Sazmining Podcast Episode 29: Andrei Poliakov on the Important Risks of Interest Bearing Accounts


On this episode of The Sazmining Podcast, Will speaks with Andrei Poliakov, CEO and Co-Founder of Coinberry. They discuss how to work with regulatory bodies in crypto, interest bearing accounts in this space, and more.

Will Szamosszegi (00:28):

Andre, Thank you so much for taking the time to come onto the podcast today, uh, before getting into it. If you're out there and you're listening to this episode right now, uh, and you like this video, subscribe to the channel and leave a quick comment. We're actually going to be giving away a ticket to Bitcoin 2022 in April next year. So remember to like comment and subscribe to this channel, to be entered in, to win that ticket. It's currently going for over a thousand dollars, but I'm sure that the price is gonna go up by the time the conference starts. Uh, and back to you, Andre, what you are doing with coin bay is really remarkable. I'm really excited to hear more about the project, your journey up until now, and then really digging into what you're seeing on the front lines and really sharing what's going on with everyone who's listening. So the floor is yours.

Andrei Poliakov (01:20):

Awesome. Well, thanks. Um, this is funny, you mentioned Bitcoin 2022, cuz uh, I was in Miami for the Bitcoin 2021, um, in, in, in the spring and, uh, it was quite vibrant. It was quite a good, uh, it was good vibe, lots of people. Uh, the speakers were really good, so I'm not affiliated with them at all, but it was really cool bond for, so I'm gonna give up some, uh, some PR some free PR <laugh> alongside you.

Will Szamosszegi (01:43):

Well, well, we're gonna have to link up while, while you're down there, you gotta make sure you make it out there for Bitcoin 20, 22.

Andrei Poliakov (01:49):

It's funny because you know, consensus back in, um, back in, uh, the one that next place in York, the consensus conference, uh, that was massive. I remember 2018. That was a massive conference. And I remember 20 19, 20 20 kind of got off a little bit, but it seems that Bitcoin, you know, Bitcoin, the Bitcoin conference is actually picking up. So it's good to see that's all, but, but thanks for having on the show. So do you want me to just kind of, uh, go through the Coinbase story or do you want, do you have any other questions you wanna ask me or just start

Will Szamosszegi (02:14):

Around with? Uh, well, what I'd I'd really be curious to hear about is how Berry started and then how you really went and I'd, it sounds like coin barrier is a very good relationship with the, with the regulators. You guys are doing things by the book. And I mean, I'm personally also just very cured what that whole process was like, how you went about doing it. Uh, because I think that for crypto to really become adopted and go mainstream, there is a line that you have to tow in terms of making sure that you're keeping the regulators informed. You're doing everything in a compliant way and making sure that you can serve the users, uh, in the best way possible. So really curious to hear your story, how Berry has grown up until now and how you navigated at that landscape.

Andrei Poliakov (02:59):

All right. Awesome. Awesome. So, I mean, I'll start off by, um, uh, sort of explaining what Coinbase is and Coinbase is at the current time. Um, one of the biggest crypto trading platforms in Canada market be the most, you know, the safest and more secure in Canada, providing, providing a, an opportunity for Canadians to have safe, secure, and convenient exposure to about 18 points that we're currently offer, including, you know, the main staples such as Bitcoin and theory and Bitcoin cash and likely. So when we started the company, so I I'm, I'm one of the co-founder of, I am the CEO of when we started the project back in mid 2017, the, the space was a little bit different than it is now. And, and you have to actually rewind back even further as to how did the kind of the concept and idea from coin rate come about.

Andrei Poliakov (03:42):

Uh, and that takes us to, um, really early 2017. And so this is the, this is the story of how that sort of my, um, my foray into, into crypto and earnest began because I had heard about Bitcoin sort of, um, you know, several years earlier, just that events and parties, people's people started talking about it, but it was super on the ground back then. And, and I just, I found, I found the concept fascinating, but I didn't do much with it back in, like, let's say 2015, and then fast forward, early 2017, um, myself and my business partner, um, Evan, um, we were down in Miami for, for a bachelor party. Uh, so we had some friends who, um, were us based and we had a bunch of us that came down from Canada. And, um, and on the last day it was like a three or four day trip on the last day of the trip.

Andrei Poliakov (04:25):

Um, we were on the beach and we had to settle debts to each other. Um, and believe it or not, it's actually very difficult to transfer money as a Canadian to an American, unless you do it through a wire or you do it through cash. Um, but there's no like there's no Venmo that goes across both, um, countries. And like we have E transfers in Canada that, that doesn't exist in the us. So, um, so you can't etransfer. And so basically we had a choice of either going to an ATM machine and trying to find ATM machine to get cash and just settle that way. Or, and Evan had this idea of all of us just buying Bitcoin, um, and settling in Bitcoin. So we spend the afternoon, you know, signing up for coin base accounts and, um, and, and, and, you know, buying the Bitcoin and selling our debts that way, which in hindsight was probably the worst decision of my life.

Andrei Poliakov (05:09):

<laugh> I should just kept onto that Bitcoin, uh, but you know, it is what it is. Um, but in that moment, I had a really interesting sort of epiphany and aha moment where I thought this is really interesting. So, you know, we're just a bunch of regular guys on a beach. Um, and we found this unique, or maybe not so unique, but this very, um, uh, basic use case for Bitcoin specifically, and for blockchain, which is cross border remittance, right? I mean, that's what we did in essence. And I had been previously involved in, um, in a business, which, which, which had a lot of international shipment, um, as part of its business model. So there was a lot of, um, payment of goods cross border. And if anybody's been in that sort of, uh, cross national shipment industry, they know that, um, you know, when you have a container, um, at customs and you're waiting for customs to clear, and you're waiting for wire to land for the customs to clear, and it's a long weekend and you have that container stuck at customs for four days, the, like the, the actual, just warehousing fees are quite expansive.

Andrei Poliakov (06:08):

And so I thought, and I mean, this is a site sort of context besides story, but in that moment, in my, I thought to himself, this is really interesting because, you know, we are just a bunch of regular guys who found a use case, but my God, what's gonna happen when you have big industry really realize the potential of the application of blockchain to the financial markets and financial instruments, right. And the application of blockchain and crypto to cross border settlement, right. Of instantaneous settlement of, of goods and services and, and payments. And, um, and that's when I really thought to myself, there is really something here that is gonna be massive. And, um, you know, may not happen overnight. It may not happen over a year, but eventually it will happen. And when it does, like this is going to change the way that as a society, we really interact with one another, um, from a financial perspective.

Andrei Poliakov (06:57):

So anyway, we came back to Canada, well, I came back to Canada. Um, I had a corporate job, so I went back to my corporate job. Um, and then a couple months later, my, my friend and also my, my business partner, co-founder Evan calls me up and he says, Hey, we, we have this idea to start a crypto business. And back then in Toronto in, and this was around, uh, like may, June, um, 2017 back then Toronto was like a bustling hub of just energy. As it pertained to crypto, you had a whole bunch of projects. You had meetups taking place, you had people just congregate and, and just talk sort of crypto project, the ICO CRA was going on. And one of those spots in the city where people would congregate was actually Evans condo. So at any point in time was, it was an awesome atmosphere, cuz at any point in time, you'd walk in there and you'd have like 15, 20 people just, you know, somebody's in the, in one of the bedrooms, they set up with trading desks, somebody's trading there, you know, you got people in the kitchen like talking crypto projects, you had people in the living room just discussing ICOs.

Andrei Poliakov (07:54):

And, and it was really, it was almost like Bohemian and Inia because it was so fluid, people would just come and go. And um, and so that's like one of those sessions is where the idea of coin Maria was born. And that idea was to create a platform and to create a, a service which allowed, um, Canadians simple and intuitive way to buy and get exposure to crypto. Something that even our grandparents could use, because back then it was very, very hard to actually get into the space. You'd either have to meet somebody at a coffee shop, um, you know, and pay them cash to, to get, uh, you know, to buy Bitcoin or you'd have to wait, you know, you have to wait for ages to onboarding a platform and, and it just, it wasn't, it was hard to fund those platforms. It was just, you know, it was super expensive.

Andrei Poliakov (08:36):

It was just not conducive to mass adoption at all. It was a very fringe kind of industry, so to speak and the services were quite fringe. So we saw a market opportunity. We saw an opportunity to build a business, which sort of did things properly, which catered to the simplicity and the need for simplicity and intuitive sort of interface and service for people to really not necessarily understand the underlying technology of how things work, but be able to have exposure to the, to the asset class itself. So I ended up quitting my corporate job and just, uh, you know, one of those, uh, went all in on a startup, uh, that was bootstrapped, um, put a little bit of our own money in, um, you know, moving into a DKE little office, um, worked out of that office for about half a year, then got our first, uh, sort of angel money, couple hundred thousand dollars.

Andrei Poliakov (09:20):

And that allowed us to move into a nicer office. And then we started, you know, growing the team, but we always had that vision to be very, very strictly aligned with, with the regulation that existed at the time. Um, we were one of the first crypto platforms to actually, uh, become registered with FINRA, which, um, for your, um, us audience, uh, is equivalent of Sen in Canada. So we were one of the first platforms to, to register with FINRA and back. So this was in, in like late in the 2017 and then early 2018, we actually approached the interior securities commission. And at first it was a very preliminary discussion. It was just like, Hey, um, you know, we, here we are, we're this new company. Um, we have a, a really unique way of approaching this industry. You know, a lot of people that just did things by this sort of the CEO of their pants. And, um, and we decided to do things very systematically, you know, the focus and pauses procedures controls. Um, and, uh, and so here we are, and we wanna have a chat about how we can potentially, you know, register with you in the future because we had the foresight to, to realize that the industry is going to get regulated at the end of the day, um, to, to some extent or another. And so we, we kind of just front ran that, and this was three years ago,

Will Szamosszegi (10:29):

Actually real quick to jump in there. Um, could you talk a little bit about, um, well maybe break it down the parallels between fin send and, uh, as a fin track in Canada and talk about really what that regulatory bodies' purpose is, what they do and what you guys need to do in working with them, just to dig into a little bit more of those details.

Andrei Poliakov (10:49):

Yeah. So FINRA is, um, the financial transactions and reports analysis center of Canada. Like the parallel to draw is there like the Canadian equivalent of Fen. So they monitor the movement of money in Canada and they make sure that, uh, money isn't being laundered, they make sure that, um, you know, the, the proper, the companies that are registered with them have the proper KYC, so know your client and anti-money laundering controls in place. And, um, and so registering with Ventra, uh, required us to, uh, make sure that we are able to identify the users in our platform. We're able to KYC them to make sure that there's no, um, there's no money laundering that takes place in our platform. And it also allowed us to get our banking. So it, it, it was a, it was a sort of a prerequisite back back 2017 to actually we get any sort of banking in Canada.

Andrei Poliakov (11:40):

And so the way it works is so we have fin track, right. Um, which is more pertaining to money service businesses in the movement of fun of, of cash or movement of money. And then in Canada, we have like, so in the states, there's the, the, there's the sec, right? Which is a federal body. And in Canada, we, we don't have a federal body that governs the securities industry. What we have is commissions that exist in each province territory. So for example, um, Coinbase is based in Toronto, uh, which is in the province of Ontario. So we have the Ontario securities commission, which governs all the securities, um, businesses in Ontario. And so each province has their own commission. And then all the provinces come together into what's known as the Canadian securities administrators, which is not a federal body. It's more like a round table sort of, um, organization where each, uh, each of the provinces has, uh, an ability to, uh, showcase and, and discuss with everybody, with all the other provinces, you know, bring projects like point forth, uh, to, to, um, to get registered.

Andrei Poliakov (12:41):

But we don't have a federal sort of securities overseer in Canada. So that's the difference between between the us and Canada. So when, you know, in 2018, when we approached, um, the Ontario securities commission, um, our goal was to, to register with, uh, you know, with them as, as our primary regulator. But ultimately of course, we were looking to get registered across all the provinces and all the territories. Um, so that journey with them took, took a, took a while. It took about three years. And, um, it, uh, you know, it started with just, uh, just high level discussions. Then there, it, it sort of advanced to site visits. They, they visited our office a number of times we walked them through all of our, again, like our controls, our policies, our procedures, all the insurances we have in place, how we custody funds to make sure that, uh, they got to a place where they were comfortable with, with us as a business model.

Andrei Poliakov (13:30):

You know, they did the, the background on, on myself and all the staff. So there was a lot of, um, due diligence that was done to make, to, to get them to a comfortable point with the company. And, and to also make sure that we were, you know, we were sticking around for, uh, like we're not a, you know, an overnight sort of, uh, company that's, that's gonna fold here today, not, you know, gone tomorrow. And so in late 2020, um, we actually submitted our sort of official application because everything prior to that was just sort of discussions. So the way it works is they, once we officially submitted, they brought us forth in front of the CSA, in front of the Canadian securities administrators, where we presented. And again, talked about the coin various sort of vision, the model. And again, walked all of the provincial regulators through our, uh, you know, again, all the policies, procedures, and controls and insurances, the custody that we have in place and got all of them comfortable with, with what we were, you know, what we were aiming to do.

Andrei Poliakov (14:27):

And ultimately at any point in time, um, you know, any of the provinces could have opted out and said, no, we don't want Coinbase registered in our particular province. Now we were very happy to say that, um, you know, we re did receive registration, uh, across all the provinces and territories in Canada, which was, you know, phenomenal, but that process in and itself, like I presented in January and we only got registered in, in August. So, you know, that took another eight months of just again, answering questions and questions and questions and making sure that everybody was comfortable with, with the business. And then in late August, we became the first sort of pure play crypto company born off the industry, like, you know, true startup to actually receive our registration with Ontario securities commission. And, and exactly we leave across the entire, the entire country. And we were the first to actually allow our users to both fund with, um, Canadian dollars and crypto, but also withdraw Canadian dollars and crypto from platform to get registered as well. So, uh, it was a phenomenal, um, you know, success for us to get to that point. And we were, you know, extremely happy to have finally after three years, um, you know, achieved that goal.

Will Szamosszegi (15:32):

Yeah. I mean, it sounds like, uh, a lot, a lot of work to, to actually be able to go and offer what you guys are working on. And so where you guys are today, you've gone through that whole process. You've had a close relationship speaking with these different regulators. You've raised some additional angel capital to bring you guys to go through to where you are today. So what are really the big next steps that you see for the company and, um, and as well as more, uh, broadly speaking than just the company, uh, that crypto industry within Canada, um, and then following off of that, we can dive into how Canada's different than some of the other countries out there.

Andrei Poliakov (16:13):

Yeah. Um, I mean, look, we, we, we have, you know, whole process of becoming regulated and, and registered, um, at its core, has the invested interest in mind, right? Everything that we put in place. Again, I talk about the policies and procedures and all the controls and all the insurances and the custody is all done, such that 1, 1, 1, an individual invests in coin. They know that their assets are safe. They know their assets are secure. Um, and they know that, you know, there's a regulator overseeing, um, how the company ultimately functions and operates to make sure that investor assets are safe and secure. So I wanna make sure that, you know, it's like the reason why we went through the regulated process for the registration process, um, is because at its core that, you know, at its very sort of essence, that is exactly what we want to achieve.

Andrei Poliakov (17:02):

We want to achieve safety and security for our, for our clients and our users. Right. And again, and, and to, and to sort of balance that with, uh, the convenience of using a platform, which is, you know, we're available on the web, on the, you know, on apple, on Android and, and ultimately to balance those two, right? Because, and this is gonna be sort of, uh, uh, my lead into your second part of your question, because ultimately with regulatory oversight, with safety and security, you will eventually get massive adoption. You will not get massive adoption without having safety, security, convenience, and regulatory oversight in an industry such as ours. I, I strongly believe that you will always have individuals that are, you know, that like to push the boundary. You're gonna have users that are early adopted. You're gonna have, um, you know, early innovators that are, that are going to always, you know, be creating new, new, new technologies are gonna be very open to experiencing and new technologies and, and new products themselves.

Andrei Poliakov (17:54):

But when it comes to the masses, people need safety, people need security and people need convenience. What I believe is going to happen in this industry in Canada going forward is ultimately we are going to see, you know, enforcement from regulators continuum, and we're already have Ontario securities commission, the store enforcement actions on, on certain international crypto exchanges that were operating in Canada, you know, without being registered, we've seen C you know, we've seen finance leave the Ontario market, uh, Q coin left Ontario market as well because, uh, because of the enforcement actions that, uh, the OSC had commenced. Um, and, and so ultimately I think that's, and, and in the long term, I think that's the benefit of Canadian investors and Canadian residents, because you do want platforms that have a, a certain level of controls and policies and procedures in place. Um, and if you don't, these platforms are here today and not here tomorrow, that's what's gonna happen no matter how big they're, we've had some massive exchanges that have been, um, you know, have been hacked that have gone on there in, in Canada and internationally, you know, we had, we had some pretty bad experiences in the Canadian, um, crypto space with, you know, some exchanges that folded and, you know, made a pretty bad name, um, for sort of, for the industry.

Andrei Poliakov (19:04):

So I think it's very important for us to turn that page and I'm happy to, to see other platforms, you know, get registered in Canada as well. And ultimately, I think what that's going to result in is a consolidation in, in an industry in Canada, you are going to have smaller players that is simply not going to be able to get to that level of, uh, operational, um, sort of a maturity that they need to be at in order to continue operating it, to be registered. And, and you're gonna see a roll open, and you're gonna see consolidation, uh, you know, companies such as cornbread and others that are at that level are going to slowly amalgamate, uh, and, um, you know, acquire the smaller players. And you're gonna see, uh, you know, a handful of, of, of more sort of mature companies remain. But I think it's very good because with platforms that are regulated with mature platforms that are available, you're gonna see more, um, institutional interest as well, because there's a lot of institutional interests that's currently sitting on the sidelines that's, uh, you know, that they have mandates to only operate with, or work or invest through, uh, you know, regulated and register platforms.

Andrei Poliakov (20:05):

And until, until recently they haven't had an opportunity to do that. So, you know, with a coin with company such as coin breed, that's now able to offer, uh, you know, a registered platform that's safe and secure for institution investors. Uh, I think you'll have more of that interest as well.

Will Szamosszegi (20:18):

Yeah. And that actually brings up an interesting question of what happens to all of those users out there who are operating or have funds on these different exchanges that might not have gone. And, um, going through the, the different processes of being, um, getting the approvals, being as regulated as a company like Berry, like how does that progress? Cause, I mean, I'm sure that some of the listeners out there, uh, could be located in Canada and might be customers or holding their funds on these different exchanges. I mean, do you have any sense of what might happen as, uh, as the industry progresses within Canada and how those people who are holding funds and doing trading currently in this industry in Canada, how it affects them?

Andrei Poliakov (21:02):

Well, you know, I'll, I'll give you my personal experience. Um, you know, tho those, there's a lot of, uh, platforms in the news right now, especially in the us that are being hit with, um, you know, various levels of enforcement action by various, um, uh, state agencies. Um, you know, I think Celsius was recently hit, you know, block why I think as well. And ultimately I can tell you that having gone through this process, I personally only trust platforms that are registered now, like I've, I've taken my, my own crypto funds off of, you know, platforms that are not registered that offer, uh, services that are, that Coinbase doesn't offer because obviously, you know, coin trade with somebody else, uh, but you know, services that Coinbase doesn't offer and that I've been using, I've removed my own funds from platforms that are registered, because I know what goes into becoming registered.

Andrei Poliakov (21:50):

I know the level of maturity and the controls that have to be put in place in order to at obtain that status. And to me, if a company is not at that, not at that place in their sort of life cycle, there's a risk, right? And ultimately you're talking about risk. And that, that takes me back to what I was, um, originally talking about, which is invest the interest, everything that we do is to keep investor interest in mind. And so it, it, it becomes a question of how much risk are you willing to be exposed to? You know, we have massive platforms out there such as blind that just started getting hit with legal actions around the world. Um, and the question is, you know, are you willing to, as an individual, I mean, is there a way to bypass, um, you know, the IP and, you know, restricts us through VPN? Of course there is, of course there is, but at the end of the day, you're just exposing yourself to more risk trading with a platform which isn't registered, right. Which just, which hasn't, which hasn't gone through, the level of scrutiny that somebody like coin has, has gone through. And ultimately, I mean, you know, people have different risk appetites, so, you know, not for me to judge. Um, but as long as people are aware of the risks involved, I think at that point in time, they can take the decision they

Will Szamosszegi (22:53):

Wanna yeah. Act. I really want to hear your opinion on, on this question. It's been something that I've been thinking about more recently, especially as you brought up their, their actions being brought against certain companies where you can earn interest on your crypto things like block by Celsius, et cetera. And when you look at this, this happening, and you see investors who are going and trying to earn additional yield by leaving their crypto in an interest bearing account, and then you have some other investors such as Michael sailor, for example, who are not for those types of interest bearing accounts, and would much rather just keep the crypto secure, not be taken on, uh, additional interest earnings, but feels more comfortable with the protection of that crypto. What's your take on all of this? Cause I know that right now out there, there are a lot of people who are going and earning additional crypto from these interest bearing accounts, but simultaneously you see some of those companies being cracked down on by different regulators.

Will Szamosszegi (23:51):

I mean, what do you view as the risks in utilizing these interest bearing accounts? Are there any companies out there that you think have done the work that's needed to be able to trust them with interest bearing accounts? Uh, because that's something that I I'd be really interested in as well, always trying to go and earn additional yield, but really understanding where those risks lie. And if you are a customer that has your funds in one of these interest bearing accounts, what are you open to? What are worst case scenarios to very loaded, uh, multilayered question, but just hear, would love to hear you talk through all those different pieces.

Andrei Poliakov (24:28):

Yeah. Um, well, I mean, look, I think there's in terms of earning sort of creating passive wealth from your crypto, right. But you know, through some of those platforms that exist out there, um, that's centralized platform, right? So they have a lending book. They, they, they in essence lend out your crypto, they own interest from the individual. That's borrowing it. They take a bit, they share the rest with you. So there's, that's one way of doing it, right. The other way is doing it through staking. Right? So, I mean, staking is also a passive way to create, you know, wealth from your crypto. And to me personally, um, you know, staking obviously has its own pitfalls as well. Um, but as all things, blockchain based, um, I find taking to be a, a potentially, potentially a safer way to create passive wealth. And I'll explain why I have that position.

Andrei Poliakov (25:13):

Um, at the end of the day, when, when you lend your crypto through a centralized platform, um, they have a book, they have a lending book, they have forwarders. I mean, think if you think about it logically, the only way they can pay you an interest is if somebody pays them an interest for borrow your crypto, like there's no, there's no magical other way. Right? That's exactly how banks pay you interest on deposits on your account is they lend it out. Now putting forth banks as an example is probably the worst thing. Cause we've seen what happens with, you know, over cloud is, you know, debt. Um, but if you take that approach and you, and you, and you think about the centralized platforms in a crypto space that allow us, if there's no mechanism to verify, um, how much due diligence these platforms put into the borrowers of the, of the crypto that they're lending to, if there is no way to verify how collateralized those, those loans are, if there's no transparency in any of those things.

Andrei Poliakov (26:03):

And if there's no regulatory oversight, you really are putting your hands in the faith of the people that are actually running the centralized platforms. Um, and I know that's a rich thing for me to say, considering we just got registered, you know, two months ago. Um, but we are current registered. So I can say those things because we do have regularly over oversight now. And up to that point, yeah, it was the same thing. People were putting their, you know, their funds in vape into our systems, into our professionals into the way we run our business. But again, if you are lending your crypto out to a centralized platform that has no regulatory oversight that has no transparency about how they actually operate and, and manage their, their loan book. There's a risk in that. I, I mean the risk is that the, the there's gonna be a default on the, on the debt, right.

Andrei Poliakov (26:46):

And the risk is that somebody will not, their borrowers will not pay the crypto already. That's the most basic risk, uh, back, uh, under certain circumstances. So I think, you know, for me personally, I feel a lot safer for putting, you know, my crypto into, um, or locking it up, you know, and staking it. Then I do lending it through centralized platforms. I have a lot more faith. Let's put it into, into the blockchain technology and the code than I do in the people, uh, running any business whatsoever. I mean, it, it's, it's a very pessimistic outlook on things, but it is what it is. And I, I should be told now that I'm thinking out loud, out loud, you know, we've had failures, you know, in terms of the technology as well. I mean, we've had cases where, uh, you know, bugs have been found and exploited, there's no one answer that fits all right. There's a fool proof way of going about things. I think at the end of the day, it comes to personal preference and personal risk, uh, profile. But as I mentioned, after all those sort of, uh, enforcement action started taking place. And after, uh, I think there was a point where block FFI, uh, lost something like 10 million. I just said, oh my, I dunno about this until, until until that aspect of industry matures a little bit more, I'm just gonna, gonna keep everything in cold

Will Szamosszegi (27:56):

Wall. Yeah. And that's, that's a very good point. I mean, when you think about there's a staking aspect, there's a centralized aspect hearing you talk through it. It, it was interesting because it almost came back to the ethos of, of Bitcoin, just having the ability to have self sovereignty, the ability to really control and be your own bank. That phrase, not, not your keys, not your crypto. Um, it does in the end, give people crypto and Bitcoin and, uh, self custody. It really gives people the ability to be their own bank, uh, run their own node and take on whatever level of responsibility they want to take on. And it, it's interesting just seeing all the, the different options out there. I mean, you have regulated platforms, other platforms that might not be regulated. You have the ability to go and hold your own keys and your own crypto.

Will Szamosszegi (28:43):

You have the ability to go and stake hearing you talk about staking. Could you talk a little bit just to that in more depth for people out there who are listening, cuz staking is a term that's thrown around a lot and people, I think generally understand that it's a way to earn additional yield on your crypto or whatever digital assets you're holding, but when you actually go and put that into practice, what are some ways in which you've seen people go and earn additional yield through staking? Are there any particular platforms or protocols or I guess ways in which you've seen it done in the

Andrei Poliakov (29:17):

Past? I mean, look, there's a, there's a number of different projects out there, right? I mean, you know, starting with obviously the most popular one is, um, you know, staking for, you know, so, um, I, I don't wanna go on record and, and, you know, promote one platform, another one pause or another one block another, because again, ultimately, and to that point, none of the, you know, opinions shared on the, on this podcast, um, our investment advice, uh, they're just my personal opinions, but I, I don't wanna, I wanna avoid going on record and, and promoting any specific platform or any specific solution because just by virtue of there's a lot of projects that are, that are currently development, um, that are in different levels of maturity as well. And ultimately, um, I don't wanna say the wrong thing that have somebody, um, don't get wiped out.

Will Szamosszegi (29:57):

Yeah, no, completely fair. Completely fair. So changing gears a little bit to a broader outlook, we've been talking a lot about the Canada, about Canada and the United States, but in terms of how you see the space maturing on a global scale, you're witnessing right now, a funny sort of game theory, experiment playing out where countries are faced with the decision. Are you going to promote crypto within your borders? Are you going to sit on the sidelines? Are you going to actively deter the growth of this industry? And there's some countries out there that are trying to heavily promote it and then some others on the other end of the spectrum, like China, who really are against the growth of crypto, um, and even going as far as shutting down the mining industry, which was thriving within their borders. So from your perspective, when you're looking at it, how do you think that this all plays out? And if you could also give some sort of idea of the timeframes and how long certain things take to play out, be really interested to hear your perspective on that.

Andrei Poliakov (31:02):

Yeah. I mean, look, I think what's happening in, in China specifically is, um, you know, the Chinese government wants to, um, wants to continue to maintain a tide control over, um, you know, over their financial system and Bitcoin and crypto, um, currencies in general, right. They're decentralized. Then they provide path to financial freedom, right. And by definition, that's contrary to the centralization policies, um, of, of the Chinese go. Right? So I mean, you know, we've also seen China ban, you know, Facebook, Google, and Twitter. So, you know, Snapchat and, and all of, all of those projects and companies have gone on, you know, to great success and this news about China, banning Bitcoin that come out every year. Like if you go, I think it's like the sixth time they've, uh, they've banned Bitcoin. And it's fine because if you look at the, the effect of those news back, you know, five, six years ago, like it was massive.

Andrei Poliakov (31:53):

You'd see, like on, you'd see Bitcoin drop 30% on those news. Uh, what happened two weeks ago, you had Bitcoin dropped 5% and rebound at the same day. So I think people are getting a bit fat fatigued on the one hand, um, about, you know, those sort of news. On the other hand, I think it's important to know that, you know, back back about three years ago, something like 75% of all transactions with, with Bitcoin took place in China. Now I think we're down to 49. So you see a, uh, globalization of sorts of, of, of Bitcoin where there's a lot less dependency from Chinese minors and on, on the sort of the Chinese populace to sustain the, or, or to prop up or to push forward the, um, you know, Bitcoin specifically on the blockchain. And so you see that it has a lot less effect that's on the one hand, on the other hand, you have countries such as out Sal or that have, uh, you know, made Bitcoin legal tender.

Andrei Poliakov (32:40):

You have news out of Brazil recently as well that they're looking to legalize Bitcoin as legal tender, um, the similar news out of Ukraine. So you see a lot more countries that are, that are looking quite seriously at, you know, using Bitcoin as legal tender. And if you look, you know, if, kind of think about it 10 years ago, it would've been a completely unbelievable point to make that, you know, in 10 years and 2021, you're gonna see Bitcoin as legal tender. I mean, hell than three years ago, it would've been unbelievable to make that point. Um, and you know, back then people were saying, you know, no corporation is gonna hold Bitcoin on their balance sheet. And, and, and then, and then, you know, company started doing that. And, and now we have a, you know, now we are at this point where there's actually countries that have started utilizing Bitcoin as legal tender.

Andrei Poliakov (33:23):

So I think fundamentally there is different there's obviously each country's gonna take their own, you know, so, but I think we're at a point now where the technology and Bitcoin specifically have gone beyond the, so beyond being affected by any single country's decision. It's, it's a truly global technology now and a truly global phenomenal. So what I personally believe in is a balanced approach to regulatory oversight. Um, I think we need to have some regulatory oversight to protect investors and to protect the residents of the country that, you know, the regulator oversees, but on the hand it can be so much that it's stifles innovation at the end of the date, innovation comes from a place of creativity and comes from a place of breaking the rules and pushing the boundaries, right. Uh, that exist. And so there has to be room for innovation. Otherwise you'll never get to a point of, uh, of growth right. Of that nascent growth. Um, and so I think I, you know, my point of view is the regulators and Canada have taken part in balanced approach. And, uh, you know, and obviously, you know, I think certain, you know, regulators, not the country set have banned Bitcoin I think is completely nonsensical. And, uh, but you know, such as their such as their decision. And, uh, ultimately I guess time will tell, uh, whether it's the right or the wrong

Will Szamosszegi (34:32):

Decision. Great. Well, I got one more question, but before we ask it, are there certain areas that anyone who's listening can go and follow you online?

Andrei Poliakov (34:41):

Um, yeah, so, um, all our, um, social media handles are available on our website, which is, uh, That's C I N B E R R Uh, you can follow us there, uh, follow our blog. And, uh, we have a lot of really interesting material there. We have a lot of educational material as well. We believe in the, in, in, um, in educating and giving people, you know, the necessary information they need, uh, to learn about the space, to learn about the technology. And, uh, so we have a lot of really great educational stuff on our website. That's completely free of charging and accessible and available to, uh, to anybody.

Will Szamosszegi (35:17):

Perfect. Well, people should definitely go check that out. And, um, also quick reminder, if you haven't liked subscribed and commented on this video yet last reminder for this video, you could win an industry pass for Bitcoin 2022 and come and see Andre and I there. So, uh, last question for you, uh, what is one belief that you hold to be true that you think the majority of people would disagree with and that could be crypto related or doesn't have to be crypto related? It could be, could be anything.

Andrei Poliakov (35:48):

Oh man, that's a tough one. Um, yeah, I think, look, I believe that I hold true, that I think is not popular with the, with the general public, I think would be that the, the creation of value supersedes the creation of, of money, I think that's, or the creation of the acquisition of money. I think that's, uh, something that I hold true. Like if I had personally a choice between being involved in a project that creates value for humanity, um, that I knew it personally benefit me financially a lot less than, than something, you know, something more lucrative that had very little benefit. I would pick the, I think most people would probably wanna call my bluff on that, but let's that's

Will Szamosszegi (36:33):

Well, that's great. Thanks again for taking the time to come on. Uh, this has been a lot of fun and we'll have to link up in Miami for Bitcoin 2020.

Andrei Poliakov (36:39):

Absolutely. Absolutely. Looking forward to it. And thanks for having the show serious.

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