JD Durkin: Ian Weisberger joins me now, co-founder and CEO of CoinRoutes. Good to see you here today.
Ian Weisberger: Yeah, thanks for having me.
JD Durkin: A trading tech platform that helps big investors buy and sell crypto across multiple exchanges. What a time to be specializing in the line of work that you do. You are connecting BitGo and Copper so institutions can trade on crypto exchanges without handing over their actual assets. Why does that matter? And why is now the right time for something like that?
Ian Weisberger: Yeah, I mean, I think it’s been pretty obvious from the news of all the hacks that have happened over the last couple of months. I mean, obviously, most recently, the biggest theft actually in history, $6.3 billion stolen from Binance.
JD Durkin: Right.
Ian Weisberger: I mean, it’s just a huge amount of assets stolen. And before that, there were a couple other minor hacks. So people are starting to consider more and more who they trust to trade with, how they go about doing it. And it’s becoming a pretty important topic for people that are trading digital assets.
JD Durkin: As is the question of asset liability. If an exchange gets hacked or withdrawals get frozen, what actually happens to the clients’ money?
Ian Weisberger: Yeah. I mean, so what most institutions prefer to do is to have their assets with a third-party custodian. But in crypto, that’s not always possible. And so a lot of large firms are basically going out and essentially buying insurance or paying extra, [unclear: “just assuming that some of their money is going to get stolen, they’re like”]. Up until recently, firms had to basically just diversify their counterparty risk, trade with a couple people. And if withdrawals got, you know, frozen, they would have a big issue on their hands. I mean, we’ve been doing this since before the FTX times. I can’t tell you how many clients of mine had some serious problems because, you know, they got held up in that. But now what’s happening is you have these custodians that are around that allow you to park your assets with the custodians and then trade on the exchange.
JD Durkin: Right.
Ian Weisberger: And that’s kind of similar to what happens in traditional markets, where you have, you know, DTCC, clearinghouses, etc., where you can keep your assets separate from the trading venue.
JD Durkin: I know it’s relatively early, because the big hack was just not even a week and a half ago. In your conversations, are institutions already starting to rethink where they keep their crypto, or was there already a shift that was kind of underway before what happened with Binance?
Ian Weisberger: This accelerated it. Yeah, like, obviously people were already thinking about it, but now I can’t tell you how many questions I’ve been fielding, and my team has been fielding, about, okay, how do we keep our assets safe? Right. And, you know, we know there’s a bunch of exchanges now that are considering doing this, as are we with this Copper and BitGo partnership. We’re basically allowing people to keep their assets in a third-party custodian while trading through us and while trading on the exchanges.
JD Durkin: I got less than a minute left. Tokenized stocks, as we know, we talk about here on the show every day. They are moving more and more towards 24/7 trading. A lot of people might wonder who is actually buying and selling Apple shares at 2 a.m. on a Sunday.
Ian Weisberger: Yeah, I mean, the thing is, the equity market is actually very thin. Like, if you look at the way Nvidia traded over the weekend, the volume was relatively small compared to when the overnight ATS opened up. And then you saw that big drop. But about half of the price move happened on the crypto exchanges before 6 p.m., when the CME single stock futures opened. Then the second half fell after that. What we are seeing is huge volume in tokenized commodities, like the oil move. When that big thing happened with the war, oil just had a huge amount of volume and was quoted in the Bloomberg article, for instance, as the weekend price for oil. So it’s really a mixed bag. But I do think that tokenized equity volume will continue to accelerate on the weekends.
JD Durkin: Dude, what a time to do what you do, man. Get some sleep when you can.
Ian Weisberger: I tell myself that all the time.
JD Durkin: As a journalist, it’s good to see you though. Ian Weisberger, co-founder and CEO of CoinRoutes.
