London Crypto Week, organised by Token2049, who seem to be predominantly based in Hong Kong, arrived in London on 4-10 Oct, to showcase various crypto businesses or crypto ‘natives’.
Parties and pitching were the order of the day. Held at the DeVere Grand Connaught rooms in Covent Garden the event spawned other side events including an opening party at The Gherkin followed by a hot ticket event by Abra at swanky MNKY House in Dover Street. Abra have backers such as American Express Ventures and are a cryptocurrency wallet and exchange; Maple Finance who are Melbourne based, are a corporate debt market place for crypto companies. They held an evening of drinks at Soho restaurant Aqua Nueva as did BVNK who are offering a platform for businesses to engage with crypto with a business account for settlement, exchange and payment of crypto. Their party was at The Ned.
The question of institutional engagement is something that is debated across the industry through telegram channels and also the likes of Bloomberg. However, in my view, trad wealth management and crypto still seem worlds apart. Some brand banks are in the market with custody and analysis. Trust companies offshore are more involved on behalf of their family office clients but current regulation, which is increasing, has ring fenced most of these type of ‘institutions’ who are really corporates to such an extent that they cannot get involved unless they think about what will come back to bite them. One huge issue is a loss of funds and unknown taxation and how to manage that risk and avoid lengthy litigation from beneficiaries. Switzerland and Cayman do seem to have an edge on this topic.
However, as well as the risk, there is the opportunity. Trust funds can similarly find themselves sued for not understanding the upside. Banks can miss the opportunity for growth into a new ‘asset’. Investment Managers can miss seed funding into start ups. UHNW’s can miss opportunities. The issue is on pause for now as the pressure is not overwhelming and reporting to authorities not clear but the access to information via apps; seed investing and corporate channels like Bloomberg mean pressure will come to the private wealth management industry and family offices soon enough.
Token2049 presented the first major in-person crypto event alongside blockchain and fintech industry leaders in October. It is a mix of attendees coming to learn; use the event as a meeting hub for industry players; a platform for debate and a chance to hear key voices.
One of those was Mike Novogratz, CEO of Galaxy Digital, a former hedge funder and Goldman Sachs partner, based in New York, who has a vast investment management business across institutional and crypto. Also a graduate from Princeton he offered a fireside chat on the ‘macro case for Bitcoin’. Exploring topics such as DeFi, NFTs and a look ahead at the future of the crypto industry, other speakers included Aleksander Leonard Larsen, CO-founder, Axie Infinity; Bill Barhydt, CEO, Founder, Abra; Marcus Hughes, Head of Europe, Coinbase; Tim Grant, Head of Europe, Galaxy Digital; Evgeny Gaevoy, CEO, Founder, Wintermute; William Harborne, CEO, DeversiFi; Blair Halliday, Head of UK, Gemini and Sebastien Borget, CEO, The Sandbox.
For those unfamiliar with some of these names, Gemini, for example, are an exchange who are marching into Europe now and is owned by the Winklevoss twins who are American investors who fell out with Mark Zuckerberg many ‘moons’ ago. They are taking the same stance as Coinbase in bringing a regulated wallet to market. In addition they have an NFT platform Nifty Gateway which is a digital art online auction platform for NFT art founded by Duncan and Griffin Cock Foster. Since acquired by the Winklevoss twins. Nifty Gateway has sold NFTs by the now very famous Beeple or Mike Winkelmann who also sold at Christies with an art work for $69million thus propelling the NFT market into orbit. Business Development Director, Stephanie Ramezan, was at the event and her remit is to open up the Gemini brand in Europe. Axie Infinity and The Sandbox are gaming and coins and are hot, hot, hot. Axie Infinity is a NFT-based online video game developed by Vietnamese studio Sky Mavis, which uses Ethereum-based cryptocurrency AXS and SLP. As of May 2021, it is one of the most expensive NFT collections available.
The new projects in crypto financial services or DeFi are fascinating and most have jumped up to solve problems in the space. Sidney Powell, CEO and Co-Founder of Maple Finance, will white label through Circle payments who have been the recipient of seed funding from the likes of Goldman Sachs, to provide loans to crypto natives powered by blockchain technology. Sidney Powell has a background in debt capital markets and institutional banking where he participated in $3b+ of corporate bond issues, established and ran a $200m+ bond funding program, and managed Treasury at a commercial lending fintech company. Maple Finance launched its first managed lending pool in May 2021 and has since facilitated more than US$57m in corporate loans across two pools to top crypto companies including Alameda Research, Framework Labs, Wintermute and Amber Group. The company is on track to fulfill its goal of facilitating $2billion in loans by the end of 2021.
NFT’s are also reaching the mainstream and as with crypto have their good and bad publicity days. One of the areas of concern is fakes and theft. Anthony Georgiades, Co-Founder and COO of Pastel Network, has launched an NFT project hosted on its own purpose built native blockchain, bringing reliability, and security to the ecosystem. A primary focus of Pastel Network is to prevent scams in the space through their duplicate detection system that assesses the rarity of the digital asset across the entire internet and NFT ecosystem. This technology can be likened to giving each NFT its own fingerprint, which can then be compared to all other NFT fingerprints. Pastel has also developed a native storage solution for digital assets. Both of these protocols can also be implemented by other platforms as one-off features. In essence this helps to protect both creators and collectors.
Whatever your views on the crypto space, its innovation and pace of development, it is not only bringing new tech products to market, it is also helping solve the problems that occur in real time across the industry. As wealth managers grapple to get their head around it, I wouldn’t be surprised if we saw a Coinbase or Gemini get big enough to buy out some of the organisations who are still scratching their heads.
Whatever the outcome and governments are helping frame this story, Token2049 provided a good meet and greet for the crypto industry to grow expand its contacts; brands and knowledge base whilst taking advantage of London’s lifestyle scene.
2-8 May 2022, Singapore