Latest / The Paul Barron Crypto Show / Is Coinbase Safe?🛡️Ripple Swell 2024 | Phillip Martin | Coinbase INTERVIEW

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Is Coinbase Safe?🛡️Ripple Swell 2024 | Phillip Martin | Coinbase INTERVIEW · The Paul Barron Crypto Show

0:00
Speaker 1: We are here at Swell twenty twenty four covering the
0:03
Speaker 1: Ripple event.
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Speaker 2: They'll Phillip, great to meet you. Great to meet you
0:05
Speaker 2: as well. Great to have you on the show.
0:06
Speaker 1: Let's kind of jump into a little bit around the
0:10
Speaker 1: framework of where security begins at coinbase, because I think
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Speaker 1: a lot of people who think of coinbase look at
0:16
Speaker 1: it from a retail front, don't necessarily look at it
0:18
Speaker 1: from maybe a institutional.
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Speaker 2: Capital side yet, which is a bigger part of that.
0:23
Speaker 1: Talk to me about the framework that you guys are
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Speaker 1: involved with in terms of building a security system at coinbase.
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Speaker 3: Sure, so security obviously critical to what coinbase does, right,
0:32
Speaker 3: one of the foundational elements that you know coin Base
0:35
Speaker 3: bas the table is that trust, is that track record,
0:36
Speaker 3: is that ability to protect what was a time of
0:39
Speaker 3: our last you know, ten Q two hundred and sixty
0:42
Speaker 3: nine billion dollars worth of US dollars or worth of assets.
0:46
Speaker 3: And so we spend a lot of time and effort
0:49
Speaker 3: on both building the team that builds security into our
0:53
Speaker 3: products as well as you know, focusing on secure design
0:57
Speaker 3: from the very very beginning. And that's really independent of retail,
1:00
Speaker 3: institutional or anything else, because when you think about cybersecurity breaches,
1:04
Speaker 3: you know, the high end stuff, the you know, flashy
1:08
Speaker 3: zero days whatever. Everyone's excited about that and it's really
1:11
Speaker 3: cool when you see it, but the vast majority of
1:13
Speaker 3: breaches happen, you know, day and day out for very
1:16
Speaker 3: mundane reasons.
1:17
Speaker 2: Yeah.
1:17
Speaker 3: Right, people don't patch, they fail to write software security
1:21
Speaker 3: things like that. So we're very, very focused on doing
1:23
Speaker 3: that consistently over time, every single time.
1:26
Speaker 1: When you look at the horizon, especially at this point
1:29
Speaker 1: where we're getting with things like AI. Obviously the integration
1:33
Speaker 1: of a lot more I think savvy people around crypto
1:36
Speaker 1: and blockchain in general. Is there anything you guys are
1:39
Speaker 1: looking at?
1:40
Speaker 2: Yeah?
1:41
Speaker 3: So I think AI is a fascinating sort of ingredient
1:44
Speaker 3: had to the mix here. My view of AI is
1:47
Speaker 3: it doesn't necessarily make things better, it makes them faster.
1:49
Speaker 3: What does that mean for bad guys? Well, that means
1:52
Speaker 3: scammers can can be more efficient, There can be more
1:54
Speaker 3: of them out there, and they can.
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Speaker 2: Move a lot more, create more.
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Speaker 3: Well you know, I would say, actually know, but the
2:02
Speaker 3: average level of creativity increases.
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Speaker 2: Right.
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Speaker 3: You can take someone right off the street, give them
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Speaker 3: an AI bought and they'll look and feel like I'm
2:09
Speaker 3: much more experienced exactly right, just the same as you
2:12
Speaker 3: would someone who's maybe trying to do trading strategy.
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Speaker 1: So are you saying that maybe with AI it's easier
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Speaker 1: to detect it.
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Speaker 3: So that's the other side of it as well, right,
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Speaker 3: is that AI makes things faster, including both the bad
2:26
Speaker 3: guys and the good guys.
2:27
Speaker 2: Okay, right, And.
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Speaker 3: So we are doing tons of research and looking into
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Speaker 3: where and how do we integrate AI into our ability
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Speaker 3: to detect and respond as well?
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Speaker 2: Talk about the side.
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Speaker 1: I mean, we just saw a huge situation with TD Bank,
2:43
Speaker 1: a lot of drug money running through what is traditional FIAT.
2:47
Speaker 1: People have pointed, including Senator Warren at the crypto and
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Speaker 1: blockchain market, as being one of the key contributors to this.
2:55
Speaker 1: What you're saying, though, and what we're finding is that
2:57
Speaker 1: is not necessarily the case. But at coinbase it can
3:01
Speaker 1: still be used for that. I mean, if you have
3:03
Speaker 1: somebody that's got you know, an LLC and you know
3:06
Speaker 1: South America for whatever reason, they're setting up shell companies,
3:09
Speaker 1: et cetera, and then hosting funds, whether it's bitcoin or
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Speaker 1: many other digital assets, how do you guys go about
3:15
Speaker 1: trying to track things like that?
3:17
Speaker 2: Sure, and so.
3:18
Speaker 3: What's interesting to me is that you know, we did
3:21
Speaker 3: in the List of Financial report, I think it was
3:23
Speaker 3: a month or two back, published that publishing stats on
3:25
Speaker 3: the amount of the list of finance that we see
3:27
Speaker 3: being used in crypto. The fact that we can even
3:30
Speaker 3: get close to that number is a unique characteristic of crypto.
3:35
Speaker 3: If you try to do that for the US dollar
3:37
Speaker 3: economy right as many people have, you end up with
3:40
Speaker 3: wildly divergent numbers, primarily because it's so hard to track
3:43
Speaker 3: where this stuff is. Like how much list of finance
3:46
Speaker 3: is there in the US dollars? Number one a lot
3:49
Speaker 3: more than in crypto, but number two no one knows.
3:52
Speaker 2: I would agree with that.
3:53
Speaker 1: But in the sense of the United States, most likely
3:57
Speaker 1: we're going to get a stable coin bill, which means
3:59
Speaker 1: that we're going to start seeing corporations holding a lot
4:02
Speaker 1: more digital asset potential, which means that you guys are
4:05
Speaker 1: probably going to end up with a lot more customers
4:07
Speaker 1: that are now holding things like USDC and other stable
4:11
Speaker 1: coins here in the US as capital. And that of
4:14
Speaker 1: course is going to open people up to security measures.
4:16
Speaker 1: They're going to start asking a lot more questions to
4:18
Speaker 1: guys like you when you look at major investment platforms,
4:23
Speaker 1: whether it's someone like a black Rock who's using Coinbase
4:26
Speaker 1: for security. Is there things that you guys are doing
4:31
Speaker 1: right now to kind of prepare for that, get ready
4:33
Speaker 1: for those kinds of I.
4:34
Speaker 2: Mean, the star is yeah.
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Speaker 3: The tact of the matter is we're already asked these questions, right,
4:39
Speaker 3: we already have major institutional clients on the platform.
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Speaker 2: But at scale.
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Speaker 1: You know, right now we're dealing with a two point
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Speaker 1: eight trillion dollar market that could easily blooon up to
4:48
Speaker 1: maybe six trillion in this bull run. That's a lot
4:51
Speaker 1: bigger market and a lot more digital assets.
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Speaker 3: It is, but the process isn't different, same thing, so
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Speaker 3: your the same thing, this is executing it more for sure.
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Speaker 3: That's actually a place where AI can help in a
5:04
Speaker 3: lot of cases, as it turns out, because a lot
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Speaker 3: of the stuff is answering questions that we already know
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Speaker 3: the answer to right right, and so how do we
5:10
Speaker 3: do that?
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Speaker 2: How do it quickly and efficiently? There's a place for
5:13
Speaker 2: AI and.
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Speaker 1: That What are you guys doing to kind of open
5:16
Speaker 1: up that communication line with DC, especially around security, because
5:21
Speaker 1: I think that's the main thing, much like the banks
5:23
Speaker 1: have done the banks have been able to do this
5:25
Speaker 1: very effectively with d C.
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Speaker 2: How are you guys doing it?
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Speaker 3: So we're honestly doing a lot of the same thing
5:30
Speaker 3: that the banks have done. We just recently stood up
5:32
Speaker 3: what's called an I sack and an intelligence sharing group that's
5:37
Speaker 3: a public private partnership.
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Speaker 2: Specifically for crypto.
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Speaker 3: Okay, So the biggest IS sack today is called FIAC,
5:44
Speaker 3: the Financial Services I sack. Right, it's where all the
5:45
Speaker 3: banks come together and talk amongst themselves as well as
5:49
Speaker 3: interface with the government on security matters.
5:52
Speaker 2: And it's great.
5:52
Speaker 3: We've been members of that for a long time. But
5:54
Speaker 3: the problem is they only let financial institutions into that group,
5:57
Speaker 3: so they might quibble at Ripple, for example, being added
6:00
Speaker 3: to f SI sack. They would say, well, you're not
6:01
Speaker 3: really a financial institution. And so we set up crypto
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Speaker 3: I sacks we could bring everyone together in one place
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Speaker 3: and talk with it with the unified voice in that way.
6:10
Speaker 2: There's also been a bunch of.
6:11
Speaker 3: Efforts staying with crypto I'm sure you're deeply aware of it,
6:15
Speaker 3: come from the industry as a whole, more of.
6:17
Speaker 1: A lobbying platform though, but getting into d C from
6:22
Speaker 1: a sense of you know, kind of the nuts and
6:24
Speaker 1: bolts of security. You're saying, iack is kind of the.
6:27
Speaker 2: Iacks a way to do it.
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Speaker 3: We also do a bunch of work briefing staff and
6:31
Speaker 3: members when they ask, when they're interested in really really
6:35
Speaker 3: telling the message that like, hey, look this is possible
6:37
Speaker 3: to do safely and securely, and look at us, we've
6:40
Speaker 3: done it before.
6:40
Speaker 1: Are you finding that education pathway open for DC? Because
6:44
Speaker 1: that's one of the things we've talked to several Congressmen
6:46
Speaker 1: in the last thirty days here leading up to possibly
6:50
Speaker 1: a change in an administration. Right now, we've seen the
6:54
Speaker 1: Biden Harris administration really hold the line when it comes
6:57
Speaker 1: to digital assets in terms of pressure.
7:00
Speaker 2: Obviously that's supported through Senator Warren.
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Speaker 1: My question is is what are the and really coin
7:05
Speaker 1: base is one of, if not the alpha dog in
7:08
Speaker 1: the game here in the US. But to be able
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Speaker 1: to get our lawmakers kind of educated because I've been
7:14
Speaker 1: surprised in interviewing them, how yet totally educated they are
7:20
Speaker 1: around this space.
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Speaker 2: What are you guys doing there?
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Speaker 3: There's obviously a spectrum of curiosity, curiosity, openness right around
7:27
Speaker 3: digital assets. So where we have that curiosity, we like
7:31
Speaker 3: to show up and educate. Right. We have a whole
7:33
Speaker 3: policy team based in DC that does that focuses on
7:36
Speaker 3: this exact things, educating those lawmakers, having the conversations, bringing
7:39
Speaker 3: the experts, whether it be from security.
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Speaker 2: Or AML or compliance or.
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Speaker 3: Wherever, into the room to help to help these lawmakers
7:46
Speaker 3: understand what crypto is all about.
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Speaker 1: On the security side, are you guys working any with
7:52
Speaker 1: the Base team and what they're doing.
7:54
Speaker 3: Oh yeah, we just spent a ton of time with
7:56
Speaker 3: Base and what they're doing. Both from a security review perspective.
8:00
Speaker 3: We've spent countless, countless hours reviewing that building tools.
8:04
Speaker 1: Absolutely, is there anything that developers have to go through
8:08
Speaker 1: from a security standpoint to be able to develop on
8:11
Speaker 1: Base and address anything it is.
8:13
Speaker 3: Open permissions, blockchained, doesn't, that's LQ obviously, then they can
8:18
Speaker 3: hop on that and develop whatever they want.
8:19
Speaker 2: Just go.
8:19
Speaker 3: Absolutely, we're focused on not gatekeeping on ice.
8:23
Speaker 2: Let's talk.
8:24
Speaker 1: Let's go a little bit further into retail security because
8:26
Speaker 1: this is one I think a lot of our viewers
8:30
Speaker 1: are maybe more interested in because there's a lot of
8:32
Speaker 1: people that are not an institutional happily use coinbase as
8:35
Speaker 1: their primary, you know, place for crypto and if you
8:40
Speaker 1: look at security in general, it has been somewhat solid.
8:44
Speaker 1: I will say that, you know, maybe the biggest snaphu
8:47
Speaker 1: was in the last ballroom we saw zero balances come out.
8:50
Speaker 1: How would you guys address your learnings from that cycle
8:54
Speaker 1: to where you are now and the prep of what
8:56
Speaker 1: we might see sure coming out?
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Speaker 3: And that was actually I mean, it obviously caused alarm
9:01
Speaker 3: amongst folks. I got any number of text messages when
9:03
Speaker 3: that happened, saying what's going on? But in reality that
9:07
Speaker 3: was that was a back end degraded system rather than
9:12
Speaker 3: any security issue there.
9:14
Speaker 2: I think we spend.
9:15
Speaker 1: When you say back in degraded system, what do you
9:17
Speaker 1: mean by that, It's a database that got overloaded. Okay,
9:20
Speaker 1: so just too much at one time and it just
9:22
Speaker 1: couldn't respond.
9:23
Speaker 3: And it broke in a way that unfortunately showed the
9:26
Speaker 3: numbers of zero realities. There was not the way we want,
9:28
Speaker 3: not a good, not the way we want things to go,
9:30
Speaker 3: and so we focused on There's two things here right
9:32
Speaker 3: One is preparing for the inevitable spikes that come with
9:35
Speaker 3: bo runs, and two is understand is realizing that no
9:38
Speaker 3: matter how much you prepare, if you get you know,
9:41
Speaker 3: you have to set a target whatever, however many million
9:43
Speaker 3: users your target is, and as you start to exceed that, right,
9:48
Speaker 3: the systems are going to degrade. So that should degrade gracefully.
9:51
Speaker 3: Zero balance should not be a thing. It should it
9:53
Speaker 3: should say something else right, it's loading whatever right and
9:59
Speaker 3: being able to to do that, to do the testing
10:02
Speaker 3: to get ahead of these these spikes and realize that
10:05
Speaker 3: that we're never going to be ahead of every single spike.
10:07
Speaker 3: We can't predict the future here sure, so we need
10:09
Speaker 3: to make sure that when those when that things happen,
10:11
Speaker 3: that that us receive.
10:12
Speaker 2: So you're feeling better about this cycle? Company up, I am.
10:16
Speaker 1: Let's talk about customer security because I know you know
10:20
Speaker 1: me myself. I'm a coinbase user most of the people
10:22
Speaker 1: I know and have talked to many times or coin
10:24
Speaker 1: based users, and privacy and security of our data and
10:30
Speaker 1: our information very paramount in terms of top on the list.
10:34
Speaker 1: Most people in crypto somewhat paranoid, I would say, rightly, So,
10:41
Speaker 1: how are you guys dealing with that? Because that obvious
10:44
Speaker 1: is going to open up a can of worms as
10:46
Speaker 1: we start to see regulatory framework enacted here in the
10:49
Speaker 1: United States, how will Coinbase protect customers information.
10:53
Speaker 3: Yeah, and I think there's there's a there's a that's
10:55
Speaker 3: probably a half hour conversation right there.
10:57
Speaker 2: Let's hit the top. Let's let's let's let's hit the
10:59
Speaker 2: top of that.
11:00
Speaker 3: Which is that the same way we always have first
11:03
Speaker 3: of all, is the answer.
11:04
Speaker 2: Regulatoi frameworks are important.
11:05
Speaker 3: They're critical because they create consistency in how things are treated.
11:10
Speaker 3: But regular frameworks don't generally make good security. They make
11:14
Speaker 3: they make a floor, is how we look at it, right,
11:18
Speaker 3: And so the things that we've been doing to protect
11:21
Speaker 3: consumer assets, consumer information, by the way, my information and
11:25
Speaker 3: my assets too. I keep all of my assets on
11:27
Speaker 3: coinbase is the same things we're gonna be doing tomorrow
11:31
Speaker 3: when that regulatoid framework drops. Maybe just tweak things to
11:34
Speaker 3: align better with you know, the words in the in
11:37
Speaker 3: the in the regulations both here and internationally, right with
11:41
Speaker 3: Mika and Dora in the EU similar such similar situation
11:45
Speaker 3: two is we have So that's like protecting from from
11:49
Speaker 3: bad guys, right, how about protecting from over sharing with
11:53
Speaker 3: with governments?
11:53
Speaker 2: Right?
11:53
Speaker 3: We have a long track record of challenging overbroad requests
11:58
Speaker 3: for data. If you remember back in Ony seventeen, we
12:02
Speaker 3: were in court with the IRS over a very broad
12:06
Speaker 3: information sharing request that we got.
12:07
Speaker 1: Yew, they were looking for pretty much a full rundown
12:10
Speaker 1: of all users and activity there within that. Do you
12:14
Speaker 1: feel that that pressure is going to continue from government
12:17
Speaker 1: agencies in the future and how are you guys prepared for.
12:20
Speaker 3: You know, I think, as with any financial financial institution,
12:23
Speaker 3: there's a balance of satisfying a government's legitimate need for
12:27
Speaker 3: information for law enforcement purposes things like that. And we
12:32
Speaker 3: make no bones about the fact that that we will
12:33
Speaker 3: absolutely we respond to warrants and subpoenas and government requests
12:37
Speaker 3: for data that are reasonable in size and scope and.
12:38
Speaker 2: Purpose, right, no problem.
12:41
Speaker 3: But when we will push back when that scope is
12:45
Speaker 3: overbroad or is what we believe to be you know,
12:49
Speaker 3: untargeted or more of a dragnet.
12:51
Speaker 2: Interesting.
12:52
Speaker 1: Okay, So with that being the case, because I think
12:54
Speaker 1: that that's a scenario that a lot of people are
12:57
Speaker 1: more worried about. That of course brings up DeFi based wallet,
13:00
Speaker 1: one of the best wallets out there for DeFi and
13:03
Speaker 1: in general, and also I think competitive in the space
13:06
Speaker 1: of where decentralized finance is going.
13:09
Speaker 2: As you see more users.
13:11
Speaker 1: Starting to off board assets into define what is coinbase
13:17
Speaker 1: doing to kind of bridge that process? From a security standpoint,
13:21
Speaker 1: coin you know, the wallet itself is pretty significant. We
13:23
Speaker 1: have the wallet team on here before. They've been very
13:26
Speaker 1: you know, forthcoming and how they're building. What are you
13:29
Speaker 1: guys seeing from a security standpoint in terms of any issues?
13:31
Speaker 3: You know, what's interesting is that, you know, the rallying
13:36
Speaker 3: cry for a long time has been sort of be
13:37
Speaker 3: your own bank, right with with this, with with DeFi
13:40
Speaker 3: and with wallets, and and like, I'm all for that, right,
13:43
Speaker 3: but you didn't have to be your own bank, and
13:46
Speaker 3: that with all of the where your backup stored?
13:49
Speaker 2: How do you pro phrase?
13:51
Speaker 3: Is what happens if your house burns down? Does that
13:54
Speaker 3: backup in your mom's basement? Is it it's just still viable?
13:56
Speaker 2: Is it there? Did she throw it out? Right?
13:58
Speaker 3: Like, all of these things start to become top of
14:02
Speaker 3: mind issues that from a extodium standpoint we take care of, right,
14:05
Speaker 3: We handle all of that, And so it's a very
14:08
Speaker 3: different threat model for people. And that's the biggest thing
14:11
Speaker 3: I think people people need to help themselves understand is
14:14
Speaker 3: they need to now think about their protecting whatever it is.
14:18
Speaker 3: A million dollars of USDC. That's just quite significant amount.
14:24
Speaker 1: Well, it's a different It definitely is a different security
14:26
Speaker 1: layer because it's something that most consumers, especially retail, they've
14:30
Speaker 1: never been exposed to that kind of exposure in general,
14:35
Speaker 1: and especially from a standpoint of having to deal with
14:38
Speaker 1: Steve phrases and the technology behind blockchain. With that being
14:41
Speaker 1: the case, do you feel that coinbase is in a
14:44
Speaker 1: position to do things.
14:46
Speaker 2: Like recovery efforts.
14:48
Speaker 1: Obviously it's easy on the exchange, you know, fairly simple
14:52
Speaker 1: to a certain extent, But when people are moving in
14:55
Speaker 1: and out of DeFi, which is pretty frequent right now,
15:00
Speaker 1: a lot of people assets moving off, we're going to
15:02
Speaker 1: see an onslaught of assets moving on for transactions, et cetera.
15:07
Speaker 1: That process and the security for that. Any potential products
15:12
Speaker 1: or services that coinbase might offer in the future to
15:14
Speaker 1: help kind of aid that.
15:16
Speaker 3: I hate to get into future products because they don't
15:18
Speaker 3: exist yet, but I think stepping back and answering more broadly,
15:23
Speaker 3: I think that you know, we've done some work in
15:26
Speaker 3: wallet on things like transaction transparency and helping people understand
15:30
Speaker 3: exactly what the transaction they're signing is going to do.
15:33
Speaker 3: That's very important, right, because some of these transactions get
15:35
Speaker 3: very complicated and around you know, education for people as
15:43
Speaker 3: they're touching seed phrases things like that, right, very very
15:46
Speaker 3: important as well well.
15:48
Speaker 1: And you've got so much activity happening in the swap
15:50
Speaker 1: space within the DeFi scenarios, and that it starts to
15:53
Speaker 1: change things up because an asset leaves in exchange, goes
15:56
Speaker 1: into a DeFi wallet ends up being swapped for five
16:00
Speaker 1: times for you know, token to token, platform to platform
16:04
Speaker 1: may make it back into an exchange completely different as
16:07
Speaker 1: an asset being able to track that.
16:10
Speaker 2: I know.
16:10
Speaker 1: Coinbas does some things from a tax standpoint. I won't
16:12
Speaker 1: get into all that but from your services side, but
16:15
Speaker 1: the security side of it is still a very it's.
16:18
Speaker 2: Big sustaining it requires a lot of education. I think.
16:20
Speaker 3: The other piece here is is the smart wallets are
16:23
Speaker 3: going to be a fascinating piece here as well as
16:26
Speaker 3: we see more consumers adopt those. I think the capabilities
16:28
Speaker 3: that those bring a chain are fascinating.
16:30
Speaker 1: That's probably the one thing that I've seen come out
16:33
Speaker 1: of coin base in the last twelve months that I
16:35
Speaker 1: felt is this is a huge leap forward, especially for
16:37
Speaker 1: the onboarding of so many new people into.
16:40
Speaker 2: Crypto makes it much much easier for sure.
16:42
Speaker 1: Okay, let's talk about the future a little bit and
16:45
Speaker 1: kind of where you see from a regulatory standpoint. Let's
16:48
Speaker 1: say we have a perfect storm here and we get
16:53
Speaker 1: a favorable administration in the White House, we possibly get
16:57
Speaker 1: a stable coin bill going through Senate, and then of
17:02
Speaker 1: course we start to see a lot more adoption because
17:06
Speaker 1: those are the three key things that really need to happen.
17:09
Speaker 2: What would that mean for the industry?
17:11
Speaker 1: Do you feel like, you know, from not only from
17:12
Speaker 1: a security standpoint, but just a growth standpoint.
17:16
Speaker 3: I mean, it's going to be a fascinating situation. I
17:18
Speaker 3: think you hit it on the head that we're going
17:19
Speaker 3: to see more people, more institutions in the space. It's
17:23
Speaker 3: obviously the committary increases in volume. I think with more
17:27
Speaker 3: people in the space. From a security perspective, I always
17:29
Speaker 3: think about education. How do we how do we bring
17:31
Speaker 3: them into crypto in a way that's a positive first
17:34
Speaker 3: experience where they understand what the security concerns in this
17:39
Speaker 3: space are and can posture themselves effectively appropriately. I talked
17:44
Speaker 3: a lot about about that sort of consumer protection angle.
17:47
Speaker 3: As you know, we all learn some basic skills growing
17:49
Speaker 3: up over the kitchen table, right, don't don't turn your
17:53
Speaker 3: mail off when you go on vacation, things like that, Right,
17:56
Speaker 3: None of us learn.
17:56
Speaker 2: Those things about cybersecurity.
17:58
Speaker 3: Yeah, right, So that's the primary thing that comes to
18:00
Speaker 3: me is with more adoption, with more volume, with more people,
18:03
Speaker 3: there's more.
18:03
Speaker 2: Education, there's uh, there's uh.
18:07
Speaker 3: I think a real focus for us on making sure
18:09
Speaker 3: there's people come into this space safely and learn what
18:13
Speaker 3: they need to learn well.
18:14
Speaker 1: And the amount of phishing scams that we're seeing in
18:17
Speaker 1: crypto right now, I would say dwarf that in most
18:20
Speaker 1: of the traditional FIAT systems for you know, several reasons. Obviously,
18:24
Speaker 1: the access to what we might see in the DeFi
18:27
Speaker 1: side of things, a lot of things that move quicker
18:29
Speaker 1: obviously with crypto and are difficult to do forensic analysis.
18:33
Speaker 1: It takes quite a bit of work to be able
18:35
Speaker 1: to do that, but it is happening. Do you guys
18:38
Speaker 1: have a forensic analysis team when you're trying to track
18:40
Speaker 1: bad actors?
18:41
Speaker 3: So you mean in terms in terms of blockchain, yes,
18:44
Speaker 3: so we do. We do a lot of work with
18:46
Speaker 3: blockchain tracking of bad assets for two reasons. Number one,
18:51
Speaker 3: so that we can better find the patterns in what
18:53
Speaker 3: they're doing, and we can prevent bad things from happening
18:56
Speaker 3: in other cases.
18:57
Speaker 2: And two is so.
18:58
Speaker 3: That we can help track these actors and to the
19:03
Speaker 3: extent we can group at we can group activity together
19:05
Speaker 3: and you know, give a law enforcement a head start
19:09
Speaker 3: tracking these folks with them.
19:11
Speaker 1: So, without going into kind of the secret sauce, but
19:14
Speaker 1: a lot of the AML regulatory alignment for banks are
19:19
Speaker 1: fairly well known. I think when people go in and
19:21
Speaker 1: try to do something over a ten thousand dollars transaction,
19:24
Speaker 1: certain kinds of transactions that come in that do a
19:26
Speaker 1: quick turnaround those kind of things, the traditional things.
19:29
Speaker 2: That are easy to track.
19:30
Speaker 1: Crypto is quite a bit different, as you can push
19:33
Speaker 1: you know, bitcoin or ethereum into an exchange, make a
19:36
Speaker 1: couple of trades within that, and then do a quick
19:40
Speaker 1: flip out. Is there anything within the coin based system
19:43
Speaker 1: from a security standpoint that's flagging those kinds of activities?
19:46
Speaker 2: Sure we have, mean how do you go about it? Sure?
19:49
Speaker 3: We have all the same AML requirements that a bank does,
19:51
Speaker 3: right based on how many transmitter licenses in every state
19:55
Speaker 3: that that requires them, And so we do all that
19:58
Speaker 3: same kind of suspicious transaction review and monitoring.
20:01
Speaker 1: I've never seen a suspicious I guess you're just not suspicious.
20:05
Speaker 1: I feel like I should be because I'm always doing
20:08
Speaker 1: things crazy that is within there.
20:10
Speaker 2: But what would be the threshold? Is it monetary value
20:15
Speaker 2: or is.
20:15
Speaker 3: It just that I don't want to get into much
20:17
Speaker 3: to the giveaway the specific like you know components there that.
20:22
Speaker 2: But but I guess you're just not suspicious enough. They
20:27
Speaker 2: were not. You've got to be more suspicious before.
20:30
Speaker 1: Unfortunately that's not that's not our But.
20:33
Speaker 2: That's a good one. All right.
20:35
Speaker 1: Last question to you, and that is if you had
20:37
Speaker 1: one consideration right now in this next bull run.
20:39
Speaker 2: That your most or biggest concern, what would it be.
20:43
Speaker 3: The same concern I have every bull run is that
20:45
Speaker 3: as people get into crypto, they do so with the
20:48
Speaker 3: right amount of education, with the right amount.
20:51
Speaker 2: Of of of of for.
20:54
Speaker 3: Lack of a better word, of respect for the space
20:57
Speaker 3: and how it is different.
20:58
Speaker 1: And do you think is this will be the cycle
21:01
Speaker 1: that will get to a point where almost everybody is
21:04
Speaker 1: somewhat more savvy around this.
21:06
Speaker 3: You know, the thing I've learned after eight and a
21:07
Speaker 3: half years in crypto a coinbase is I can't predict
21:11
Speaker 3: anything with regard to this market, so I hope so
21:14
Speaker 3: that would be that would be lovely.
21:16
Speaker 2: But you know, I think any more about.
21:18
Speaker 1: It, there's been a lot a lot of I think
21:20
Speaker 1: in the media, a lot of scare So I think
21:22
Speaker 1: people when they come into crypto at lost almost every
21:24
Speaker 1: person that I talk to that's brand new to crypto,
21:27
Speaker 1: first thing they always ask me is security questions.
21:30
Speaker 2: You know, how secure is it if I go on Coinbase?
21:33
Speaker 2: Is that like a bank? You know?
21:34
Speaker 1: Should I be on and off between my bank and
21:37
Speaker 1: you know? And I say, well, it depends on where
21:39
Speaker 1: you're comfortable, right, if you're comfortable banking versus Coinbase. But
21:44
Speaker 1: if you're comfortable on Coinbase, then it's a great system
21:46
Speaker 1: to kind of go in that. So anyway, very good stuff,
21:49
Speaker 1: Philip Martin. Great to have you on the show. Thanks
21:51
Speaker 1: for coming in today.
21:52
Speaker 2: We appreciate it. Happy to do it. Yep, are you guys?
21:54
Speaker 1: Are have been covering more here from Swell. We've got
21:56
Speaker 1: a couple more interviews covering a handful of speakers. Will
22:00
Speaker 1: also give you, guys some of the announcements that are happening,
22:03
Speaker 1: So stay tuned right here on the show.
22:04
Speaker 2: We'll catch you soon.
22:05
Speaker 1: Thank