The Shocking Truth About Institutional Crypto Investment in 2025 with Brandon Mulvihill

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
What's going to really move the needle. How do we
go from three and a half trillion a month to
thirty five trillion and beyond? And those are market structure moved.
I think the second there's chatter that this bill is
going to finally get passed, you're going to see m
and a skyrocket. I think you're going to see traditional
players on Wall Street, exchanges, banks, among others by their
way into the space very very quickly.

Speaker 2 (00:22):
The Eugenius Act was passed here in the United States
to have more dollar back stable coins. How do you
think that changes the FX markets, doesn't make it more efficient?

Speaker 1 (00:30):
Yes? Absolutely.

Speaker 2 (00:36):
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Speaker 1 (01:28):
So.

Speaker 2 (01:28):
If you'd like to learn more about Propy, visit the
link in the description. Hey, folks, welcome into the Thinking
Crypto podcast. I'm your host, Tony Edward and joining me
today is Brandon Mulverhill, who is the co founder and
CEO of digital asset trading technology Confirm Crossover Markets. Brandon,
great to have you.

Speaker 1 (01:46):
Oh my pleasure, Tony, thanks for having me.

Speaker 2 (01:49):
Yeah, Brandon, I'm excited to speak with you and learn
about what crossover markets is doing as you're building incredible
products for institutional investors. And of course your trad five
background is of interesting, so I'm curious about your journey
from tredfi into crypto. But let's kick it off about
let's say, where are you from? Where you know, where
do you hail from? And what's your professional background.

Speaker 1 (02:10):
Yeah, the basics. Huh, So, I guess I hail from
the financial metropolist that is Stockton, California, which for listeners
who are not familiar, is about an hour away from
the capitol are Sacramento in Northern California, you know, and
spent most of my life in Northern California growing up,
and went to UC Davis for University, which, again for

(02:33):
those not familiar, is a suburb Rellian of Sacramento for us,
you know, when you're at UC Davis in the Sacramento area,
the big city in San Francisco. And so after I
graduated with a degree in economics, eventually found my way
to San Francisco and really started in the financial sector

(02:53):
in the retail world of foreign exchange and CFT trading,
which we can touch on. But spent my first years
professionally in San Francisco working for a small originally a
small provider. Immediately moved to a company called FXCM.

Speaker 2 (03:09):
Yeah, so I was going to ask you about FXCM
and Jeffries, so tell us about what you did at
those firms.

Speaker 1 (03:15):
Sure, So really started ground up at at FXCM, which
is looking back with such an enjoyable experience. I ended
up being there for thirteen years, so certainly I had
a good time. But I started, you know, we were
a provider of retail effects trading for about one hundred
and fifty thousand or so two hundred thousand day traders

(03:37):
and and similar to what we see in crypto. Just
to maybe foreshadow of some of our conversation to come,
we started out as simply a retail provider, you know,
providing an online platform for instead of clients buying let's
say Apple or Google from Charles Schwab or interactive brokers,
if they wanted to day trade euro dollar, yan or

(04:00):
you named the currency pair, they could do that on
the FXCM platform. And so I started out in retail sales,
then became kind of a team lean manager, then became
a regional manager, managed the San Francisco office, and eventually
I would find my way to New York around two
thousand and eight, and then London and twenty ten, where

(04:20):
I started to build an institutional business based on the
economies of scale from the retail site and so completely
the analogous to how people might think of coinbase and
coinbase pro. We had FXCM, and I built what became
known as FXCM Pro, and so fxcmpro distributed liquidity to

(04:43):
around two hundred to three hundred other retail brokers globally.
We had a significant market data business, We had a
prime of prime business, We had an introduced broker business,
among other lines of businesses. The company was found this
is interesting was founded originally by six guys Bootstrap Capital

(05:05):
in nineteen ninety nine, and in twenty ten we floated
on the New York Stock Exchange with a market cap
of around one to one and a half billion dollars,
which in those days was big. The market has a
vault up from there, so I cut my teeth in
kind of the world of retail trading eventually started as
I built out the institutional sector, really started to get

(05:27):
deeper into market structure and the impact of micro market
structure and that impact what it has on how people
think about the future of trading in various markets. So
years later I was there again thirteen years roughly around
twenty seventeen, I went to Jeffreys, which is an investment bank,

(05:47):
and built out a prime brokerage business. So really went
to the root of trading, which is all trading markets.
The kind of the foundation, the lifeblood is credit and
so built a prime brokerage business from scratch and that
was very successful, and you know, we were clearing something
along three hundred to four hundred thousand trades a day

(06:09):
when I left. And really those two experiences, which you
know equates almost twenty years in the FX market, really
gave me kind of the backbone to think about life
as we created crossover.

Speaker 2 (06:24):
That's very fascinating. So is it kind of a natural
segue for you when you discovered bitcoin and crypto to
go into digital currencies and building crossover markets.

Speaker 1 (06:35):
Yeah, it was, and it also explains our bias and
that we definitely think of the cryptocurrency market at least
from a trading perspective analogous to the foreign exchange market.
You know, the expression I always like to state is
currencies cross borders or crypto crosses borders the way currencies
do and the way equities do not. And so crypto

(06:57):
is interesting and we can get into some of the details,
but a high level, from a market structure standpoint, crypto
has a lot more in common with FX than it
does equities, but it definitely has some things from the
equities markets that have been brought in, but if you
think of it from more of a regulatory perspective, it
really feels more like a currency in the sense that

(07:19):
doesn't matter where you live or what type of operator
you are. Bigcoin dollar is bigcoin dollar, and that's not
true right A European hedge fund trading Apple as a
stock is doing it under a slightly different wrapper, and
then say a US hedge fund, and so domicile really
plays a big role into how people interacting the equity space.

(07:40):
So that is certainly my bias and other things came
of that. But the two I would highlight here for
us is that we felt like when you looked at
the cryptocurrency market, there were two things that were missing
we thought we could solve. The first is that at
the time around twenty two two, we had a spreadsheet

(08:02):
of between three three hundred and fifty crypto exchanges, and
what they all had in common is the execution model
they ran is known as a central limit order book.
Regardless of what people think about that execution model, we
knew that that was fairly odd that one hundred percent
of the operating models would be that same Mexican So

(08:22):
we knew from FX that the ECN execution model would
be very disruptive, and we want to be the first
player to launch an ECN, which we did. And the
second thing is in all markets, but notably in the
FX market. As the industry matures, you normally start to
branch away institutionally from this what Crypto calls a vertically

(08:47):
integrated model, what I would just call as a brokerage model,
and you start to get to a place where you
have a best in breed model, where you have separation
of duties, where you have, you know, a custodian who
is a custodian. You have a market maker who's a
market maker. You have a broker who's you know, interacting
with customers directly, and then you have third party venues

(09:08):
who are competing for marketing to share. And when we
started in twenty two that that just wasn't here yet,
and so we wanted to be the first ever execution
only platform where we don't hold the client captive. So
a lot of kind of micro market structure things that
we saw in FX we wanted to bring into Crypto

(09:29):
that we thought would be disruptive, but absolutely to cut
to the chase, it was kind of our FX background
that got us excited and stepping into the space.

Speaker 2 (09:38):
You know, as you were mentioning, you know, the dynamics
of the FX market, I thought of with the tokenization
of fiat currencies and different currencies around the globe. You know,
we see the Genius Act was passed here in the
United States to have more dollar back stable coins. There's
digital Euros being worked on, digital u won and much more.
How do you think that changes the f markets, doesn't

(10:01):
make it more efficient better in certain ways? Does it
take away any ability to have a business around the
FX markets as well?

Speaker 1 (10:10):
Yeah, I think potentially. But I think we're I still
think we're getting kind of as a crypto community. I
think sometimes we're getting a little over our skis in
what could be rather than kind of zeroing in on
where we at and what are the major gating items
to get to where we need to go right and
so so as to not maybe dodge your question, I

(10:33):
think the short answer is yes, absolutely. You know, one
thing that happens in the currency market is most currencies
settle T plus two. There are a few that settle
teplus one. And the market in currencies, which doesn't really
get discussed enough, is the spot effects market operates twenty
four to five. I hear a lot of these young
kind of entrepreneurs in the crypto exchange world kind of

(10:55):
thinking they're the first ones to have overnight trading. That's
just not true. Does trade twenty four to seven, so
it's trading over the weekend, but from Sunday night to
Friday end of day. The spot effects market has always
operated and been open twenty four hours. But what doesn't
happen is that the settlement times are not, I would argue,
as efficient as what crypto has created, and so simply

(11:19):
the efficiency that tokenization kind of addresses, and I think
namely in the ability to settle in It doesn't have
to be real time, but closer to real time removes
a lot of friction, and I think absolutely addresses your question,
which is it makes you think that there could be

(11:39):
a lot smarter, a lot cheaper, a lot a way
to maybe transacts things less riskier environment through tokenization. That
what we've seen historically in the FX market when it
comes to settlement. But the one thing I would caveyat,
and what I started with, is the market like equities

(12:01):
like futures and every other asset class is simply more
mature in market structure. Right. Again, there's a real separation
of duties. So for example, if you're a major tier
one asset manager or a hedge fund, it's common for
you to maybe have a custodial relationship with JP Morgan
or State Street or Bony or whoever be and live,

(12:24):
and then you might have a prime broker relationship with
a different name, and you might trade across twenty venues
and then that all net settles very nicely. You might
even have a baroker relationship with one or two institutions.
But you have this real freedom of choice. And this
freedom of choice what it does is it promotes competition,
and the end it collapses fees, right, and so it

(12:48):
collapses the cost to capital, and it collapses the cost
to execute. And so the totality of feet compression is real.
And this is massive for a reason, Tony, which is
if you look at volumes in these markets, they massively
outweigh what we see in cryptocurrency trading.

Speaker 2 (13:08):
Oh for sure.

Speaker 1 (13:09):
And the stat I always like to say is in
centralized exchange volume, the market trades between a five hundred
billion and three and a half trillion per month but
the key is the three and a half trillion. What
we're not seeing in cryptocurrency is the market is not
breaking out of that. And it's not because there isn't demand,

(13:31):
or it's not because the institutions aren't here yet. The
number one reason is the business models don't allow for it, right,
And so this captive model is effectively not bringing forth competition,
which means fees are artificially kept high. And so if

(13:52):
you go to a spreadsheet and you say, hey, I'm
going to pay five to ten basis points, right, then
you know you just can only do so much volume
without giving away all of your wallet. Right, And I'll
just finish this comment with one last thing to kind
of bring it forth. Mathematically, if you think about life

(14:14):
from the view of a market maker in the FX market,
the cost the total cost, so the cost to settle,
the clearing cost, the cost to settle, and the cost
of execution together, you're probably paying between two to five
dollars a million. It's five is pretty expensive for a

(14:34):
tier one market maker. In cryptocurrency, you're paying hundreds of
dollars a million, and there are some exchanges where you're
paying about one thousand plus. So you know, mathematically, we're
just talking about orders of magnitudes difference, which has a
direct I pack on total volumes.

Speaker 2 (14:51):
Interesting, So on a note, tell us a bit about
the type of institutions that are using your products and
services and how areday using them.

Speaker 1 (15:00):
Yeah, so we're starting to be used and people, you know,
I think think of us as like the future of
the primary market, right, and so one market making firms
who are using us not only to price clients, but
to hedge their risk. It probably makes sense before I go, yeah,
to kind of explain the differences between the ecn ands
in a central limited order book, which is the easiest

(15:22):
execution model to build. That's why we have Every crypto
exchange is doing this. It's simply the easiest way to
build this type of model. There's no such thing as
maker or taker buyer now, there's just customers, right, And
so the problem for a maker is they never know
if the next trade is a retail trade or if
it's an HFT, and those have the two very different values,

(15:45):
and so the maker normally is pricing defensive, and so
spreads tend to be wider, liquidity tends to be a
lot thinner in the ECN model, what happens is every
taker of liquidity has its own market data, session and
own liquidity. So user ten on our cross sex system
has an environment where if user fifteen starts trading in

(16:07):
a certain way, their user fifteens trading has no adverse
impact on User ten's liquidity experience. And so what happens
is a few things. One is, if you know, the
first client type I should have said is reap our
retail brokers globally who are offering spot cryptocurrency contracts. What
they want life is they want the best price and

(16:28):
a high fill ratio. And our system, because of the
specially you know, the customization we're confident delivers, if not
the best among the best pricing for retail brokers globally,
we have very in fact we go inverted quite often,
so very very tight pricing for retail flows. Secondly, if
you look at like a hedge fund or a market maker,

(16:50):
someone who's got risk in the market and looks to
exit risk, what they're looking for is obviously they still
want a type price, but they want no market impact.
So they want to be able to get rid of
their risk without the whole market knowing, right, and the
problem in that crypto exchange. The second you start selling, right,
everyone knows right. And what our system does is, again,

(17:14):
let's say this edge fund is user twenty. They have
their market data. What they can basically, if the market's
ten by twelve, they ten by twelve. They can buy
at twelve, or they can say I want to buy
at nine, and we will flash that trade to the
other takers. All of our trade executions are anonymous, and

(17:34):
so what happens is they're able to get out of
their position with zero market impact, right, so the market
doesn't know someone's unwinding a position. We're just creating efficiencies
between time horizons of different buyers and sellers in the
market in a really sophisticated way. And then our third
client type are really anyone any electronic trading strategies, quantitative

(17:58):
hedge funds who are running these models. You know, our
platform is not only delivering kind of this best in
breed model, but we're doing so while executing and matching
trades in a around six to seven microseconds. So it's
not just that we're the fastest crypto venue in the world.
We're the faster is by an order of magnitude or

(18:20):
some cases two or three orders of magnitude, So we're
able to deliver a lot of efficiency when it comes
to price discovery, spread compression and eradicating market impact.

Speaker 2 (18:32):
To achieve the speed that you are able to offer,
are using blockchain technology in anyway on the platform?

Speaker 1 (18:40):
No, just opposite, because blockchain technology is really really slow,
so the in fact, it's a gaining issue in the industry.
The number one way we achieve speed is through one
of my our co founders in our CTO of Flad
Rising and his dev team have worked together on and
off for the past thirty years. They built He built

(19:00):
previously an FX venue called fast Match, which is still
the fastest FX venue in the world, and that was
sold to Euronext for one hundred and eighty million dollars.
He previously was the deputy CTO at Credit Swiss, where
he built a framework called AES and a among many
products at Dartpool called Crossbinder, which was top five in

(19:21):
US shares and it's today. So our team is very experienced,
a nuanced at building trading venues that are based on
performance and speed. For sure, I would argue that it's
the best technology team in the world when it comes
to trading technology. What we do get is if you
look at some of the DeFi protocols, you know, the

(19:43):
two diseases they suffer from is the speed of execution
is horrendously slow and the cost is high. Because every
if you're putting a trade on the blockchain every single time.
You know, if you buy once a day, that's fine,
if you're buying. We have clients doing ten thousand trades
a day, right, So we have gotten a lot of
inbound from DeFi protocols that want to leverage maybe white

(20:05):
label our technology to execute the trades off the chain
and then post trade within milliseconds, then put the trade
trade back on chain for transparencies, say, to try to
address those those challenges. But to give you an idea,
you know, one of the leading market data providers in
the world runs off UH you know, a particular blockchain,

(20:27):
and you know, we know and looking at that that
the latency is around three hundred milliseconds, not microseconds, milliseconds.
So we use we charge our clients commissions and we
will use UH market data based on the blockchain to
UH kind of have an independent validator for the price

(20:48):
when we charge a client so there's a fair price
and we're not kind of grading our homework. But when
we think interer day of like using the blockchain for
risk protections on the system, it's way too slow. It's
just not the market's not there.

Speaker 2 (21:02):
Do you think over time with future iterations around blockchain
tech and maybe you get to atomic swamps and things
like that, maybe you might look to leverage a technology,
but maybe not right now due to the lag.

Speaker 1 (21:16):
Yeah, I mean there, Yes, you know, there's no question
that the blockchain is going to have to advance itself
in order to meet client demand. But there's also a
bigger issue of credit, and people I think need to
spend more time thinking about the credit environment because if
you think of it from this perspective, if you want to,

(21:38):
you know, the market when I found it when we
founded the company three years ago, was really we thought
over its skis with this fascination of real time settlement.
Real time settlement presents real market inefficiencies that people are
not thinking of. For example, if you look at a
market making firm today across trad fire or crypto, these

(22:01):
firms aren't extraordinarily smart and intelligent and sophisticated. Okay, the
algorithms they're using are cutting edge, right. The dev teams
they have are among the smartest people in the world.
If you watch what they do, you know, if you
give them, let's say, a full day, they will trade

(22:23):
lots of volume, but their net flat. In other words,
they don't have a position, okay. And what happens is
the shorter you collapse that window and you compress their
settlement time. They might have a position intra hour. And
if you say we're going to settle now every hour, now,

(22:44):
what has to happen is they have to skewed on
to get back their credit. So you're creating a synthetic
problem that doesn't need to exist in terms of liquidity
and market efficiency. Right. And if you go to them
and say you need to settle every trade, I mean
think about it. If you're a market maker pricing finance,
falcon X, coin Base, go right down the list right,

(23:06):
one hundred exchanges. There's no fungibility. You can't buy bitcoin
on coinbase and sell it on crackt. It's not how
it works. So what you're asking the market maker to
do is to post collateral at one hundred places. And
if they're long here and short here, they get no
an efficiency for that. And if you say you've got
to settle every transaction, I mean, this is wildly expensive.

(23:30):
So before we even think about the blockchain trying to
speed up, you know, we need to be a little
bit more clear minded on how credit works and how
the market needs to involve from a market structure standpoint.

Speaker 2 (23:45):
That makes sense. Now, you mentioned you guys launched these
services starting in twenty twenty two, which was I mean, Brandon,
it was really rough at that point. Right, We're in
a bear market, attacked from the government. But since then
things have done, it turned a new leave. Right, We're
in a friendlier environment. Legislation is getting passed. So how
has your business I'm curious about the demand from institutions.

(24:09):
Has it ramped up this year?

Speaker 1 (24:11):
Yeah, no question. I mean, yeah, we start, we founded
the company, and we started a fundraise and a month
later Celsius and three Arrows collapsed, right, and then five
months or six months later FTX graced all of us
with their wonderful blasting. So yeah, we only ever knew
we raised money and built a business in you know,

(24:31):
the start and the heart of the crypto winner. I
think for us, you know, our differentiation was strong enough
that we were able to put lots of clients on
the platform and build you know, real volumes. What we've
seen kind of since the election, and what we've seen
since as the market has really like coming from springing

(24:52):
the summer, is an increase in onboarding, the speed of onboarding,
so the caliber of client being onboarding, in the speed
to which the right especially as you and I are talking,
you know, quickcoin has been creating all time highs and
there's real fomo and people at large institutions who want
to get in the market realize they may have missed
the boat, and so they're trying to come in quickly.

(25:14):
And that's probably the biggest thing that we've seen in
terms of going from winter to summer.

Speaker 2 (25:20):
And it's fascinating to see all a lot of the
tradi fi companies are black Rocks, Fidelities and much more
getting involved launching et apps, crypto trading, custody and tokenizing.
What are your thoughts on kind of the institutional I
heard to your point like full mowing in.

Speaker 1 (25:35):
Yeah, I think it's helpful. I think again, I'm a
market structure guy and I'm you know, I'm trying to champion.
I'm trying to get people to understand what's going to
move really move the needle in the market. What's going
to you know, how do we go from three and
a half trillion a month to thirty five trillion and beyond?
And those are market structure moves. So when I think
about the ETF, that was super important, but it's not

(25:56):
a change in market structure. Sure, if you look at
what was happening in crypto, historically, people have been solving
for how do you know institutions have been solving for
how can I participate in the market without being in
the market? Right, So what is an ETF. It's a
cash shuttle product. Right, You're not touching the coin. And

(26:18):
when you look at crypto, it has created this market
has created so many cash settled ideas it's wild when
you think about it. So the market has something called
a perpetual future or a PURP, which is cash shuttle. Internationally,
we have a CFD contract which has always existed in
multiple which is cash shuttle. We have a futures Okay,

(26:38):
we have an ETF. The FX guys that some of
the banks have created an NDF, which is the FX
version of cash shuttled. The equities guys on a different
floor talk about an ad R, which is cash shuttled,
which is all trying to solve for the same thing.
It's not to say that it's unimportant. It's a it's
a gateway to getting institutions into the space. But what's

(26:59):
more important for this industry are getting trad fight custodians
into the space in a meaningful way. Because the biggest
gating issue for a large scale institution coming in is
not necessarily regulation, is they want to custody their coin
at a name that's familiar to them, where they custody
dollars or other assets, right, and so Bank of New

(27:22):
York State Street, City Bank or three of the banks
I've seen that have come out, you know, putting their
hand in the air that they're going to address and
kind of scratch that itch. That is monumental because now
what people have been doing is there. If they want
to get into the space, their custodian is also the broker,
the exchange, the marketment, right, and so it's not really

(27:45):
helping from a market structure standpoint. So I think the
big thing for us is getting trad fight banks into
the space.

Speaker 2 (27:53):
Yeah, and we've seen JP Morgan partner with Coinbase. There's
been quite a few announcements. City Bank mentioned they want
launch a stable coin and customer as well. You know,
with these banks fully situated in the market and their experience,
the amount of capital they are able to bring into
the market, how do you think that changes the dynamic?
Could we see less reliance on the likes of finance

(28:15):
and coinbase but the masses, right, we haven't I don't
think hit a billion people on chain yet. But let's
say the masses wanting to enter this asset class, they
go to their local banks and things like that.

Speaker 1 (28:25):
Well, yeah, so I'm thinking about I mean, we're an
institutional provider, so we look at things more through I
think from a retail perspective. The market's done a great job,
and you know, there's always more to do, but I
don't think a ton and you know, I mean at
the retail level. I think what's happening now is you're
seeing a convergence between tradfi and crypto and this is

(28:46):
a big you know war, that's a brilliant right, So
you have trad fight brokers. You can take a robinhood
for example. Historically providing cash equities gets into crypto, you know,
it is launching other asset classes as well to be
kind of that one stop shop for some a consumer
like you or me to open an app and do
all of our trading through their platform. And similarly you

(29:09):
saw Kraken by Ninja Trader for one and a half billion,
as there means a crypto provider who's doing the opposite
saying how do we get kind of the tradified stuff
on our on our platform. So I think that's kind
of the world. In the retail level, I think, you know,
and people going to a bank I think is less
of the issue of the issue. I think that from

(29:31):
the institutional market to mature, the first thing that needs
to happen is people need to be able to custody
at a bank custodian that they feel comfortable at, and
that also gives them the operating model where they can
then have a prime broker relationship somewhere else and they
can trade across venues and they can have efficiency, and
they can trade and scale and do the things that

(29:53):
they're used to doing right and that you know. So
on the banking sector, we're thinking about, you know, the
banks I'm engined on the PB side. Hidden Road was
acquired by Ripple for one point two five billion. That's
a massive, massive deal to the industry. It creates fungibility.
We've also done a deal that's hitting Road for full disclosure.

(30:14):
Is our primary prime broker in the clear near one
hundred percent of our trains today, so we have a
big relationship. We've also launched a deal with bitco to
who's complementing their custodial service with prime brokerage. And there
I think some traditional banks that are looking in to
get into space, and I think that's a big deal
because what it allows an institution is again, if you're

(30:37):
an institution, and I said before, and you buy bitcoin
with exchange A, you have to sell it there your
captain in our operating model. When you buy bitcoin dollar
with cross x in ten minutes later you want to
sell it, you do not have to sell it on
our flatform. I have to win your business. I have
to be the best price, my best execution and my

(30:57):
speed and my performance has to do what I'm telling you. You
don't have to ever trade on me again, right, so
I have to burn it. I don't and so and
that's what the trad FI institutions want to come in
and participate in a big way.

Speaker 2 (31:11):
You know, it's interesting because I'm curious what happens after
the Market Structure Bill gets passed. I'd love to get
your thoughts what that means for these institutions getting in,
what it means for your business. Does it open up
more opportunities? Are there anything things that you're holding back
on until that clarity is in the in the market.

Speaker 1 (31:32):
I mean yes. I think the big thing though, is
the thing with the Market Structure Bill is it changes
the game overnight because it gives a regulatory path for
existing institutions to come in and understand exactly what they're
getting involved in, in which regulator they're getting involved with.
I think what we'll see with Market Structure Bill is

(31:54):
before it's even passed. You know, with most of these bills,
we saw it with the stable coin. With most of
these bills, you start to realize there's chatter and we
understand the bill is getting passed. Before it gets passed,
maybe days to a week or two weeks. I think
the second there's chatter that this bill is going to
finally get passed, you're going to see m and a skyrocket.

(32:17):
I think you're going to see traditional players on Wall
Street exchanges as one example, Banks as another example, among
others by their way into the space very very quickly,
and so I think that's the first thing people are
going to see. I think related to that, you're going
to see a lot of more partnerships and a lot

(32:37):
of big announcements related to that, because it's just so
at that point, the path is very clear. It's very
easy for folks at serious institutions to get approvals with
their committees now that they have a very clear and
concise regulatory framework to play with, and the market Structure
bill that was passed by the House is very clear,

(33:00):
and they've done a great job, and we're going to
see what the Senate does, and I think there's a
lot of optimism there. So I think that's great for
us as a business at Crossover. It's probably the biggest
thing is it gives us the comfort to operate nationally
without having to worry about state by state considerations, right,
so it really brings us into kind of the modern

(33:22):
age of you know, how you would operate in any
other asset class where we can operate across the United
states that has implications to the growth of our business,
to the value of our business, and so yeah, I
don't think we can understate how important that FELL is.

Speaker 2 (33:37):
Absolutely Now, with the tokenization race that's happening, a lot
of firms are looking to put stocks on chain money
market funds and much more. How are you looking at
that market? Are you looking to support that in any
way as it grows? Maybe it's a bit early, but
let's say stocks are fully trading on the blockchain in
tokenized formats, and you know, are you looking to integrate
that at some point?

Speaker 1 (33:59):
Yeah, for sure, Yeah, we are looking at in fact,
we're looking at one blockchain in particular that we will
be partnering with at some point next year. You know.
I will state though, for us, our mission is to
become primary market in the spot space, and we really
feel like the winner of that space is going to
have a ten to twenty billion dollar market cap. So

(34:19):
we see it as a big opportunity. And from there,
branching into a supporting tokenization across chains we think is
very easy. We definitely, I think are empathetic. We understand
where some of these institutions are coming from. It's again
similar to the ETF it's just easier for them internally
to get really exciting and get involved with the tokenization

(34:43):
of a real world asset that already exists. Right, there's
not a lot of approvals, you know, there's not a
tremendous amount of risk that that presents. Doing that does
not mean you get to participate in a meaningful way
in the spot market from a trading perspective or an
execution perspective. So we really think we've thought about things
in the right order of if we start to meet

(35:05):
our objectives as a company, I think the sky is
the limit for what it opens up versus I think
focusing on some of these areas, on the fringes that
people are focused on that that are certainly exciting, But
at the end of the day, I think, you know,
as many tokenization projects as people get involved in the

(35:26):
deeper you get into crypto, especially for an institution, not retail,
but for an institution, you're going to wake up one
day and say, well, what am I doing in the
spot space? Right? And that's a tricky answer, right, unless
you've really put a lot of time, effort of money
into that, you know beforehand. So that's how we think.

Speaker 2 (35:44):
About it, Brandon, can are you able to give any
hints on that blockchain you mentioned you're looking at.

Speaker 1 (35:50):
You know, yeah, I think we can. You know, I
think we're excited about what the Canton network is doing.

Speaker 2 (35:56):
I just had you've all ruse on talking about that.

Speaker 1 (35:59):
Yeah, so you know, obviously you've spent time with you
all and Eric and really smart, smart smart operators. What
we love about them is similar to OZ. These are
folks that have decades experience in the trad five space
that have come into crypto and now can kind of
play Rosetta stone and speak both languages, and that's kind

(36:19):
of the background that we have. And so you know,
they're kind of principally focused on tokenization of real world
assets bringing those things on chain, really smart, and we're
having to think with them about how we can bring
some of our executions and net settlements and stuff on
chain as well, which is far more you know, crypto specific,
because we're thinking about spot transactions coming on chain and

(36:42):
we think that provides a lot of value. So I
think that'll be our starting point. It won't be the
only thing that we do, but you know, we I
should have told you Tony for all of our growth.
We have over you know, almost one hundred institutions now
on the platform and trading. We've only been by for
two years. I think we some of the biggest names
in the industry. You know, We've done tens of thousands,

(37:05):
if not over one hundred thousand trades and over a
billion of volume in just the first six days of October.
So the platform is really taking off. But we're only
thirteen people, wow, and not a big company, right, and
so for a lot of reasons I discussed, we're not
the broker, we're not touching client money, right, and so

(37:27):
we're very focused execution on the platform. So excited about
Canton and would love to be excited about a lot
of other projects, but we do have to stay relatively focused.

Speaker 2 (37:39):
There was something I wanted to ask you about some
recent milestones for Crossover, and that was, for example, the
launch of cross x two point zero and if you
can also talk about what's on your road now.

Speaker 1 (37:49):
Yeah, So two point zero for us was a major
deal because it was the launch of a new architectural framework.
Some of the easy things it delivers for us is
the you know, new advance storter types, a series of
pegged amid, which is one of the larger the more
advanced trading shops want post only Iceberg orders, things of

(38:10):
that nature, the ability to post dark, there's a there's
a number of things, uh that we can do their
customize order types, so that there's kind of a whole
theme around being able to deliver the spoke order types
in intra week, not something that we have to you know,
wait for the second thing that uh, you know, looking

(38:30):
at other asset classes, I think people have more of
are appreciation for our business model is uh. And one
of our differentiators is basically on the on the idea
that we're not doing big releases two or three times
a year. And what this framework allows us to do
is we're releasing all week every week, and so we're
coming out with new features, new benefits. If there's a bug,

(38:52):
we're doing bug fixes, but we're doing it intra week
all the time. Normally we come out with two releases
per week. UH and without going down right, which is
another big thing that most TRAP crypto platforms are used
to it. Trap five platforms are not built that way,
and so this framework allows us to just come out
with kind of a speed of releases that I think

(39:14):
they're going to be very hard for people to keep
up with. So those are two of the kind of
major things. But the third thing that I'm really excited about,
and we'll probably get a little more vocal about it
with PR and things like this towards the end of
the year going in to Q one, is our best
bit offered smart order routing really what we think is

(39:37):
the most sophisticated, best execution business model in the world
in crypto, you know, cutting to the chase. What it
is is when we execute a trade, we rank every
liquidity provider in real time based on behavioral characteristics, so
not just price size and time. We're also currently looking
at things like fill ratio and response times, and in

(39:58):
Q four here we'll be looking at market impact. And
so if you're a provider that's top of the book,
but you want to play games and hold the trade
or you don't want to respond quickly, there's a cost
to your actual price that's more expensive than what you're showing,
and the system automatically will calculate that. If you're a
really good actor and you're a really smart market maker,

(40:19):
and you provide quality liquidity into the platform, you're going
to find yourself highly ranked, and if you're not, the
system to just automatically already does this automatically kind of
puts you lower in the stat and so this has
profound impact on the user experience. I think it delivers
the world's most advanced model of best execution and it's

(40:40):
bought crypto trading, and so this is something we're going
to try to kind of bring to market in a
more of a visual way. But we needed this framework
in order to be able to do some of the
complex natures of the smarter rebouting.

Speaker 2 (40:54):
That's awesome, Brendon. I know we're running up on time here,
but I definitely want to have you back on I
think we should have a conversation post the crypto market
structure bill passing, because I think there's going to be
like you highlighted some interesting developments from the tradi fi
world and crypto But thank you so much for joining me,
and I got some wrap up questions here for you. First,

(41:15):
if you could create your own metaverse, what would the
theme be?

Speaker 1 (41:19):
Well, what are some of the answers you've gotten in
the past. This is a this is a people.

Speaker 2 (41:23):
Do like fun stuff like space or the wild West
or things like that, or a tropical island to themselves.

Speaker 1 (41:30):
I might be too overly like philosophical on these questions.
I don't really have a fun answer. I you know,
we deal a lot with AI or or CTO is
a PhD and mathematics and our official intelligence. And I
think one of the things I, you know, I don't
know how the I would answer it for a metaverse,
but like one of the things you hear about with

(41:50):
AI is this alignment problem. Is the AI going to
be disaligned such that, you know, really it ends humans vibilization? Right,
This is like doomsday kind of But I think what's
interesting and maybe optimistic for human kind is that we
have alignment alignment problems everywhere. We have alignment problems to

(42:11):
you know, politically, politically, you know, intro you know, inside
of the country. We have employers at jobs have alignment.
I mean, there's and we just don't talk about it
enough and we're not always out in the open about that.
And you know, something a crossover when we thought about
the company and you know, having employees participate in equity,

(42:32):
what we were trying to do is align all of
our interests together. We think that has a profound impact.
So in fact, create a metaverse couple with AI it
it would be around some type of environment to provide
like almost like a safe ecosystem for people to address
these issues with. Maybe, you know, not as much in

(42:54):
security that that occurs when you try to address these kinds.
You know, it's hard to go to your boss and say, hey,
there's an alignment problem and I need you know, and
that's a little awkward. So maybe in a digital space
there are opportunities to kind of try and test things
to better align ourselves and ask tough questions. That's maybe

(43:16):
too dreamy, but that's how I think of it.

Speaker 2 (43:18):
I think it's possible. The tech is here, and you know,
maybe it helps solve our problems. Rapid fire questions, favorite food, sick,
favorite musician or band.

Speaker 1 (43:28):
Probably still Blues Travelers, favorite movie, Oh Brave Heart, Yeah,
favorite book, History of the World.

Speaker 2 (43:35):
When you're not working at cross Mark crossover markets, what
are you doing for fun?

Speaker 1 (43:39):
I'm a sports guy and family guy, and so probably
it's shooting baskets or throwing the football with my son.
I grew up playing basketball, So for me, getting out
and for anyone who's done a conference call with me
in the afternoon, especially in the summer. It's not uncommon
that you can hear me shooting the ball a little bit.

Speaker 2 (44:00):
I'm a huge fan basketball fan, I still play to
this day. And I gotta ask, are you a New
York Knicks fan?

Speaker 1 (44:05):
No, I'm not, so going back to where we started,
I'm a Sacramento Kings fan. So I feel your pain,
but I've got it way worse, right, So we are
just historically bad.

Speaker 2 (44:16):
Well, things have gotten a little bit better for the
Knicks over the past couple of years, but yes, it's
been a what twenty year drought, you know, lots of
pain here.

Speaker 1 (44:24):
I'm rooting for you. I was at the Final four
championship game with Villanova the North Carolina on the on
the buzzer beater, right, and so I know Rompson was,
you know, was suited up at that game. So I
definitely root for the Knicks each year now that I
live close to New York, because I'm fortunate the Kings
are often in the playoffs.

Speaker 2 (44:47):
Brandon, great stuff. Appreciate you taking the time, and like
I said, we're kind of have to do one in
person at some point, but thank you so much for
joining me.

Speaker 1 (44:54):
Yeah, I look forward to it, my pleasure. Thank you
for having me

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