NCFA Canada | Sep 7, 2018

Ep8-Sep 7:  Institutionalization of Crypto, China's Ban and the Potential of Blockchain Decentralization

About this episode: On this episode, our host Manseeb Khan sits down with Juwan Lee the founder and CEO of NexChange. They talked about institutions investing in crypto, some the up and coming players in the market and China being pro blockchain. Enjoy!

Host: Manseeb Khan, NCFA, Fintech Fridays show host

Guest: Juwan Lee, Founder and CEO, NexChange

Bio:  Juwan Lee is an entrepreneur, VC, blockchain and finte professional with three decades of investment industry portfolios and organizations on behalf of multi-billion dollar hedge funds, proprietary trading desks, asset management and venture capital firms.  He is the Founder and CEO  of NexChange, a venture innovation platform, CEO  of Arrakis Ventures and co-Founder and Director of the Blockchain Centre of Hong Kong. He is a co-founder of tokenScale, a blockchain accelerator created in partnership with brinc. Along with Cyberport, he co-created the Fintech O2O brand. His firm,  NexChange, created the Block O2O brand connecting the global blockchain sector and the Healthtech O2O brand for the healthtech community.  Mr Lee was formerly the CIO of the largest Shanghai-based asset management firm. He spent numerous years at JP Morgan in a variety of roles from principal investments to heading equity within the asset management division. As an early pioneer in managing technology portfolios he worked with SAC  Capital, Osprey, Rothschilds and Montgomery. He funded many star companies in Silicon Valley (including Netscape, Yahoo and Eidos - Tomb Raider), Taiwan's Hsinchu Science Park, Bangalore India, Korea and Israel.

Join NCFA's weekly Podcast series 'FINTECH FRIDAY$' where we sit down with the incredible people in the Fintech community and talk about leading fintech products innovations developments and challenges!

Subscribe and tune in each Friday to check out the latest movers and shakers in fintech.

Listen to more Fintech Fridays podcasts here

Transcription of Interview

Manseeb Khan : Hey everybody, Manseeb Khan here and you are tuning in to the NCFA's newest podcast series Fintech Fridays. Today I have an absolutely incredible guest with me. He's an incredibly busy man. You may have seen some of the stuff online because he's very big in the block chain, crypto space. Today I have Juwan Lee. Thank you so much for making it today. With all the delays everything you still made it. I'm very thankful.

Juwan Lee: Well Manseeb, thank you so much for having me. I'm so glad to be here.

Manseeb Khan : No absolutely. So, for the audience, for the I'm pretty sure three or four people that have no idea who you are. Could you just for a minute give us a little bit of your background and a little bit more of who you are and what your company does?

Juwan Lee: Yes sure. Well my background originally stems from investing. I spent many years in the Silicon Valley. venture capital and late stage investments and then did money management and hedge funds asset management. So, my background is mostly in investments. The company that I started about four and a half years ago is called NexChange and we are ecosystem as a service and people always ask me what does that mean. Well we're in the innovation space and we do a number of things we either market invest or create innovative products

Manseeb Khan : Awesome. So, I guess going through some of your past successes you've been you've been a very early Yahoo. And Netscape guy so could you. And being very much in the Crypto and blockchain space could you give us a little bit more insight of where you see the market going when it comes towards crypto?

Juwan Lee: Well I think the first thing I would say is that it's very early stages of crypto. It's really if you look at the size of it. I mean the price of Ethereum the price of Bitcoin has come down dramatically. So, the size is about 200 billion. So, when you compare that to the size of capital markets which is based on our estimates over five hundred trillion. I mean this is tiny and where we've seen is a kind of the normal growth pattern that you see in any form of technology. We saw Bitcoin have come down precipitously in price. I think it was driven by a number of things. You know ICO prices have come down dramatically. The use case Tokens have come into question. And you know just sheerly the idea of building community with entrepreneurs that have very little experience. So, a lot of things have in the short term come into question. However, this is a viable industry. We're in the early stages and either I'm very excited about the bright future for cryptocurrency and the decentralization world of blockchain.

Manseeb Khan: That was 500 trillion you said?

Juwan Lee: 5 trillion is the size of capital markets when you include real estate, gold, bonds you know equity as a very large market this is not cryptocurrency. This is our current capital markets and other assets.

Manseeb Khan: I guess speaking of current assets and current capital markets how you see institutions being part of this new wave is that a very much evolve and die situation. Or how do you see them play a role. And if a factor in the new space.

Juwan Lee: Lot of people been talking about the institutionalization of the ICO market, but I think even more fundamental than that is the institutionalization of the crypto fund industry. We've seen a rapid increase in the number of funds. I think it's now over 400 U.S. is still the largest. Institutions are getting them all like traditional VCs setting up their own crypto funds. Some VC's are ear marking their assets for crypto projects. So, what we're seeing is a lot more interest from institutions to get into this space was appealing for them. Is this is a uncorrelated asset highly inefficient still. There's a lot of opportunity for Alpha and a new investable asset class so definitely we see evolution not a die situation.

Manseeb Khan: So, you are based out in China. So, could you just talk about a little bit more of we hear about in the news about the Chinese developments, Chinese regulations. I guess what that really means for North America.

Juwan Lee: Sure. So, I'm based in Hong Kong but just a stone's throw away from China recently. I was planning a trip to China and that same very day was the announcement that was made that all up crypto events were banned. Now you can imagine that if this happened in North America. The execution of that will be very difficult. But in China they were able to execute it very quickly. What does this mean. I believe that the prices of cryptocurrency coming down. I believe that just the amount of fraud and scams that put a lot of alert to China in terms of putting a stop to a lot of this.

Juwan Lee: But also, there's a dynamic to China that is very different than say in North America which is capital outflow. They want to control capital outflow, crypto currency something that they cannot control. This is something that's very important to them. What does this mean for North America. I believe in the very near future we'll start to see really more thought process and comments made about what can and cannot be done in the cryptos space and over the next that's you know one year or so we'll start to see a lot more what I call firmer a firm regulations that are at least self-regulating bodies creating guidelines that are much easier to follow for what is the best practices for cryptocurrency.

Manseeb Khan: No, I totally agree with you the execution of banning all crypto events in North America that just pulling that off in and of itself would be. Wow. I’d be very much impressive being.

Juwan Lee:  Well I mean that happened. Literally almost overnight. So, you can imagine the level of execution the government literally sent out a notice to all the hotels and public places where you can have events and it was done very quickly.

Manseeb Khan: I assume the crypto events managers was not too happy about that.

Juwan Lee: Well it's a bit like prohibition right. I mean people are still doing it and they're doing it in other venues and all of these activities that are being banned only provide you know other creative ways of finding out how to meet. And because you cannot stop the movement of crypto. you can just put roadblocks in place and oftentimes that creates more of demand than actual squashing of it.

Manseeb Khan: Right so they're just adding fuel to the flame that has crypto right? like they're just going to find new different ventures and opportunities to grow and expand because this is a never like a snowball. You can't really stop.

Juwan Lee: It's definitely a snowball.

Manseeb Khan: Do you see I guess China coming back probably in the future?

Juwan Lee: Well I think it's important to know that China is very pro block chain and the technology they promote that. is just crypto currency they're trying to control and ICO your market right. So, this is very important delineation. So, if you see the activity and the development of block chain and looking GitHub Shanghai and Beijing isn't the top you know four or five in the world in terms of the actual development. So that part has never slowed down in terms of their evolution and what they want to do with regulation. It was a surprise to many that he got even more strict and oftentimes before anything changes you you'll see a lot more stricter regulation until they figure out what they want to do. at this point. I don't have a real opinion about what the next steps will be. I am a firm believer that you know several years from now we will be able to coexist in China out with cryptocurrency and block chain.

Manseeb Khan : What institutional or hedge fund interest is there, and we do like kind of roping back to what I asked before right. And if there is any truly moving the needle right what is needed to ramp up interest or just are there any couple of examples that you can come up with. Are there any current players that you're kind of keeping an eye on or do you see any up and coming game changers in the space?

Juwan Lee: Well institutions are getting involved. But for them to get more involved you really need proper investment strategies that can scale. I already highlighted how small this space is in terms of overall size. proper risk management and also the volatility is way too high. So there's not much liquidity there's not the proper back office operation but I think what I think the single most important reason why more institutions have not gotten involved in the crypto space and investing in crypto funds is due to the problems of custody, the security behind it, the institutionalization right now is an experiment that most of the crypto funds are conducting. And you know large institutions cannot deploy assets into an asset class where they don't feel comfortable where the money is being held in terms of the number of players that are coming into the market. I think that this is an industry ripe for to I guess traditional managers to come in. One is the hedge fund managers have already started to come in and there some of the larger players that are in the market some of the former hedge fund managers and wealthy VCs coming in in the form of either setting up their own fund or carving out a piece from their own portfolio some of the more prominent names. I think if you look at the some of the largest crypto funds you see Pantera, Dan Morehead the CEO is a former Tiger Management hedge fund alum. And you know we've seen other hedge fund managers like Michael Novogratz from Galaxy. So, this is really a space that combines a couple of skills one skill is the ability to trade and understand the macro environment what's happening in the crypto space and the other one is finding early stage ideas whether venture capital have an advantage. So, if you have both of those backgrounds I see a lot of those kind of managers coming into this space in the future.

Manseeb Khan : What would be your golden nuggets for either up and coming crypto and blockchain companies. something that it could be something that  you got when you started on your early to the Silicon Valley and brought it over to Hong Kong . I guess what is your golden nugget that stood the test of time.

Juwan Lee: Well I think most importantly when we look at projects and we look at the execution and the actual outcome of what they become the most important thing is not the product is actually the timing of the product and also the management team. These are the things that are important. We all know that the beginning of a product and where eventually ends up will be vastly different. So, a management team has to be able to be flexible and execute according to the changes that take place. I believe that you know what we're seeing is a much higher-level management team coming in the ICO market and I also see that happening in the fund space as well. So, it's very promising.

Manseeb Khan : Yes, very excited to see the new movers and shakers the space and kind of see where it's what's going to happen in the next 18 to 24 months. Juwan, thank you so much for sitting down with me today. I know you have a crazy hectic schedule being one of the forerunners in the blockchain community. so, thanks so much for sitting down today. I had an incredible time and I am very excited to have you again.

Juwan Lee: Thank you very much and I love to come back again.

End of Podcast

Interested in getting involved as a partner or participant? info@ncfacanada.org

The National Crowdfunding & Fintech Association of Canada (NCFA Canada) is a cross-Canada non-profit actively engaged with fintech, alternative finance, blockchain, cryptocurrency, crowdfunding and online investing stakeholders globally. NCFA Canada provides education, research, industry stewardship, services, and networking opportunities to thousands of members and subscribers and works closely with industry, government, academia, community and eco-system partners and affiliates to create a strong and vibrant crowdfunding and fintech industry. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: ncfacanada.org

CEO Views on AI in Deals Amid Economic Shifts

September 22, 2023

AI | Sep 22, 2023 The world of deal-making is undergoing a significant transformation, driven by technological advancements and shifting economic landscapes. A CEO's Perspective on the Economy The July 2023 EY CEO Outlook survey reveals that US CEOs are gearing up for what might be termed a "new normal" characterized by expensive capital and heightened volatility. A striking 97% of US CEOs are preparing for a potential economic downturn in their primary market. This cautious approach is not unfounded. The US, while showing signs of a possible "soft landing" due to factors like labor market resilience and moderating inflation, still presents uncertainties. CEOs are not banking on best-case scenarios but are instead fortifying their organizations for sustainable growth. AI in Deal-Making - A Game Changer AI's role in this evolving landscape is undeniable. A significant 80% of US CEOs have either already integrated AI into their products and services or plan to do so within the next year. However, the application and benefits of AI vary. See:  Birth of the First AI-Generated Memecoin, AstroPepeX (APX) AI and ML have the potential to revolutionize the merger and acquisition process. They can make the due diligence process more efficient by analyzing ...

Read More

How to Safely and Securely Store Your Digital Files

September 22, 2023

Sep 22, 2023 Gone are the days when you’d need huge filing cabinets and boxes of paperwork. These days, most people store documents and files through digital means, either saving them directly onto their device, using external storage or uploading them to the cloud. This is much easier and saves costs on paper, but is it safe? While storing files on your computer is certainly easier, there are data security issues to consider. Not only that but having only digital copies of your documents could mean you run into issues if you ever lose your device or your storage becomes corrupted. However, there are ways you can safely store them and not have to worry. Backing Up Data One of the most important things you can do to ensure your digital files are safe is to back them up regularly. Whether you save all your files to the cloud, your device or an external storage unit, you should always back them up with at least one other copy in another location. This way, you prevent loss of data due to memory issues, lost devices or other problems. If you do run into issues with memory, it’s not necessarily the end ...

Read More

Birth of the First AI-Generated Memecoin, AstroPepeX (APX)

September 22, 2023

Crypto | Sep 22, 2023 The cryptocurrency landscape is no stranger to innovation, and the latest entrant is a testament to that.  The birth of AstroPepeX (APX). An anonymous Ethereum developer has recently unveiled a unique approach to creating digital tokens: using artificial intelligence. The developer, known by the Twitter handle @CroissantEth, has combined OpenAI’s ChatGPT API with a custom script, enabling the chatbot to autonomously create an ERC-20 tokenthat's rapidly gaining traction across various DeFi and centralized exchanges. The developer's AI tool doesn't just create any token; it crafts an ERC-20 token using Open Zeppelin standards. Open Zeppelin is a renowned open-source framework for constructing secure smart contracts. These contracts are written in Solidity, Ethereum's programming language. The AI determines the token's name and other parameters based on values provided by GPT in the code's constructor.  The first public token launched using this tool is AstroPepeX (APX). See:  Fund Tokenization: Fractional Issuance, Streamlined Redemption, and Servicing Benefits Launched on September 20, 2023, APX has seen an impressive ascent.  Impressively, within just 24 hours of its introduction, AstroPepeX accumulated a staggering $12.9 million in trading volume. The token's name wasn't arbitrarily chosen. ChatGPT generates names based on real data from ...

Read More

Creative Tips To Master Your Sales Pipeline

September 22, 2023

Sep 22, 2023 Mastering your sales pipeline is much like conducting an orchestra; it requires harmony, precision, and creativity. A well-managed sales pipeline can be the difference between surpassing your sales targets or falling short. While there are many traditional methods to manage and optimize a sales pipeline, sometimes it takes a sprinkle of creativity to truly make it sing. In this article, we will take you on a journey to explore some unique and creative tips to master your sales pipeline, ensuring you hit the right notes every time. You can also consider the SEO services India to optimize your sales. Here are some tips to master your sales pipeline. Identify your best leads first: The first step in mastering your sales pipeline is to identify which leads are most likely to convert into customers. Utilize data from your previous campaigns and track customer behavior metrics like open and click rates on your emails or website visits to understand better where the best opportunities lie. Another way to identify the best leads is to use predictive analytics. Predictive analytics helps you understand which customer segments are most likely to turn into profitable customers, allowing you to prioritize and focus ...

Read More

The UK’s PRA Commitment to International Competitiveness and Growth

September 21, 2023

Regulatory Insights | Sep 21, 2023 A recent speech by Victoria Saporta at the Bank of England conference sheds light on the Prudential Regulation Authority's (PRA) vision and its commitment to bolstering the UK's position as a global financial hub focusing on international competitiveness and growth. Victoria Saporta, Executive Director, Prudential Policy highlighted the PRA's new secondary objective, which emphasizes facilitating the UK economy's international competitiveness and growth over the medium to long term. This objective aligns with international standards, ensuring that the UK remains a key player on the global stage. The PRA's approach to this objective isn't entirely new. They initiated a conversation about a year ago with a Discussion Paper that outlined their policy approach. Saporta's speech in February further solidified the PRA's stance, proposing regulatory foundations that would guide their approach. Three Pillars of Competitiveness and Growth See:  Canada’s Competition Problem: 7 Reasons Saporta outlined three main foundations that the PRA believes are crucial for harnessing the UK’s strengths: Trust: A strong emphasis on maintaining trust in the PRA and the UK's prudential framework. Effective Processes: The need for streamlined regulatory processes and proactive engagement. Responsiveness: A commitment to addressing UK-specific risks and opportunities head-on. A ...

Read More

Solid World, KlimaDAO, and SCB Group Unite for a Sustainable Future

September 21, 2023

Carbon Markets | Sep 21, 2023 Solid World, KlimaDAO, and SCB Group announce partnership to deploy prepaid carbon liquidity using blockchain technology, enhancing efficiency and transparency in the carbon market. With global climate challenges on the rise, there's a pressing demand for clear, efficient, and adaptable carbon market strategies. The new alliance between KlimaDAO, SCB Group, and Solid World highlights the next phase in carbon market dynamics, shedding light on the potential impact and direction of this collaboration. KlimaDAO is at the forefront of blockchain-based carbon credit solutions, dedicated to fostering a sustainable future. With a vision to revolutionize the carbon market, KlimaDAO provides cutting-edge market infrastructure, ensuring transparency and efficiency in carbon trading. Solid World (an NCFA Industry Partner) offers innovative infrastructure solutions pioneering the next generation of carbon market platforms. Solid World's infrastructure stands out for its ability to create a liquid market for prepaid carbon credits that are yet to be issued. This is a game-changer for the Voluntary Carbon Markets, offering predictability of funding and reducing payback times for project developers. The introduction of the CRISP framework further augments the confidence in such projects.  The new prepaid credit pool has launched with 54,050 tonnes of carbon and ...

Read More

Cost-Benefit Analysis of Temporary vs. Permanent Storage

September 21, 2023

Sep 21, 2023 When it comes to warehousing solutions, businesses often stand at a crossroads, wondering whether to invest in fancy permanent storage facilities or go for those temporary warehouse buildings. This decision can really shake up a company's piggy bank and its overall way of doing things. So, let's dive into the cost-benefit stuff of temporary vs. permanent storage solutions, and we'll throw in some interactive and engaging examples to keep things interesting. The Lowdown Storing goods is a big deal for lots of industries, from selling stuff to making stuff to clicking stuff online. Warehouses, those big storage places, they're like the backbone of making sure things stay organized. When you're deciding between temporary and permanent storage, you've got to think about a bunch of things. Let’s check the basics about each storage solution. Temporary Warehouses Before we get all serious about costs, let's talk about temporary warehouse buildings, also known as portable or semi-permanent structures. They have gained popularity for their flexibility and cost-efficiency. These structures are typically made of durable materials like steel or aluminum and can be erected quickly without the need for a concrete foundation. This makes them an ideal choice for businesses looking ...

Read More

Bank Consortium to Launch “Paze” to Challenge Big Tech’s Fintech Dominance

September 20, 2023

Mobile Wallet | Sep 20, 2023 Major American banks like JPMorgan Chase, Bank of America, and Wells Fargo are gearing up to launch "Paze", a mobile wallet that will connect directly to the credit and debit card accounts of 150 million customers. The rise of mobile wallets and digital payment solutions by tech companies has been meteoric. Apple Pay, for instance, has seen its user base grow from 60 million to over 500 million in just five years. Such numbers are not just impressive; they're a clarion call for banks to innovate or risk being sidelined. See:  Bank CEOs Defend P2P Payments Network Zelle in Senate Hearing Over Consumer Fraud Handling As banks are increasingly leaning towards partnerships with fintechs, there are rising concerns from regulators. They are wary of the potential risks these collaborations might introduce, especially in terms of customer data and security. Paze - Collaboration Over Competition Paze is not just another mobile wallet. It's a strategic initiative by giants such as JPMorgan Chase, Bank of America, and Wells Fargo. Designed to connect directly to the credit and debit card accounts of a whopping 150 million customers, Paze aims to be the go-to mobile wallet for the ...

Read More

Swift and Wise Announce Strategic Collaboration at Sibos 2023 in Toronto

September 20, 2023

Payments | Sep 20, 2023 At the 2023 Sibos conference held in Toronto, Swift and Wise announced a strategic partnership aiming to enhance the global cross-border payment options available to financial institutions and their end customers. Enhanced Cross-Border Payments The partnership will allow financial institutions to route Swift payment messages directly to the Wise platform via Wise's Correspondent Services Solution. This integration ensures that Swift customers can leverage the benefits of Wise without undergoing major system overhauls. Wise will utilize Swift's advanced features, including cloud and API connectivity and Payment Pre-validation. The hallmark features of Swift GPI, such as the payment status tracker, will be updated by the Wise Platform to ensure a comprehensive end-to-end view across both networks. See:  Swift’s Blockchain Breakthrough Boosts Global Tokenization Steve Naudé, Managing Director of Wise Platform: We know that banks face a number of challenges when it comes to enhancing their international payments, including that this often requires them to embed technology which is incompatible with legacy infrastructure. By simultaneously leveraging existing payments architecture and optimising payouts using Wise's global network, we are empowering banks to innovate effortlessly. Our network, combined with Swift’s extensive reach and trackability, will make international payments more convenient, ...

Read More

Bitbuy and Localcoin Partner Boosting Crypto Access in Canada

September 20, 2023

Crypto | Sep 20, 2023 Bitbuy, a subsidiary of WonderFi Technologies Inc., has announced a strategic partnership with Localcoin, Canada's largest Bitcoin ATM provider. This collaboration aims to enhance cryptocurrency adoption and accessibility across Canada. Expanding Access to Crypto Localcoin, established in 2017, has been a pioneer in the cryptocurrency ATM sector in Canada. With 920 ATMs, it captures 33% of the cryptocurrency ATM market share in the country.  Localcoin chose Bitbuy for its scale, commitment to the Canadian market, and robust regulatory positioning. Bitbuy's digital asset services will soon power nearly 50% of Canada's Bitcoin ATMs. This is a testament to the scale and reach of the partnership. See:  Bitbuy to Offer Stock Trading to Its Users Bitbuy is on track to surpass 900,000 registered Canadian users by the end of the month, making it one of the country's largest crypto-trading platforms. The platform caters to a diverse user base, including retail and advanced traders, high-net-worth individuals, and institutional clients. This partnership solidifies both companies' positions as leaders in the Canadian cryptocurrency space. This collaboration ensures that Canadians have more touchpoints to access cryptocurrencies, making it easier for both novices and experts to buy or sell digital assets. Improving ...

Read More