAYERS AND THERE ARE QUITE A LARGE NUMBER OF PLAYERS THERE. EMILY: AS I UNDERSTAND IT, WE ARE SEEING SOME SORT OF CRACKDOWN HAPPENING IN SINGAPORE. CRYPTOCURRENCY ATM ' S ARE BEING SHUTTERED AND THERE IS AN IMPACT ON MARKETING. HOW IS THAT IMPACTING YOUR PLANS? KRIS: THE GENERAL POINT OF VIEW OF THE REGULATOR IS THAT THE MARKETS ARE STILL TOO VOLATILE FOR THE GENERAL PUBLIC TO PARTICIPATE IN, SO THEY WANT TO REIN IN SOME OF THE MARKETING ACTIVITY. I THINK OVER TIME, AS THE INDUSTRY REACHES NEW STAGES OF MATURITY, THIS WILL BE GRADUALLY RELAXED. IT DOES NOT AFFECT OUR PLANS IN ANY MEANINGFUL WAY. WE ARE COMMITTED TO ANTI-USE INVESTMENT IN SINGAPORE. WE HAVE A LARGE TEAM THERE, MORE LICENSES, AND IT IS AN IMPORTANT MARKET FOR US. EMILY: SPEAKING OF LICENSES. LAST MONTH, IN THE UNITED STATES, THE STAPLES CENTER BECAME THE CRYPTO.COM ARENA. $700 MILLION FOR NAMING RIGHTS OVER 20 YEARS. WHAT DOES THAT PARTNERSHIP DO FOR YOUR BUSINESS AND YOUR BRAND? KRIS: YOU STARTED THE CONVERSATION BY ASKING WHETHER THE INDUSTRY WENT MAINSTREAM LAST YEAR. I THINK THIS IS A MOMENT -- STAPLES CENTER IS REALLY SPECIAL. IT IS SUCH AN ICONIC VENUE AND PEOPLE CARE DEEPLY ABOUT ITS LEGACY AS WELL AS WHAT WILL HAPPEN WITHIN IN THE FUTURE. SO IT WAS A WAY FOR US TO MAKE A STATEMENT AND SAY THAT CRYPTOCURRENCY IS HERE TO STAY. IT ' S A 20 YEAR COMMITMENT, SO IT ALSO SIGNIFIES OUR LONG-TERM VIEW AND THE FACT THAT WE ARE VERY BULLISH ON THE INDUSTRY AND WHERE IT IS GOING. EMILY: YOU ALSO HAVE SOME OTHER PARTNERSHIPS GOING, SPORTS PARTNERSHIPS WITH THE PHILADELPHIA 76ERS, THE AUSTRALIAN FOOTBALL LEAGUE. YOU ARE DOING A DEAL WITH ITS FOOTBALL LEAGUE, WHICH IS THE FIRST OF ITS KIND FOR WOMEN ' S SPORTS. WHAT WAS THE MOTIVATION FOR THAT AND WHAT DO YOU THINK ABOUT THE LACK OF WOMEN IN CRYPTO? AS OWNERS AND AS BUILDERS. WHAT CAN WE DO TO CHANGE IT? KRIS: THE PRIMARY REASON FOR THE PARTNERSHIP, THERE IS AN ALIGNMENT OF VALUES. WE ARE ALL ABOUT SELF-DETERMINATION AND REACHING YOUR OWN GOALS, DRIVING YOUR OWN GROWTH. SO WE ARE SPEAKING THE SAME LANGUAGE. MORE BROADLY FOR US, THESE PARTNERSHIPS ARE PART OF A STRATEGY TO BECOME ONE OF THE TOP 20 BRANDS IN THE WORLD, AND BRANDED PEOPLE -- AND A BRAND THAT PEOPLE HAVE AN EMOTIONAL CONNECTION WITH AS TO THE LEVEL OF VALUES. WE WANT PEOPLE TO UNDERSTAND WHAT THIS STANDS FOR AND HOW DOES IT CONNECT WITH ISSUES THEY CARE DEEPLY ABOUT? EMILY: WHAT KIND OF ENGAGEMENT ARE YOU SEEING WITH ATHLETES MORE BROADLY? WHAT DO THEY CARE ABOUT, ESPECIALLY IN COMMUNITIES THAT ARE REALLY PASSIONATE ABOUT SPORTS? KRIS: RIGHT, SO IF YOU LOOK AT ATHLETES, I THINK THERE IS A LOT OF INTEREST IN THIS NEW SPACE AND HOW IT IS GOING TO IMPACT SPORTS IN GENERAL, THE WAY THEY INTERACT WITH THEIR FAN BASE AND THERE IS DEFINITELY A LOT OF INTEREST. WE ARE HAVING QUITE A NUMBER OF INTERESTING DECISIONS. I THINK IT IS STILL A LITTLE TOO EARLY TO TALK ABOUT IT. EMILY: I HAVE TO ASK YOU ABOUT YOUR MARKETING CAMPAIGNS. YOUR MATT DAMON AD GOT A TON OF PUBLICITY. IT IS THE IMAGERY ON YOUR HOMEPAGE. IS INVESTING IN CRYPTO AS BRAVE AS SOMETHING MOUNT EVEREST? KRIS: I GET THIS QUESTION A LOT. I THINK THE REASON WHY THE PARTICULAR CAMPAIGN RESONATES WITH PEOPLE, IT ' S ABOUT BUILDING STUFF AND NOT BUYING STUFF. WHAT WE ARE BUILDING AS AN INDUSTRY, AS AN ECOSYSTEM, IS THE NEXT ITERATION OF INTERNET. AS A GOAL, IT IS VERY AMBITIOUS AND IT ' S ONLY NATURAL THAT PEOPLE ARE GOING TO DOUBT WHETHER THIS CAN BE DONE OR WHETHER IT WILL MAKE SENSE. SO WE WANTED TO GO OUT WITH A MESSAGE THAT UNDERSCORES THAT THIS IS A LONG JOURNEY THAT REQUIRES A COMMITMENT AND GRIT AND COURAGE, BUT I BELIEVE VERY STRONGLY THAT WE WILL GET THERE. IN THE END, WHEN WEB THREE REACHES ITS FULL POTENTIAL, THE USER IS NOT GOING TO BE THE PRODUCT. THE USERS ARE GOING TO CO-OWN THE NETWORKS. I THINK IT IS SOMETHING WE ARE WORKING ON. IT IS PROFESSIONALLY EXTREMELY IMPACTFUL. EMILY: DOES THAT MEAN YOU WILL KEEP MATT DAMON AROUND IS THE FACE OF CRYPTO.COM? KRIS: WE LOVE MATT DAMON. WE WANT TO DO MORE STUFF WITH HIM. I THINK A LOT OF CRITICISM AROUND THIS SPOT IS FROM PEOPLE WHO EITHER DIDN ' T SEE IT OR THEY ARE FUNDAMENTALLY NOT SUPPORTIVE OF THE INDUSTRY AND DON ' T HAVE THE FULL VIEW OF THE KIND OF POTENTIAL IT HAS TO IMPROVE THEIR LIVES. EMILY: WELL, IF THEY WANT TO SEE IT IN FULL, THEY CAN GO TO CRYPTO.COM. LET ' S TALK ABOUT THE THEMES THAT YOU THINK ARE GOING TO DRIVE THE INDUSTRY IN THE YEAR AHEAD. SOME PREDICTIONS, PLEASE. KRIS: PREDICTIONS -- DEFINITELY GAMING AND METAVERSE. IN A SENSE, GAMING IS THE GATEWAY TO THE METAVERSE. THERE WILL BE PLENTY OF ACTIVITY IN THIS SPACE. FOR US, WE TAKE THE APPROACH, WE WERE GOING TO GET INTO THE M & A SPACE, THE GAMING SIDE OF THINGS. NOT TO THE SIZE OF MICROSOFT ' S $70 BILLION ACQUISITION, PROBABLY A LITTLE BIT SMALLER, BUT WE ARE WORKING ON THIS SPACE. I THINK THIS IS GOING TO BE ABSOLUTELY CRITICAL, BUILDING NEW EXPERIENCES IN THE METAVERSE WITH GAMING BEING THE GATEWAY TO ONBOARD MORE USERS INTO THIS SPACE. STILL, -- > > STILL, INVESTORS WANT MORE REGULATION. WHAT WOULD YOU LIKE TO SEE? KRIS: I THINK THERE IS AN ELEMENT OF EDUCATION. THE INDUSTRY HISTORICALLY HAS NOT DONE A GOOD JOB OF OF GOING TO THE REGULATORS AS AN INDUSTRY, WITH A CLEAR PLAN AND A CLEAR MESSAGING. SO YOU ' VE GOT SOME INDIVIDUAL EFFORTS COMING FROM DIFFERENT PLAYERS, AND THAT MAKES IT MORE DIFFICULT FROM REGULATORS AROUND THE WORLD TO UNDERSTAND THE SPACE. WE SHOULD BE MORE HELPFUL IN GUIDING THEM SO THEY UNDERSTAND HOW TO REGULATE EFFECTIVELY IN ORDER TO REACH THEIR POLICY GOALS. I THINK WE HAVE TO DO BETTER AS AN INDUSTRY ON THIS POINT. LUCKILY, THERE IS A LOT OF WORK THAT IS BEING PUT INTO THIS BY A NUMBER OF PLAYERS, SO WE WILL MAKE SURE THAT OUR VOICE IS HEARD IN THE COMING MONTHS AND YEARS, AND WHATEVER LAWS ARE BEING PUT IN PLACE, YOU KNOW WITH MARKET CLARITY, CAN PROTECT INVESTORS AND GAIN ENOUGH INNOVATION. EMILY: CRYPTO.COM DOES HAVE AN OPPORTUNITY TO PLACE BETS ON THE FUTURE. THERE IS A LOT OF MONEY FLOWING THERE, INVESTING IN NEW CRYPTO PROJECTS. WHAT ARE YOU MOST EXCITED ABOUT? WHAT PROJECTS WILL YOU SEE, FUND AND SUPPORT? KRIS: OUR FUND WAS LAUNCHED ONLY ABOUT NINE MONTHS AGO. IT ' S A $500 MILLION FUND. WE HAVE MADE ABOUT 30 INVESTMENTS SO FAR. IT IS TYPICALLY IN A STAGE. THE AREAS WE INVEST IN, THE METAVERSE DEFINES, AND ALL THE THINGS THAT YOU COULD FIND THAT YOU ARE WELL AWARE OF -- I THINK THE KEY REASON WHY FOUNDERS LOVE WORKING WITH US IS FIRST AND FOREMOST, WE ARE NOW THE THIRD LARGEST CRYPTO PLATFORM GLOBALLY IN TERMS OF OUR USER BASE SIZE. WE ARE FOUNDERS OURSELVES, SO WE ARE SUPER QUICK TO MAKE DECISIONS, WE DON ' T SPEND TIME FUNDRAISING WHEN WE SHOULD BE SPENDING TIME BUILDING STUFF IN THE INDUSTRY, RIGHT? HAVING THIS UP ASSIST HIM AND GIVING THESE NEW PLAYERS ACCESS TO IT ALLOWS THEM TO SCALE FASTER AND AT THE SAME TIME, WE ARE VERY SUPPORTIVE, BECAUSE WE UNDERSTAND THE JOURNEY OF TAKING AN IDEA FROM A NAPKIN AND BUILDING IT INTO SOMETHING. EMILY: AS YOU LOOK AHEAD, WHAT ARE YOU MOST WORRIED ABOUT? I SPOKE WITH THE LARGEST CORPORATE HOLDER OF BITCOIN IN THE WORLD, MORE BULLISH THAN JUST ABOUT ANYONE. HE SAYS HE THINKS THE WRITING IS ON THE WALL FOR CRYPTO EXCHANGES WHEN IT COMES TO REGULATION. WHAT DO YOU THINK ABOUT THAT AND WHAT KEEPS YOU UP AT NIGHT AS YOU THINK ABOUT THE YEAR AHEAD? KRIS: WE HAVE BUILT UP FOR YEARS, SO WE DON ' T HAVE CONCERNS ON THAT FRONT .WE SCALING VERY QUICKLY, AND PRESERVING OUR CULTURE, REMEMBERING WHAT MADE US SUCCESSFUL AS A BUSINESS AND KEEPING TRUE TO OUR CORE VALUES, I THINK THIS IS TOP OF MIND. EMILY: ALL RIGHT, THAT ' S GOOD TO HEAR, ESPECIALLY AS YOU PROJECT THE MARKET HITTING $1 BILLION BEFORE THE END OF THE YEAR.

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Crypto.com CEO Marszalek on Crypto Outlook

Kris Marszalek, CEO, Crypto.com speaks with Emily Chang, Anchor, Bloomberg Television at the Bloomberg Year Ahead virtual summit about the year ahead in crypto. (Source: Bloomberg)

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The only daily news program focused exclusively on technology, innovation and the future of business from San Francisco. Hosted by Emily Chang.
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