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00:00Increasingly in the crypto community you're being known as a white knight. Anthony Scaramucci even told us he thinks of you as a JP Morgan of the industry. Obviously there's a lot of turmoil going on right now. One of the things that we reported on is potential interest in Robin Hood Sam. And we know that you've said you've been looking at ways to partner with them and no active eminent discussions. However a deal for Robin Hood even be possible for you given the size of the deal and with that kind of large deal. What does that mean for a future for RTX in your strategic vision here. You know I can talk sort of in general about how we're viewing you know possible MBA opportunities without sort of commenting on on any one in particular. I which is that you know in terms of would we do a large acquisition if it did make sense and if all the parties were aligned on it. We could in theory. You know we we have you know a few billion on our balance sheet. Right now we are profitable. You know we are able to further capitalize if we need to. And so you know we're in a relatively strong place from a financial perspective. And you know we're in a place where I think we could make a significant acquisition. To the extent that that fit the business and to the extent that that there is alignment on it. You know we're always looking at possibilities there. And I you know I think that the way we'd be thinking about it is you know how would how would our businesses complement each other. How would it help bring value to our business. How would we bring value there. And who are the partners that we'd be really excited to work with. Those tend to be the factors that we're sort of most thinking about when we're looking at potential you know many opportunity. And why not build not buy in a scenario like this. Because obviously you already are starting to build your culture and Robin Hoods are very different. You've been keeping RTX really lean across the world for so many years. They had a hyper growth for for many years before this. Is this something you can just do on your own. No. And again we're talking about a specific cases. I think building is our default. Like if you if there does not end up being at you know if we don't buy we will build. And that's what we are gearing up to do is to build out everything that we need internally. And you know we're not in a place where we need to make any acquisitions. We are comfortable not doing that. But you know that doesn't mean that there are companies that we could potentially be excited to partner with. And so you know I think this is less the game about what do we need here is as you say we could just build on is that buying and this is more you identifying potential opportunities if there are any for us to I know I grow further and faster than I know than we would by default. Speaking of opportunities I mean how much of this is just a function of the decline in markets that we're seeing the opportunity to buy something at such cheap prices relative to what they've been before. And I'm wondering also you know given kind of the big decline in prices we've seen in the industry I mean is this part of a reflection of whether or not you believe any of these companies will get back to the former glory the 2020 one pricing the soaring records that we've ever seen. Really. Good question. And obviously you know the changing valuations do play Avery over in in our decision making there. You know I talked about you know being in a strong position. I tend to make deals if they make sense. But but obviously there's a limit to that. Right. And you know well while while we do have a few billion you on the balance sheet you know we. That doesn't mean we could do a 30 billion dollar deal. Right. And so you know there is a limit to the scale of that. And you know the prices that things are at play a real role in what our school could include there. So I think that's that's absolutely right. And your second question you know I think basically that there are some businesses that I think have a really great future in front of them. And you may or may not be hitting a speed bump here but but have a really really compelling medium to long term vision for the company that I think has huge upside. I think others were probably just always overhyped and you know never never made a ton of sense. And we're mostly from and you know a lot of what we're trying to do when we look. Potential partners is to Europe. Is it that we're really excited about and really respect here. Right. Who is it that we think is going to be a really big and important long term player. And he's you know being hit by by market right now you know vs. you know who. Who is it that that just like should never have had the valuations that they did last year. That's absolutely like a core part of what we're thinking through. So I have to ask you about BLOCK VI. There's a lot of reporting around your intention to acquire block fi. How big is the liability. What is the deal term. What's the total payment. And where does that 250 million dollar credit line that you've extended apply in a deal like that. So you know with your caveat that you know I don't I don't know that there's been any finalized things as of now. But you know more generally with it. I you know I think that like as you're sort of hinting at you know there are a lot of terms floating around there and it's easy. You start to get distracted by one of them and forget all the other pieces of you know our relationship with them. And and so I you know there's you know there's a line of credit there. There are other things you could be discussing with them. The other thing I say though is you know in terms of where they are from a capital perspective you know we were we thought hard about you know we wanted to work with and partner with here. And you know we I did not. It's not an accident. You know who we ended up working with. And you know that I think says a lot about their ability to effectively manage risks even through this very volatile period. I think that you know work day to be able to you know further capitalize them so that they can be operating from a position of strength right now. But but I can also say that they weathered you know the last month much better than many other similar businesses did. And you know came out of it with you know without sort of you know keeping balance equal in the way that that that you know other players did. So you know it's it's a position where you know works to be able to help them. But it also doesn't look anything like the sort of you know really dire conditions that you know we die. You know some players. And you know I think that we're you know say that you know we can help them get in a position where they are you know one of the strongest players right now in terms of being over capitalized. Well what about not just for them but for you. What's the strategic rationale for you to buy an asset like this at a time like this. What does it really do for you in the longer term. So you know I think that there are synergies between the businesses I know I know if you look at what what qualifies built out I think they have a loyal customer base. I think they have a real business small base. They have a hard program that people love is a strong strong leadership. And I think that we have been focusing on a lot of the back end infrastructure right on you know everything from the exchange in matching engine risk engine and everything else. And and do is notch up somewhat nicely. And so I think that there are a lot of ways that our products can work together and can mesh together in a way that's better than either would be independently. And I would also say that you know they've been working really productively with regulators on building out a regulated yield products and license yield products which which we're excited about and excited that they've been doing it in a regulated way. I think that's a healthy way to do it. And I think that's going to serve them well. No long term. And it's something that you know work sage work with as well. You know you told Politico that RTX was looking for opportunities to bail out you know places where customers would otherwise be underwater. But are you worried here about moral hazard at all that bailing out a company you may not actually be what's best for the industry at large. That's a good question. And you know and I'm guessing what you're getting out there is like does that bail out a company that really should have failed and teacher is the wrong lessons that company. And I think what I would say there's two things. First of all I am way more excited to bail out customers than shareholders. Right. And so the focus of this is not how do we deliver as much shareholder value to troubled assets as possible. Right. It's how do we protect customers. And I think those imply pretty different things. I said that that's that's one thing that I'll say. And I think that one of them is way more important for the system and the other is the one that has the biggest moral hazard. The other thing is that is that you know we are trying to find who were the responsible players who were building out a good business had a sustainable model and you would use short term liquidity and that that could help protect customer funds. The mentally built you know a a real valuable business that I think you know had something real to offer to customers rather than you know which companies honestly should never have existed probably. And and you know as of today you know maybe we should just let let them sort of you know die a quiet death. I think that's something that we have been thinking about. And and that does play a fairly significant role in which specific companies you know we end up deciding to work with. Lastly what about crypto miners. Where does that fall. Your acquisition strategy here and is a favorite game plan here. Vertical integration for you when you're thinking about RTX role across the industry. So I don't see any particular reasons that we would need to have you know an integration with a crypto miner. It's you know it's an interesting business. It's a business that doesn't need to be part of an exchange or. I I I think it's you know nothing wrong with that being a truly independent operation. And so I wouldn't say that it's like part of our four strategy now. Now obviously we'll take a look at anything. Right. And there might come along a really compelling opportunity for us to do that. And I definitely don't want to discount that possibility or imply that we would you know not talk to a profiler. We absolutely would. I think from a strategic perspective there's no particular obvious synergy necessarily from an acquisition standpoint obviously from an advisory standpoint or different. I guess the other thing that I would say is that I say is that like you know we when we think about the mining industry they do play a little bit of a role in the possible contagion spread to the extent that that are miners that were collateralized and borrowers with their mining which some of them were doing. And so to the extent that we have been thinking about that the mining industry recently that has been the main perspective has been you know think about it in terms of like I I you know are there underwater miners that could have some balance and hopped on for.

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Sam Bankman-Fried on M&A, BlockFi and Crypto Miners

Billionaire Sam Bankman-Fried, FTX US co-founder, discusses the company's M&A strategy and explains why FTX signed an agreement to inject capital into BlockFi. He speaks with Sonali Basak. (Source: Bloomberg)

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