Dave Ripley: Are the SEC Overreaching with its Approach to Crypto? Should Gensler Step Down? | E1108

1. 0:00 – 0:48

   Intro

   1. HSHarry Stebbings0:00

      Do you feel targeted by the SEC?

   2. DRDave Ripley0:02

      I think the approach is completely flawed.

   3. HSHarry Stebbings0:04

      Dave Ripley is the CEO of Kraken, one of the OG crypto exchanges. He explains the biggest problem with crypto regulators in the US and addresses some of the most common crypto misconceptions.

   4. DRDave Ripley0:15

      The right approach is what we see everywhere, what we see in Canada, in Europe where their parliament or legislatures work to put in place proper laws, that companies come in and actually have a path to register and license and provide services.

   5. HSHarry Stebbings0:29

      What do you think are some of the top myths that are wrong?

   6. DRDave Ripley0:31

      Well, there's many. Probably the one that's-

   7. HSHarry Stebbings0:35

      Over time I've learned to be brutally honest and- Dave, I am so excited for this. First off, I wanna say a huge thank you for joining me today.

   8. DRDave Ripley0:46

      Yeah, absolutely. Great to be here with you, Harry.

2. 0:48 – 2:14

   Introduction into the World of Crypto

   1. DRDave Ripley0:48

   2. HSHarry Stebbings0:48

      Now, I wanna break kind of the context part into two different parts. One is like what was your first engagement with crypto and how did you first make your way into the world of crypto?

   3. DRDave Ripley0:57

      So about 10 years for me. Just over actually. Um, at the time I learned about crypto, I was at, uh, Boston Consulting Group, large strategy consulting firm, and, um, I was interested to get back to the tech industry. Um, also kinda had in the front and back of my mind, you know, potentially founding a company. Individual who I learned, uh, you know, learned about Bitcoin from happened to end up being my co-founder. Um, so that's actually how I initially learned about it, and then just, you know, like many others, went down that rabbit hole. You know, I learned first about the tech and then all of a sudden I, I, you know, was like, "Wow, that's super interesting." Then the economic side, the societal side, the government piece, all these different, uh, aspects of crypto and, and spent frankly months kinda going down the rabbit hole learning about, uh, crypto in every which way. Also kind of like, um, going through the process I think a lot of us do of like learning about crypto and saying, "Hey, this can't work because X," and then kinda go research it and read more about it and then get to the point where it's like, "Well, actually maybe this actually would, would work for XYZ reason." So, super excited about it. It definitely aligns with like kinda my view on, you know, economic freedom and, uh, these pieces, and so just got incredibly excited about

3. 2:14 – 3:19

   The Origins of Kraken

   1. DRDave Ripley2:14

      it.

   2. HSHarry Stebbings2:14

      Okay, so we dive down the rabbit hole. How does Kraken come to be then and, and what does that entry point look like there?

   3. DRDave Ripley2:21

      You know, right in 2013, um, I, uh, founded a company, Glydara, and that was a, you know, crypto company. We basically, uh, provided, um, some tools, APIs to let all the Bitcoin wallets at the time add Bitcoin buying and selling into their apps. Kraken was one of our partners. We used them on the backend for liquidity 'cause they had a, you know, nice, big, full proper exchange that, that provided such things. So, um, knew some of the Kraken team, including, uh, Jesse from that angle. Um, it was 2016. We kinda started discussing about what's next for, uh, for Glydara, what's our next step, another fundraise. You know, we had already done one not, you know, I don't know, a year plus, uh, previous to that timeframe. And we talked, uh, about the potential for, you know, acquisition, and so Kraken acquired, uh, my company. It was small at the time, Glydara, and I joined, uh, Kraken following, uh, following that acquisition.

   4. HSHarry Stebbings3:15

      Got you. Okay, so you joined Kraken following that acquisition.

4. 3:19 – 7:06

   From COO to CEO: Lessons and Challenges

   1. HSHarry Stebbings3:19

      Uh, can I ask you, you were COO then I think for, you know, six and a half years or whatever it was according to the trusty LinkedIn, and then took over the reins as CEO. How was that transition and what are your biggest lessons and pieces of advice on moving into the role of CEO?

   2. DRDave Ripley3:35

      Uh, we talked about, uh, CEO transition for quite some time. Not even just months but, you know, on the order of year plus. That happened, uh, last spring, so it's really been probably just over a half year, um, so we're kind of in the, the, you know, the, the, the early period if you will of, of me taking over.

   3. HSHarry Stebbings3:54

      What have been the hardest things about transitioning into a CEO role? It's always difficult when you're, bluntly, that each CEO brings their own culture, especially a founder CEO. What have been the challenges?

   4. DRDave Ripley4:05

      Let me see. A couple of different things. One is we did, uh, you know, do the transition and, um, there was, uh, when we made the transition there wasn't actually someone to come in and, like, fill my old role as COO day one. Uh, so that (laughs) , that made for, like, an, an interesting start, and we, we were well down the process to actually doing that, finding someone to fulfill my role 'cause we had announced the CEO transition many months before and were in that recruiting process and we were feeling relatively good about it and, um, but we- we actually hadn't finalized it yet. And so I think that was probably one of the or, or it was as one of the bigger challenges, uh, you know, faced is just, um, trying to f- identify the right kind of interim, uh, step for us to take while I was gonna become CEO and still, you know, still have this, this role open if you will. And there was a lot of, you know, frankly a handful of great leaders at the company stepped up and, and really took on more and, um, you know, frankly really, uh, allowed us to be kinda like successful through that period.

   5. HSHarry Stebbings5:12

      Okay. That's one semi one. (laughs)

   6. DRDave Ripley5:17

      (laughs) Yeah.

   7. HSHarry Stebbings5:18

      If, if that was your sole ch- sole challenge in six months, Dave, you've been in immensely calm waters.

   8. DRDave Ripley5:25

      Yeah. So I would say the- (laughs)

   9. HSHarry Stebbings5:28

      (laughs)

   10. DRDave Ripley5:28

       I would say, yeah, let's keep going. Um, probably the b- you know, the, the other dynamic that, you know, has existed, um, frankly throughout this year is, um, and that I kind of, like, stepped into is, you know, we had SBF and FTX and, and all the other failures of 2022, you know, in the crypto space, you know, most of them, uh, you know, frankly tragic and, you know, uh, you know, fraud associated with, you know, at minimum FTX and, and, and so forth, so really, really, really horrendous. And com- coming into 2023, of course we see kind of a lot of a- activity on the, the regulatory side.... in, a lot of our geographies, call it, um, you know, Europe, UK, Canada, they were already in progress of putting in, you know, w- new regulatory frameworks. And so, that, that led to a number of different things we had to do just from, like, a buildout standpoint. But then you move to the US where they, uh, wouldn't, m- not in the same place, and so you kinda had this, you know, regulation by enforcement approach, largely, you know, referring to the SEC. That has been certainly a challenging dynamic throughout all of 2023 for Kraken specifically, but also a number of our peers. And that's definitely from, like, a kind of market environment challenge is, is really high on the list.

   11. HSHarry Stebbings6:57

       Okay. So I- I'm gonna ask some questions 'cause, you know, maybe my knowledge is rather base. I am a venture capitalist by trade, Dave, so it would, you know, be a good reason for

5. 7:06 – 9:32

   Is Kraken Targeted by the SEC?

   1. HSHarry Stebbings7:06

      that. Um, do you feel targeted by the SEC? Because it's like, you and Coinbase have been very good actors, and it feels as, it feels like a bit of a targeting to be pro-

   2. DRDave Ripley7:15

      It's clear that they are, um, they do appear to be focusing on companies that are US-based companies, at least in, in the case of the, the SEC.

   3. HSHarry Stebbings7:27

      Do you feel like they're overreaching?

   4. DRDave Ripley7:29

      The right approach, but just, like, not in the right place on the spectrum. But I think it's more, more fundamental than that, in that their entire approach is off, right? So it's just completely off. And so the right approach is what we see everywhere, what we see in Canada and in Europe and in UK, where parliament or legislatures work, work to put in place proper laws, the regulators work to implement those laws, the companies come in and actually have a path to, um, uh, you know, to, to register and, and license and provide services. That's, you know, the right approach, and that's, none of, none of that we've seen from, from the FCC, and they've been, you know, fairly resistant to that, that type of approach.

   5. HSHarry Stebbings8:13

      Why are they resistant to that approach when it is very common in other jurisdictions?

   6. DRDave Ripley8:17

      I think this is, this is for the most part, you know, we're mostly left wondering, you know, why, why is this, why is this the case?

   7. HSHarry Stebbings8:25

      If they are successful in their attempts, what does that mean for a Coinbase and for a Kraken? It means limiting your activities? U- again, I'm really sorry for the base questions. I don't know

   8. NANarrator8:37

      (laughs)

   9. DRDave Ripley8:37

      Yeah, in, uh, you mean if the, if the SEC is successful? So it's, it's really tough to, like, almost, um, it's almost tough to answer that question 'cause, you know, they won't be successful, right? They, they've lost in XRP. They've lost the, the Grayscale, uh, thing. They, they just kinda continue to not see success with these, um, with these actions. So I don't think they, you know, they, they won't be successful. Um, I, it's tough to imagine, like, exactly what it looks like for, you know, a success on their side, and w- what, what that would even be. I mean, in these particular, in, you know, the claim against Coinbase, claim against Kraken, they've, you know, identified a handful of, of tokens in each particular one. Um, we, of course, list more than that, than the handful they've identified. It's tough to, tough to see exactly the, you know, the, the end game that they're, they're headed down, uh,

6. 9:32 – 10:35

   Should Gary Gensler Step Down?

   1. DRDave Ripley9:32

      to, for what it's worth.

   2. HSHarry Stebbings9:34

      I spoke to mutual friends of ours. They, they asked me to ask, should Gensler step down, as many suggest that he should, given the lack of success that he's had?

   3. DRDave Ripley9:44

      You know, at least within the, the cryptocurrency sphere, we don't see anything, you know, positive, any positive steps, any, you know, uh, you know, clarity and guidance, any, um, you know, frankly, positive steps for investor protection or, or any of the goals, um, that, uh, the SEC has, you know, I- I think their, their mission, if you will. And so, um, you know, that's unfortunate.

   4. HSHarry Stebbings10:08

      So just to clarify, then, when we look forward to the next three to six to nine months, we expect SEC to continue losing on multiple different fronts?

   5. DRDave Ripley10:18

      Yeah, uh, I mean, I, I, I'm not too sure what's the number of cases they have out there right now. We've, we've called out kinda the two that are top of mind for, for us, certainly, the, the Kraken and complaint in the, the Coinbase one. But yeah, I mean, we're quite optimistic about, um, about the path forward

7. 10:35 – 11:54

   Future US Presidential Election's Impact on Crypto

   1. DRDave Ripley10:35

      for those.

   2. HSHarry Stebbings10:35

      But I do just have to ask, you know, as we look towards, you know, uh, bluntly, the presidential election, how important is the presidential election for crypto in the US? I'm obviously outside (laughs) the US, so educate me. What impact does that have?

   3. DRDave Ripley10:48

      I mean, look, the longer term arc, we have a number of these candidates. I mean, almost if you look at that, that suite of candidates that are out there, they're all pro-crypto, pro-Bitcoin. Um, a lot of the ones that are, that are interesting, uh, candidates, you have RFK Jr. Of course, he's independent now, started out Democrat, now independent. And then you go to the other side, uh, you know, Governor DeSantis, uh, Vivek. Uh, the majority of the, the candidates out there are, um, you know, pro-Bitcoin, pro-cryptocurrency. Um, of course, you know, w- we don't, we don't frankly see any comments from, uh, you know, our current president on Bitcoin, but we, we see it, you know, from, from h- from his team, if you will. Um, so look, the long arc, I don't, I can't tell you who's gonna win this election, but I, I will say that, you know, over the coming set of elections, we will have a pro-Bitcoin, pro-cryptocurrency president. It, because crypto and Bitcoin are naturally gonna grow. They add amazing value for individuals, and they're gonna continue

8. 11:54 – 13:04

   Coinbase vs. Kraken Branding

   1. DRDave Ripley11:54

      to grow.

   2. HSHarry Stebbings11:55

      Over time, I've learned to be brutally honest, uh, in shows, and like, Coinbase, for me, it seems like the consumer brand, where you go to... We have pubs in the UK, but you go to the pub, people know Coinbase. It's on-

   3. DRDave Ripley12:08

      Yeah.

   4. HSHarry Stebbings12:08

      It's on Super Bowl ads. It's on buses. Um, and Kraken's like, the one where if you know crypto, you know Kraken.

   5. DRDave Ripley12:16

      Yep, yep.

   6. HSHarry Stebbings12:16

      Do you see what I mean?

   7. DRDave Ripley12:17

      Oh, for sure.

   8. HSHarry Stebbings12:18

      How-

   9. DRDave Ripley12:18

      Yeah.

   10. HSHarry Stebbings12:19

       Is that... Are you happy with that branding? Do- do-

   11. DRDave Ripley12:22

       Yeah.

   12. HSHarry Stebbings12:22

       Is, is the stadium deals necessary? I'm just fascinated to hear your thoughts on that.

   13. DRDave Ripley12:26

       Yeah, well, I think, I think there's a couple of different things. Just on, like, evolution of Kraken's products and one of the things we've done even more recently is actually start marketing. We, we almost made it, you know, we made it to become an enormous, you know, multi-billion dollar company without, frankly, doing much marketing at all, which is kind of amazing in and of itself. But over the past year, and really almost over the past six to nine months, we've actually started to, uh, become a more meaningful player, uh, with marketing, and that has been one of kind of like the catalyst to drive more growth in those, those newer products for ourselves on the consumer individual retail

9. 13:04 – 14:54

   Commoditization of Marketplaces

   1. DRDave Ripley13:04

      side.

   2. HSHarry Stebbings13:05

      Do you worry about the commoditization of marketplaces? It's just, like, if the majority of trades are in, like, s- you know, s- certain markets, be it Bitcoin, be it Ethereum, be it Solana, I presume a lion, lion share. Everyone sells trust, everyone sells peace of mind, you know? A, p- do you find it difficult in the commoditization and differentiation?

   3. DRDave Ripley13:26

      I think it's going in the opposite direction. It's extraordinarily difficult to get all the foundations right, security, reg compliance, all these different pieces. So much so that we've seen, um, a lot of companies come, not just go by the wayside, but completely disappear. We've almost seen the opposite. We've almost seen the opposite, where we've seen a lot of companies come in, try, not be successful.

   4. HSHarry Stebbings13:48

      Speaking of kind of it's the opposite of what you think there, I think a lot of people have commonly held beliefs about crypto that they're quite strong on. What do you think are some of the top myths that you so often see that are wrong?

   5. DRDave Ripley14:02

      It has no value. Right when someone makes that statement, there is like, "Okay, so this person hasn't done too much reading on history," which is not that, not, not that-

   6. HSHarry Stebbings14:10

      Well, do you, do you, do, do you not argue, and this, I sound like Jordan Peterson, you know, which is like, "Well, you know, how do you define value?" Like, a piece of paper doesn't have value, it's a promise. It's a guarantee-

   7. DRDave Ripley14:22

      Exactly.

   8. HSHarry Stebbings14:22

      ... or a sword. So-

   9. DRDave Ripley14:22

      Exactly. I mean, I mean all it, all it is, I mean, all, all currency is today and all it ever has been is a system of records, a way to record transactions that have happened, and that's all, all, all, all currencies have ever been. They have all basically functioned as this way of a reliable system of record, a reliable ledger. The fact that, you know, Bitcoin is a reliable ledger is, uh, uh, I mean, is just clear,

10. 14:54 – 18:40

    The Utility Value of Crypto

    1. DRDave Ripley14:54

       right?

    2. HSHarry Stebbings14:55

       I'm gonna go for this, fuck it. It's, it's not even a Friday, it's Wednesday, it's midweek, but I just wanna go for it 'cause I, I want this discussion. Um, I totally see, I understand the point on value, I just don't see the point on usage. For me, we have great payment rails in Europe, for sure, I can't speak for the US, I think they're a little bit more challenged. Like, the financial ecosystem is strong, open banking improves it even more. I don't understand the utility value.

    3. DRDave Ripley15:19

       Yeah.

    4. HSHarry Stebbings15:19

       Can you help me understand that?

    5. DRDave Ripley15:20

       Yeah. As far as, like, where it's superior on, you know, from a, as a form of, uh, as a form of currency, um, there are a number of different ways, and, uh, the delta in which how well it performs as a currency, frankly, I would, I would assert that it's, you know, uh, inherently superior for almost everyone in almost every place. Not yet today because we haven't built out the infrastructure and it's not in people's hands and all those types of things, but we're on the way there, but there's certainly a range. If you look at an individual, you know, like yourself or myself, US, Europe, you know, payment access that we have as individuals, you know, retail consumers, you know, it's pretty good relative to most places in the world. Um, we look at, you know, other places in the world and just with respect to access, it is, uh, drastically different, you know, the same level of technology, speed, cost, all of these different pieces. Again, I wouldn't, I wouldn't say that it's, like, fantastic in US or Europe. There are certainly challenges. You know, banks operate nine to five, not on weekends, there's a number of things that you wanna do, there is huge cost. Somehow the financial services industry is the most profitable industry out there. That money's coming from somewhere, right? (laughs) And so it's coming from us and we're paying, paying the tax to these companies just simply, um, just simply to, um, you know, hold our money, to, um, allow us to transact with our own money, and it's, it's a significant cost.

    6. HSHarry Stebbings16:51

       Okay, so if we go back to that, like, you know, the, uh, in emerging markets or in, uh, okay, we can, we can kind of play that one out, mm, but like, you know, actually M-Pesa has been an incredible innovation in, in large parts of Africa for payment flows for many years. It's well ahead of a lot of European and US financial products and tools. Um, I kind of, on the, like, yes, a lot of the financial services-

    7. DRDave Ripley17:17

       Yeah.

    8. HSHarry Stebbings17:17

       ... but financial services aren't actually bad. Neobanks are innovating incredibly well on-

    9. DRDave Ripley17:21

       Yeah.

    10. HSHarry Stebbings17:21

        ... a lot of the traditional challenges. E- y- or new banks is what I agree, Brazilian banks were a nightmare. Uh, Nubank has innovated incredibly well. And so I'm like, "Well, does it need a new currency or does it just need new providers, vendors and products to make it better?" And, and I just-

    11. DRDave Ripley17:40

        Well, let's keep going, let's keep going. What else are these currencies s- (laughs) supposed to do? Um, you know, one of them is to hold value and, you know, one, one of the things we've seen to varying degrees, you know, substantial inflation, um, and again, this varies significantly from one part of the world to the next. But, uh, this is a, a meaningful problem, you know, frankly even just recently for, for people in the US, but substantially so in, in many different parts of the world, and that has, you know, gone on for 100 years, you know, hundreds of y- frankly, s- since the existence of, uh, you know, creation of fiat currency, if you will.

    12. HSHarry Stebbings18:16

        S- so this is a-

    13. DRDave Ripley18:17

        You know?

    14. HSHarry Stebbings18:17

        ... it's a hedge against inflation? So we're in Argentina and we have incredibly volatile currency swings, but Bitcoin is a hedge against that?

    15. DRDave Ripley18:24

        Of course, yeah. Yeah, absolutely.

    16. HSHarry Stebbings18:26

        Okay.

    17. DRDave Ripley18:26

        I mean, it, it, it, you know, is a...... uh, you know, as a currency has, you know, the built into the protocol, right? You know, fixed supply, um, and is, you know, inherently not inflationary from that standpoint.

11. 18:40 – 22:28

    Crypto’s Volatility

    1. DRDave Ripley18:40

    2. HSHarry Stebbings18:40

       Do you not worry that the vola- (laughs) You're like, "Jesus, Harry, Christ, I came on for a nice chat." Um, do you not worry that the volatility of the swings mean that actually, you know, transparently, it's not really got use in transactions, say for someone wi- you know, in an emerging-

    3. DRDave Ripley18:58

       Yeah.

    4. HSHarry Stebbings18:58

       ... economy in that way? And actually, it's pretty volatile swings anyway, Dave. You know, I have crypto. I'm much poorer and I'm much richer. (laughs)

    5. DRDave Ripley19:06

       Yeah.

    6. HSHarry Stebbings19:06

       And ex-

    7. DRDave Ripley19:08

       Well, um, so there is quite a bit of volatility. Um, f- first, I'll point out that it's a lot of volatility up into the right across the, you know, the history of the, you know, of, of Bitcoin. And it, it's not a lot of volatility and down into the right as, uh, you know, most fiat currencies, uh, perform, when you just look at them by the numbers, the hundreds of fiat currencies that are out there. One of the things we haven't talked about yet is cross-border transactions. But to the extent that, you know, Bitcoin, you know, continues to be adopted and grow for all of these different use cases, and there are many. We're talking about payments and store of value, which is for sure the biggest one, and we should be talking about that. But to the extent that, you know, the adoption continues to grow, I mean, the, the, um, you know, the, the potential here is significant. And so, of course, you're gonna have a lot of people, you know, investing on that potential outcome, albeit maybe farther off in, in the future. Um, and that's gonna lead to a lot of, you know, fluctuation in, in prices. And so we see, you know, individuals doing this. We see big Wall Street, uh, banks and hedge funds and, and big investment funds doing the same kind of, you know, investing or even, you know, endowments and, and all of the institutions that have, you know, started to kind of come in several years ago and kind of continue to, continue to grow in this space.

    8. HSHarry Stebbings20:27

       They've all been kind of flimsy. And I've kind of pushed back on all of them, and we haven't really got like one Hail Mary, like store of value for when your currencies in really poor or emerging markets have problems with, you know, stable sources of value. That's like, that's one that we got.

    9. DRDave Ripley20:45

       There is some truth to what you're saying here. Um, but again, I think it's a positive. Cryptocurrency has all these benefits. There's many of them, right? You know, e- I mean, I, I think one where we see even, you know, our clients using cryptocurrency today, Bitcoin and, and, and other stable coins are for cross-border payments. And it truly is substantially faster, substantially, uh, less expensive than any other, uh, means they have available to them. But look, the fact that there are many different use cases for cryptocurrency, I would almost describe, you know, Bitcoin and cryptocurrency, what they are as innovations similar to the internet itself, massive, huge, broad, and wide. And so what we're really gonna see is, yes, like more narrow, specific use cases, um, that, you know, grow and have to take hold over time, as opposed to like the whole thing all at once, which is, you know, y- you know, a challenge to, you know, really pull off.

    10. HSHarry Stebbings21:45

        So I, I, uh, digging in on a couple of different bits there. My, m- with my age, Dave, the trouble is my memory is not what it used to be. Uh, (laughs) I used to have a pen, and I used to write on my hands to remember, but I sadly don't have that anymore. Uh, now, one, I'm, I'm always intrigued by the cross-border payments thing, 'cause I'm like, "Ah, it's cheaper and faster." I mean, who, who really needs cheaper and faster? I mean, it's like, I think it's quite a small amount. If you're moving large, large sums of money, think houses or, you know, whatever-

    11. DRDave Ripley22:13

        Yeah.

    12. HSHarry Stebbings22:13

        ... one is buying, doesn't really matter if it's today or tomorrow, really.

    13. DRDave Ripley22:17

        True.

    14. HSHarry Stebbings22:17

        And actually, you're less price sensitive on fees, and actually fees, it's kind of a commoditization game on who can charge the least. Um, and, and so I, I kind of find that one challenging,

12. 22:28 – 25:20

    Crypto as Future Infrastructure

    1. HSHarry Stebbings22:28

       to be honest. Can I ask you though, I, I have so many people say to me, "Ah, Harry, the future of crypto is actually consumers won't know that they're using crypto. It'll just be this beautiful infrastructure on rails." I think it was, uh, Rebecca Kayden at Union Square Ventures who said that recently. What does that mean, and what does that look like for crypto adoption when it's like consumers will be using crypto, but they won't know it, and it'll be infrastructure?

    2. DRDave Ripley22:54

       I think, you know, you know, we're starting to, um, we're starting to see that in places. There will effectively be, you know, a set of service providers or companies that obfuscate away, frankly, a lot of the complexity that still exists there with, with crypto and, and bitcoin. We talk about, you know, having to, these clunky long addresses, um, that are necessary. Um, there's, of course, the, the question on custodial versus self-custody, you know, challenges with self-custody and that it... And so I think a lot of it goes towards like, hey, all of this, the user experience is still, uh, still needs a lot of, you know, work, um, and, uh, to make more simplistic and kind of push a lot of that complexity hopefully more so to the background, but you know, do it in a, in a secure way.

    3. HSHarry Stebbings23:43

       And so on the utility side, what, what would that look like if we move away purely from the financial services space and the infrastructure that is used by consumers in a way that they don't know? Wha- what is that?

    4. DRDave Ripley23:57

       Well, I, I mean, I think it could be, uh, you know, a handful of different things. I mean, we have, we have, you know, payroll and, uh, remittance companies that are, uh, you know, clients for, for Kraken that, you know, run this business, and they simply use, uh, you know, Kraken as for backend liquidity, you know, to convert from, you know, fiat to, um, uh, to crypto. And they use the, the crypto side of things to, you know, to move money from one, one geography to the next. But, you know, for their, their customers, they, um, you know, they are providing kind of like a fiat in (coughs) fiat (laughs) fiat in, fiat out on one side versus the other.

    5. HSHarry Stebbings24:37

       So, just so I understand this. So they're using... They're b- basically paying their teams in, in crypto, but buying it through you, and then sending it out in, in crypto? Is that it? Just so I understand the payroll example.

    6. DRDave Ripley24:49

       Crypto payroll company. Um, business wants to use them. They... The business mostly operates in, in dollars or euros, say, and so they need to find a way to pay out their employees in, in, uh, in crypto if that's what they wanna do. They simply go to one of these payroll companies. They (coughs) give them the dollars and the payroll company helps them, you know, pay out the... pay out their employees in crypto. Um, you know, that payroll company needs some liquidity on the backend, Kraken's a choice,

13. 25:20 – 28:20

    Paying Employees in Crypto

    1. DRDave Ripley25:20

       uh, to do so.

    2. HSHarry Stebbings25:21

       Okay. Do you think we'll see a wave of companies pay their employees in crypto?

    3. DRDave Ripley25:26

       Uh, we certainly do, um, and there are quite a few. I think the u- the use case largely we come back to the, the, uh, global, uh, piece. And so I think, you know, setting up global payroll is frankly incredibly difficult and complex, and only large companies, you know, can, can really, really do it, um, successfully and at reasonable cost. And so I think a lot of smaller businesses, certainly freelancers, all use, uh, you know... Many of them use cryptocurrency already to, uh, to, to pay their, you know, contractors, freelancers, or whoever might be helping out these, you know, small startup businesses.

    4. HSHarry Stebbings26:06

       If we take that as an example, you have like Deel and Remote, which is set up to, to do that. Again, is that not like an innovation on the product side, not an innovation on the currency side? I'm just... I'm, I really... 'cause I, I try and... I, I, I love op- innovation. I'm an, I'm an venture capitalist, and my job is to invest in it, but I just can't get there.

    5. DRDave Ripley26:28

       Bitcoin cryptocurrency isn't, you know, coming out and being like, "Hey, the world has never known transactions or financial transactions or payments or money or what have you," right? I mean this is, um, this is of course not what's happening, right? I mean it, it is the alternative better system, not, um, not something that's, you know, uh, you know, hasn't existed before, if you will, at a fundamental level.

    6. HSHarry Stebbings26:54

       Uh, we're seeing this resurgence in crypto right now, um, and, uh, you, you messaged before about crypto's 89th obituary and why this thing will not die. I was intrigued to get your thoughts on that, Dave.

    7. DRDave Ripley27:10

       Yeah. It's interesting. I was looking at that. I think we're up well above, uh, 89, uh, today as far as obituaries, um, in number of times that, that Bitcoin has died. Crypto, I guess, as well. You know, it's interesting that we see this, um, you know, the growth kind of like... You know, if you look at it and zoom out to a handful of years, uh, it's almost, you know, um, consistently always just con- con- continued to grow and, and grow positively. I think part of it potentially, you could say, part of it potentially is the... are the cycles of, you know, huge growth and then pull back in the mark- market (coughs) . But if you look at the, the actual articles when these articles come out, you actually see more of them come out in, uh, the, the kind of quote unquote "bull market" periods. Um, and so I don't know if they're... You know, I, I think it's more so in the news, and so it's a, it's a bigger story for someone to kinda come out at that time and, you know, with a, with a claim that the thing is gonna, gonna die.

14. 28:20 – 30:01

    Managing Morale in a Volatile Market

    1. DRDave Ripley28:20

       Um-

    2. HSHarry Stebbings28:21

       How do you manage morale across very volatile crypto pricing markets? You know, when it's high, I'm sure activity is high, great for the company. And then when it's low and it's a crypto winter, it's a sucky, sucky, uh, morale.

    3. DRDave Ripley28:37

       Yeah. It's very, um, insightful comment 'cause you couldn't be more right. Uh-

    4. HSHarry Stebbings28:42

       Yeah.

    5. DRDave Ripley28:43

       It is. It is a-

    6. HSHarry Stebbings28:44

       I always, I always feel for you and for Bryan when it's like... it's in the doldrums. I'm like, "Ugh."

    7. DRDave Ripley28:48

       Yeah. Yeah. It is. It is very insightful comment. I think there are a number of challenges. I mean, um, you know, at Kraken or Krakenites are, um, you know, working at Kraken focused on, on, uh, you know, building the great company that Kraken is. But a huge number of Krakenites are very much focused on the broader industry, and frankly what Kraken's mission is, growing adoption of cryptocurrency. They see the benefits. They see the positive impact on the world that we can have, and they want to be part of this. They dedicated their lives to, to, uh, advancing crypto even almost irrespective of, of Kraken. And, and like you said, yeah, like probably even have some of their, their personal wealth in, in cryp- crypto so that, you know, uh, ha- further has an impact, you know, through these, through these cycles. But I think the, the, the piece that kind of like holds us together for Kraken and, and a lot of us is, um, that deep commitment to the mission, right? And so we're all very much focused on that. We talk about that in the good times. We talk about that in the, the rougher times. And that, you know, is the thread that, that really, you know, keeps everyone, you know, positive even through the challenging periods.

15. 30:01 – 30:54

    Balancing Parenthood and CEO Role

    1. DRDave Ripley30:01

    2. HSHarry Stebbings30:01

       Dave, you said about deep commitment. How many kids do you have? You have three?

    3. DRDave Ripley30:06

       I do, yeah (laughs) . Yeah.

    4. HSHarry Stebbings30:07

       Okay. How on earth do you be a good father and a good CEO with three kids at the same time? Like, what do you know now that you wish you'd known before you had children? What would you advise yourself?

    5. DRDave Ripley30:19

       Yeah. Look, I, I have, uh, I have three, three kids, young, you know, f- five, three, two. I mean, look. I mean, just laying it to you straight. I mean, one is, uh, you know, my wife, Laura. That's probably like an incredibly critical part of this, you know, amazing mom and all those different pieces. The other is... I mean, the reality is I spend an enormous amount of time and energy on, uh, on Kraken. I actually spend a, a huge amount of time and energy on, uh, family. I mean, of course work from home kind of help- helps, uh, you know, our, our global remote model that we've had forever,

16. 30:54 – 32:14

    Remote Working Effectiveness

    1. DRDave Ripley30:54

       um, helps with that.

    2. HSHarry Stebbings30:55

       So I'm gonna lob a, lob a grenade in for this one. Remote from day one. I, I struggle with this one too. Um-I don't know any role that is better performed remotely. Uh, even engineering, scrums, the collaboration that devs need together with product, with sales, with customer success. Help me understand, why is remote better?

    3. DRDave Ripley31:18

       I think there's a, a number of reasons why it's, it's actually, it's actually better. So I hear you, there's probably a trade-off, you know, to the extent that you can be there in person at any given day, at any given time, you know, there, there are benefits from that. It's like, okay, so what's the counterbalance to that? Well, um, there's a bunch of tactical basic stuff which is, you know, commute time, uh, for individuals, allowing them to kind of structure their day, week, month however they, they see fit is really helpful from, like, a flexibility and frankly get work done.

    4. HSHarry Stebbings31:52

       I worry about young people getting depressed. I mean, you see mental health drastically reduce, loneliness increase, companionship decrease, and I... Listen, for parents, I totally freaking get it. For everyone else, it's like, I think it's good to be in office, no?

    5. DRDave Ripley32:10

       Yeah. It's... I, I hear you. I, there, there is something, and

17. 32:14 – 35:04

    Quick-Fire Round

    1. DRDave Ripley32:14

       this is like each to his own.

    2. HSHarry Stebbings32:15

       I want to do a quick fire round. So I say a short statement, you give me your immediate thoughts. Does that sound okay?

    3. DRDave Ripley32:20

       Okay. Sure.

    4. HSHarry Stebbings32:22

       So what's your favorite piece of content most recently?

    5. DRDave Ripley32:24

       Um, probably, I'm reading the, uh, No Rules Rules Netflix book, Reid- Reid Hastings. Pretty cool.

    6. HSHarry Stebbings32:30

       Where do you think you need to improve most as a CEO?

    7. DRDave Ripley32:33

       You know, I think that probably the biggest piece is, uh, you know, communication. You know, so as COOO, I'm kind of like communicating with teams in, in, in like a more narrow space, but like really communicating to, you know, the big, the... you know, the, the full company, 2,000 plus. Started to do that, need to do more of that. And frankly this as well, communicating even externally outside of Kraken. I don't really have much of a social profile. Starting to build a little bit of that, but it's, it's pretty weak right now.

    8. HSHarry Stebbings33:01

       What concerns you most in the world today, externally?

    9. DRDave Ripley33:05

       Yeah. You know, I think it's probably the, um, you know, the, the various different conflicts that we see. Are we... you know, are we seeing more or fewer, um, uh, you know, as we go forward?

    10. HSHarry Stebbings33:16

        What's the most painful lesson that you've gone through that you're kind of pleased to have gone through?

    11. DRDave Ripley33:21

        You know, one of the things that we've had to do a lot this year is, uh, you know, pivot the company to, you know, focus on, uh, in, in new and different areas as things evolve, you know, regulatory environments and so forth. We did a lot of that, um, maybe reasonably quickly, which was a good thing, but didn't really communicate and execute it deliberately enough, such that probably caused a lot of flail for the company.

    12. HSHarry Stebbings33:44

        Tell me, what one word would you want on your tombstone, and why that word?

    13. DRDave Ripley33:48

        Yeah. Our friend. You know, I think it, you know, a little bit simple and basic, um, but, uh, but I think that's, like, something that's pretty, pretty prominent and important, is, uh, you know, yes, there's all these things that we do to, like, try and impact the world meaningfully, but, you know, um, I think kind of like the individual relationships are just as valuable and important.

    14. HSHarry Stebbings34:14

        Dave, we do this in five years time. It's 2028. Where are we then? Where are you then? Where's Kraken then? Take me to that.

    15. DRDave Ripley34:23

        Five years time. Yeah. Five years... This is a, a great trajectory. I mean, look, I think we will be at a meaningfully different place as an industry, an order of magnitude bigger. I think Kraken will likely be, uh, more than an order of magnitude bigger, uh, in that timeframe. Um, and so, um, this means that we're just going to be serving that many more clients with that much more product, uh, and services, and, uh, really bringing cryptocurrency to the world.

    16. HSHarry Stebbings34:49

        Dave, I, I cannot thank you enough for this. I've so enjoyed the discussion. I've so enjoyed you putting up with my, uh, British debate. Um, but it's been fantastic. So thank you so much.

    17. DRDave Ripley35:01

        Fantastic. Thanks so much, Harry. Great being here with you.

Episode duration: 35:04