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$AVAX Treasury Strategy🔺$AVAT CEO INTERVIEW🔥 · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Today, let's dive into avalanche and the treasury companies that
• 0:03
  Speaker 1: are starting to pop up. You don't want to miss it,
• 0:05
  Speaker 1: and let's get started. I do want to think our
• 0:06
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• 0:33
  Speaker 1: our link. Let's get into it today. I wanted to
• 0:35
  Speaker 1: bring in our guest, who is the CEO of the
• 0:38
  Speaker 1: Avalanche Treasury Company, Bart Smith?
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  Speaker 2: How are you?
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  Speaker 3: I'm wonderful, Thank you, thanks for having me.
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  Speaker 1: So, Bart, let's just jump into kind of the topic
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  Speaker 1: here of avalanche treasuries in general. We're starting to see
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  Speaker 1: a lot more of these starting to play into the
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  Speaker 1: market as a whole. What are you guys trying to
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  Speaker 1: do how have you guys set this up to start
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  Speaker 1: to seize on this opportunity.
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  Speaker 4: I was offered the opportunity to work with a couple
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  Speaker 4: of different treasuries before choosing this one. I felt that
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  Speaker 4: it was very important to structure these correctly. I think
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  Speaker 4: that that these are are great vehicles. They're permanent capital vehicles.
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  Speaker 4: I think the ability to not have to respond to
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  Speaker 4: daily withdrawal or creation requests allows you to kind of
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  Speaker 4: build a more strategic exposure for clients. And so, you know,
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  Speaker 4: that was that was really the idea of structuring this,
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  Speaker 4: you know, going this back route. You know, we did
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  Speaker 4: not choose to find an existing company to kind of
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  Speaker 4: do a pipe into and that that there's this existing
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  Speaker 4: business that kind of, you know, many cases as a
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  Speaker 4: failed business that that is, you know, uncorrelated or unrelated
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  Speaker 4: to the ecosystem that you're trying to support. So for
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  Speaker 4: all of those reasons, we decided to go the back
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  Speaker 4: route and a more strategic route so that this vehicle
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  Speaker 4: would be you know, a pure play on the avalanche ecosystem.
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  Speaker 1: Do you think that matters in general when an investor
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  Speaker 1: looks at this as an opportunity of how these companies
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  Speaker 1: are organized.
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  Speaker 4: I think it's going to matter a lot and how
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  Speaker 4: these companies are regulated. I think there's a lot of
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  Speaker 4: SEC scrutiny going on right now surrounding you know, these
• 2:19
  Speaker 4: these were existing businesses that had shareholders, they had reporting obligations.
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  Speaker 4: In many cases, these business continue to go on even though,
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  Speaker 4: like I said, they have nothing to really do with
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  Speaker 4: the core business that would be investing in these underlying
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  Speaker 4: crypto ecosystems.
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  Speaker 3: So I think it will matter.
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  Speaker 4: I think as you're seeing over the course of the
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  Speaker 4: next couple of months, the SEC is reacting to a.
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  Speaker 3: Bunch of these and I think, yeah, going to cleaner
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  Speaker 3: route for us was just a better path.
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  Speaker 1: Okay, what was your background and were you in crypto?
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  Speaker 1: Did you kind of come into this space from the
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  Speaker 1: finance side?
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  Speaker 2: Where did you come from?
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  Speaker 3: So I was.
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  Speaker 4: I was in retail wealth management and asset management for
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  Speaker 4: a number of years.
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  Speaker 3: I started an ETF.
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  Speaker 4: Firm back at during the Financial crisis that was then
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  Speaker 4: Emerging Market's ETF firm that was acquired by Columbia Funds.
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  Speaker 4: I went from there to Susquehanna International Group, where I
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  Speaker 4: ran the ETF business the ETF Group for about a decade.
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  Speaker 4: I was also responsible for our credit trading business during
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  Speaker 4: that time, and then anything after twenty fourteen, I was
• 3:30
  Speaker 4: responsible for anything really digital asset related globally. In twenty
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  Speaker 4: twenty two, we made the decision to start Subsqwaenna Crypto,
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  Speaker 4: which was outside of the Susquander group of companies. Obviously,
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  Speaker 4: the regulatory landscape in the United States was very difficult
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  Speaker 4: for those types of businesses, so we built that outside
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  Speaker 4: in the Bahamas, London, and Hong Kong, and I did
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  Speaker 4: that for the last three years.
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  Speaker 1: Very nice, well good, you're og in terms of the
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  Speaker 1: digital assets side of things, for sure. I'm looking at
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  Speaker 1: the press release six and seventy five million plus business combination.
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  Speaker 1: This is coming in with Mountain Lake Acquisition Corp. This
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  Speaker 1: is a goal now to build up to a billion
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  Speaker 1: in terms of the ecosystem treasury. How are you guys
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  Speaker 1: going to go about this? And obviously you're getting in
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  Speaker 1: a little bit of a discount right there at like
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  Speaker 1: twenty three percent in terms of the Avalanche ecosystem.
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  Speaker 2: How long will that last in terms of the ascount?
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  Speaker 3: Well, so that was that was that was just related
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  Speaker 3: to that one transaction.
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  Speaker 4: So we you know, we we do have a very
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  Speaker 4: high amount of alignment with the Foundation, uh and Goon
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  Speaker 4: Sire who's the inventor and creator of avalanches on our
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  Speaker 4: advisory board, as in Secid Pureshi at Dragonfly who had
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  Speaker 4: the you know, co led the initial round into into
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  Speaker 4: the Avalanche protocol, John Najas who's the chiefest offare officer
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  Speaker 4: of Lapse our pub board, as is rout Haddock from Dragonfly.
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  Speaker 4: So we were able to get a discounted purchase from
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  Speaker 4: the Foundation that was pretty sizable two hundred million dollars,
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  Speaker 4: which led to that to that discount, we also have
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  Speaker 4: an agreement with the Foundation for excl exclusivity for any
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  Speaker 4: discounted sales to any digitalis treacheries of of course to
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  Speaker 4: the next year and a half. Actually gonna have a
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  Speaker 4: row for any discount sales of any number to any
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  Speaker 4: to any account.
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  Speaker 3: Party at seventy five million dollars or greater.
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  Speaker 4: So we have this alignment, you know, we have the
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  Speaker 4: ability to kind of go back with the Foundation and
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  Speaker 4: continue to find discount chairs if we need to do
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  Speaker 4: that to get to Gardner New investors. But yeah, right
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  Speaker 4: now we're just kind of focused on getting this acquisition
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  Speaker 4: filed with the SEC and that that business combination happening,
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  Speaker 4: you know, in the first quarter of twenty twenty six.
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  Speaker 1: Listen, that's an amazing starting point. I did not realize
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  Speaker 1: it was two hundred million coming in from the foundation,
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  Speaker 1: So pretty cool that you guys are going there. I'm
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  Speaker 1: also looking at your list of partners here. This is Dragonfly, Parafly, Vanak.
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  Speaker 1: Obviously we have mn there which is coming in from
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  Speaker 1: Avalanche Direct, Falcon X, quite a few Galaxy Digital, Pantera
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  Speaker 1: you guys are loaded here for Bear. So this looks
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  Speaker 1: like it could come together pretty quickly. How fast do
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  Speaker 1: you feel like this could get listed?
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  Speaker 4: You know, the hope is that this would you know,
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  Speaker 4: that we would be able to list this in the
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  Speaker 4: first quarter, call it January or February.
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  Speaker 3: But we're you know, we're still going through that process.
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  Speaker 2: All right, it's going to be trading under avat right,
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  Speaker 2: is that correct?
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  Speaker 3: Now we're going to take her after the business combination of.
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  Speaker 1: Is it an immediate purchase for Avalanche at that time
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  Speaker 1: or will this be phased out over time?
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  Speaker 4: So when at the business combination, we will get kind
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  Speaker 4: of the cash from this BAC for those investors that
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  Speaker 4: stayed in and so you know, at that point we
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  Speaker 4: will take that cash and likely to deploy at least
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  Speaker 4: some portion of it directly into into AVAX and staking it.
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  Speaker 4: You know, we have the flexibility in the sensity to
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  Speaker 4: to do other things with that.
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  Speaker 3: So you know, whether we use.
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  Speaker 4: That for some DeFi opportunities, you know, I think it's
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  Speaker 4: very likely that we you know, we could we could
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  Speaker 4: do something like purchasing a validator and running our own notes.
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  Speaker 4: The idea here is to is to help create kind
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  Speaker 4: of a you know, a permanent capital vehicle that's used
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  Speaker 4: to take the proceeds from these investments and invest them
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  Speaker 4: broadly in the avalanche ecosystem. You know, the vast majority
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  Speaker 4: of that it's going to be owning, you know, a
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  Speaker 4: that's token and staking it. But there are other ways
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  Speaker 4: that we can garner exposure that allows people to benefit
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  Speaker 4: from the holistic growth of the of the ecosystem. You know,
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  Speaker 4: there's a lot of things on blockchains that happen that
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  Speaker 4: that have value cruel that might not work their way
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  Speaker 4: down to the token itself, and so being able to
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  Speaker 4: work you know, with our relationships with the Foundation and
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  Speaker 4: with labs and just our understanding of people in the
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  Speaker 4: ecosystem being able to find other ways for our shareholders
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  Speaker 4: to benefit investing into kind of builders, new protocols or
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  Speaker 4: l ones are being built on the Avalanche ecosystem.
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  Speaker 3: It will offer people a broader.
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  Speaker 4: Exposure to the ecosystem beyond just the token itself.
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  Speaker 1: What about Okay, so you compare what highmind is group
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  Speaker 1: is doing with avax one then Scaamuchi right there, and
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  Speaker 1: what you guys are doing. Two different routes but both
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  Speaker 1: doing the same thing in terms of a digital asset
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  Speaker 1: treasury around Avalanche specifically, how would and why would a
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  Speaker 1: investor go your route versus a avax one or other
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  Speaker 1: dats out there on the avax ecosystem.
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  Speaker 4: Well, it's a competitive landscape, so I think that you
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  Speaker 4: have to demonstrate value to investors and distinguish yourself from
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  Speaker 4: you know, not just as the alternative of you know,
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  Speaker 4: another digital so treasury. There's going to be ets out
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  Speaker 4: there that offers some levels taking. People can buy avax
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  Speaker 4: you know, at coinbase or you know, in the spot market.
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  Speaker 4: So it's not really in my mind about differentiating ourselves against.
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  Speaker 3: Any one competitor.
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  Speaker 4: There's also other chains out there, right, people are going
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  Speaker 4: to want to get exposure to ethereum and Salana.
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  Speaker 3: So it really is.
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  Speaker 4: Our ability to communicate, you know, at its core principle,
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  Speaker 4: the value of the avalanche ecosystem, and then our ability
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  Speaker 4: to provide our shareholders with some manner of differentiated exposure
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  Speaker 4: over time. So, you know, I've worked in some of
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  Speaker 4: the most competitive financial services businesses on Earth over the
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  Speaker 4: you know, over the last fifteen twenty years, and so
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  Speaker 4: what I've learned is if you know, if you can
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  Speaker 4: demonstrate value, people will will find you.
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  Speaker 2: Yeah.
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  Speaker 1: Yeah, well, I think that's the that's going to be
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  Speaker 1: the key here because a lot of these companies and
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  Speaker 1: projects are just getting started. Many people don't really understand
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  Speaker 1: the value proposition. So you've got something cut out for
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  Speaker 1: you in terms of protocols that are going to be
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  Speaker 1: used for staking and yields. Do you guys have any
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  Speaker 1: roadmap yet of how that's going to come together for you?
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  Speaker 3: So we have a lot of different paths that we
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  Speaker 3: could go.
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  Speaker 4: As I talked about, we could buy our own validator
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  Speaker 4: and we can do it that way. There's also a
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  Speaker 4: lot of other opportunities out there that that people offer
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  Speaker 4: those services. Obviously, custodians off office offer those services like
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  Speaker 4: coinbase and and bit go. So we're still evaluating all
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  Speaker 4: of those different venues. We haven't really solidified a permanent strategy,
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  Speaker 4: but the idea would be to to when you're purchasing
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  Speaker 4: the AVAX to get it up and stakes as quickly
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  Speaker 4: as possible so the shareholders benefit from from those yield returns.
• 10:39
  Speaker 1: Do you guys have any plans for you know, tokenizing
• 10:42
  Speaker 1: the stock at some point and make an available over
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  Speaker 1: on the a VAX ecosystem.
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  Speaker 3: Will that?
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  Speaker 2: Will that happen?
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  Speaker 4: I think it's I think it's certainly something that that
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  Speaker 4: not only we are going to do, but a lot
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  Speaker 4: of other digitaliz and treasuries are going are going to
• 10:54
  Speaker 4: aspire to do a lot of what will be interesting
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  Speaker 4: over the course of the next you know, a few months.
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  Speaker 3: Is the key that we take from the sec.
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  Speaker 4: Right, and so you know what is what makes you
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  Speaker 4: know an activity, uh, you know, investment management versus you know,
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  Speaker 4: just treasury management.
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  Speaker 3: And so our goal is to.
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  Speaker 4: Take our keys from the regulators as we go through
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  Speaker 4: this process, and then once we understand the rules of
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  Speaker 4: the road is to maximize our exposure and returns and
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  Speaker 4: creating value for shareholders.
• 11:25
  Speaker 1: What would be the I don't know if you saw this.
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  Speaker 1: It was Paul Atkins and the SEC. We're out talking
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  Speaker 1: about this this week, and this is in reference to,
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  Speaker 1: you know, kind of these packaged deals that we're going
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  Speaker 1: to see in terms of indexes around digital assets.
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  Speaker 2: And also to your point.
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  Speaker 1: Is if the SEC is going to lean less on
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  Speaker 1: companies who are trying to innovate, is basically was the
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  Speaker 1: result of what they're trying to do.
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  Speaker 2: Do you think that will.
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  Speaker 1: Make it easier for you guys in terms of going
• 11:54
  Speaker 1: to market with new products and services.
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  Speaker 3: I think we are going to.
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  Speaker 4: I have all always in my career taking a fairly
• 12:01
  Speaker 4: conservative approach towards regulatory and legal compliance. So we're gonna
• 12:05
  Speaker 4: we're gonna, you know, we're going to take the cues
• 12:07
  Speaker 4: from the industry industry. But yeah, it feels very much
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  Speaker 4: like this SEC is pro innovation and they are going
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  Speaker 4: to try to strip away whatever regulatory constraints that are
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  Speaker 4: unreasonable on businesses.
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  Speaker 3: You know, in my role as as a fiduciary and
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  Speaker 3: and and in a.
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  Speaker 4: CEO, I also have to be forward looking, right and
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  Speaker 4: to make sure that the the regular regulations that we
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  Speaker 4: are following are codified and that you know that we
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  Speaker 4: you know, we're we're building this and a strategy that
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  Speaker 4: works in this environment and and potentially, uh, you know,
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  Speaker 4: maybe a more restrictive digital asset environment you know, in
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  Speaker 4: the future.
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  Speaker 2: Yeah, for sure.
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  Speaker 1: Well, and I think as we see more of these
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  Speaker 1: uh innovations start to hit Wall Street in ways that
• 12:55
  Speaker 1: we don't even know what kind of new products and
• 12:57
  Speaker 1: services are going to be offered out there, it'll be interesting.
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  Speaker 2: To see how the SEC responds to that.
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  Speaker 1: So, hey, Bart, it has been great having you on.
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  Speaker 1: We're going to be watching these digital asset treasury companies
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  Speaker 1: very closely, especially now that Avalanche is starting to get
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  Speaker 1: a few in the in the mix. So thanks for
• 13:12
  Speaker 1: coming in today. We appreciate it.
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  Speaker 3: I appreciate the time.
• 13:15
  Speaker 2: Paul, you bet all.
• 13:16
  Speaker 1: Right, you guys make sure and jump in on our
• 13:18
  Speaker 1: Diamond Circle. That's our own private group you guys can
• 13:20
  Speaker 1: get to. We always leave a link down below follow
• 13:23
  Speaker 1: me out there on X at Paul Baron. We'll catch
• 13:25
  Speaker 1: you next time right here on The Paul Baron Show.