please right thank you and uh good morning so I guess uh this topic we're talking about today is the uh the role of digital asset markets uh in the world of Investments um so I guess we all um have been looking at just for assets as the future of Finance um and certainly 2022 has been an interesting if not slightly bumpy ride um so I'm going to take you through a bit of a journey in terms of what uh I think is interesting for all of the uh people on this on this call and um let's see where we end up so maybe a quick bit of background on myself before we get going uh so I you know my name's Kelvin I'm the president and chief business officer of fusang uh I've been in the digital asset industry for quite a few years uh most noticed notably with a project called by car which was sponsored by clsa which was focused on private Equity International real estate real estate tokenization I've also been a regulator of the sfc um uh driving the market intelligence program and I'm most well known for a company called liquid net and bringing that to Asia which is the world's most successful and largest institutional Dart pool I also serve as the co-chair for the afo for philanthropy and Legacy group so if you want to contact me follow me on LinkedIn right so this is really the tale of two types of digital assets uh on the left here we have crypto assets um where certainly in the last I think so certainly since I've been involved in this industry since 2017 or looking at this there's always been the question about crypto assets and what is the real valuation and then we've all on the right hand side we've really got like you know the digitization of Finance um at least the the vision of that and the factors that most of Finance is still not really on the blockchain so on the left you know with crypto assets we're really thinking about questionable valuations of uh of crypto tokens and certainly the big elephant in the room is the fact that most of these tokens had questionable valuation models um a lot of the uh hype and interest in crypto currencies has suddenly been driven by what looked or may look like a investment product of some sort um but I guess through smart legal gymnastics um uh there's always been the the uh I guess illusion of of the benefit of an investment without the actual legal terminologies and I guess that's probably brought about some of the problems with the current market structure of the digital asset markets where quite ultimately when you're buying these tokens you don't often know what you're really buying um and the Fallout certainly in 2022 from uh whether it's like Terra Luna crashing or the FTX Saga um that contagion across the industry recently as the legal Frameworks in all countries around the world especially around Securities Investments and client money management are being implemented it's very apparent that some of these tokens don't have the same legal structures as you would expect as a regular security and that certainly causes uh higher or even unknown risks for investors when investing into crypto products however that obviously the attraction of crypto is certainly for the last five six years has been extremely uh uh High returns or yields that haven't traditionally been as correlated to some of the traditional investment industry that we've seen um I guess that that hunger for for yield and uh Equity upside in token form has been uh what's really been driving crypto markets to date that General lack of governance though certainly certainly has shown through in uh 2022 and we'll talk a bit more about that as we go through this presentation in in traditional Finance which is certainly the world that I came from um you kind of look back and we think wow there isn't not a lot of firms that are sitting on the blockchain there's been the promise of a national stock exchanges moving their clearing systems onto the blockchain there's been the talks of real-time settlement for institute institutional Finance um but it's not always been really easy um right now a lot of the regulated kind of like platforms that are coming into the blockchain space uh tend to be single siled platforms um they may have a license but maybe they don't have a network or the the kind of the blockchain network effect to really scale their business at least not yet um right now most Securities uh kind of stuck on your traditional National Stock Exchange very hard to transfer they don't have the characteristics attributes uh like cryptocurrencies which is one of the biggest attractions to what I I guess digital asset markets and digital Finance is exciting for everyone involved um right now there is no network of financial institutions anchored around a Securities Exchange certainly not in the digital space and there is a lack of standards for current market structure for asset tokenization so if we look around the world there are various projects where they have their own methodology and approach and types of assets that are trying to be tokenized and we'll talk about that a little bit more uh later in this presentation um so let's just think about where we came from and why everyone got so excited so you know in the very early days uh in January 2009 and obviously we've just passed a bitcoin's birthday again um we uh had the birth of Bitcoin right so it took probably until about 2013 2014 to you know for the early movers to really kind of get note of this token um what really got the market going was the uh launch of the ethereum platform and somewhat uh I guess that the most interesting part was really the first erc20 token issued on ethereum and then the Ico craze that hit in 2017 and 2017 was really a marquee yeah for getting resell uh interest into cryptocurrencies certainly the the move of Bitcoin from three thousand to twelve thousand and uh I guess all these white papers that were coming up were effectively projects on a white paper with an idea and a vision uh and drove a valuation that people would invest into swapping I guess in those days Bitcoin or ethereum for whatever native ERC token you were trying to raise funds against um since then we've obviously had the question but and reboom of the markets uh I think I recall the crashing of the Marcus came when shorting first was implemented into the market um and then certainly the 2021 rise of all cryptocurrencies was highly driven by the free flowing liquidity from I guess all the free money floating around in the money markets pushed out by the governments and from uh just a dollar printing around the world um so what have we learned on this journey so far um is uh with cryptocurrencies clearly huge interest in the transfer of value through protocols um I guess each cryptocurrency which blockchain in many way represents some form of protocol um it's pretty obvious that fundraising has been one of the most exciting parts of cryptocurrencies but certainly since the IC agreement 2017 we've never quite hit the highs of the fundraising on a blockchain kind of solution there are various blockchains out there still attempting to reinvent uh this wheel however as fundraising is typically a Securities based uh regulated activity my viewers a lot of this will move to more traditional regulated platforms and it'll be really interesting to see how protocols and these regulated platforms into operate as the market structure changes so have we seen a financial system built on a blockchain yet I think this is still the first Innings if even that of this Market structure we really haven't really seen any uh material adoption by the institutions other than some direct investment in cryptocurrencies um and certainly so what why why is this uh the case and certainly that's the stifling of um adoption uh sorry institutional adoption for cryptocurrencies is quite often stifled by the lack of Regulation and I guess that certainly in the last year the messy failures but even post all of the dramas that we've seen in 2022 we've still seen and heard uh many large institutional stories coming to Market so let's talk about the rise of security tokens so back in 2016 I just won the First Security token offerings on uh at the ethereum was Overstock my own project that I was working on certainly in November 2018 was sponsored by clsa for commercial real estate and private Equity tokenization um obviously the the company that I work for now has been working on its own Equity issuance um so a few things uh Equity is all issued as erc20 tokens actually on the ethereum blockchain um there was a project that they were working on for CCB the IPO of tokenized bonds so this is a regulated IPO of a tokenized bond and certainly the the other Milestone would have been a regulated public offering of through settings own shares um you see other institution offerings in the market such as the European investment Banks 100 million dollar digital Bond issuance and most recently a 50 million Bond issued by UBS and there are various other institutional stories that I won't go all into and you can so you can see that there are platform days from large institutions and there are other regulated intermediaries in this space all working on their own versions of uh security tokenization yeah so let's just think about this so where we've come from is the bad actor stifling the market and what what went wrong um we've got the kind of C5 markets um I guess the the ironically the the promise of blockchain not quite fulfilled yet where centralized intermediaries um which are unregulated um often calling themselves exchanges actually look a lot more like broker platforms so so why why do I say that there's quite often these broker platforms are not doing some form of spot uh exchange only they may be running margin businesses uh quite a lot of the I just point through quite a lot of these players have been trading against clients with their own uh market makers which is really a huge No-No coming from electronic markets this in the traditional Securities world is highly frowned upon and a very poor Market practice so any Regulators would stamp down on that straight away and there is a a larger conflict of interest uh certainly in the C5 crypto space where governance or lack of governance uh lack of operating Frameworks lack of independent Audits and lack of proficient independent Regulators um it really exists right so we're really so early in the digital asset space that I think The Regulators had had a hard time to get around some of the problem sets that have materialized in cryptocurrencies but I can see with my if I put my former regulatory happen and this is my view that actually a lot of the traditional Finance regulatory Frameworks with some slight adjustments would actually set the market structure on a much more stable tone and remove all of the Bad actors over time so we've had like fraudulent operators that have stolen client assets and misappropriated client funds I mean even in the security space this happens so it's not like we can blame this asset class for having Bad actors but certainly the uh the regulation around it has been light touch at this stage um and I I suspect that that will tighten over time um there's certainly been very poor risk management of a lot of these firms where uh client funds has been used by exchanges to access other liquidity so one thing about cryptocurrencies which is materially different compared to the Securities Market it's just the proliferation of exchanges where there are multiple venues to access liquidity and in one sense that's created more liquidity for the market but in other census created expense exposure for clients and Prudential risk from Market to Market linkage which probably wouldn't see in traditional financial securities exchanges um this is really interesting Market development but I think we've probably regulation and proper governance actually the the feature of digital Finance still looks healthy and exciting as we get to a market structure which connect interconnects these operators through some form of Regulation um as we've seen actually with the I guess the the Celsius employers implosion the lack of bankruptcy protection for a client assets has been quite shocking um I think I think the current ruling is that the uh client assets were actually part of the Celsius balance sheet and if you had your Investments I guess staked on the Celsius platform uh well I guess it probably last port of call before you're going to get your Investments back if you're lucky at all um so it just shows you a lot of the a lot of the money management of the crypto space is not set to the same standing standards as the Securities and banking space so I believe that will change materially in the coming years so where are the institutions in digital Finance right so adoption has been Limited at best what have we seen so far is um most institutions have probably been buying uh Bitcoin and ethereum so sorry most institutions have been buying Bitcoin on ethereum uh or funds have been investing into uh I guess Bitcoin and ethereum ETFs uh we've just seen uh I guess one of the most interesting ones is that we've just seen BlackRock announce that their Global allocation fund so 15 billion dollar fund is uh fun it's fun mandate has been adjusted just so that it can now invest directly into Bitcoin so that's quite an exciting piece of news I I remember very early in my career so some 20 something years ago uh when Dart pools were first getting going uh one of our biggest problems for institutional Finance adopting uh leveraging the benefits of Dart pools was none of the fund mandates it allowed them to trade in an off Market extend exchange or venue so I see the adoption of institutional finance and certainly the fund industry and cryptocurrencies having similar problems so seeing one of the first movers like BlackRock move into this space is a huge milestone for the industry and maybe finally institutions are arriving and I suspect that once we get one or two of the big players on board that we will see a huge herd effect and the I guess the the current sub trillion dollar market cap for cryptocurrencies which is primarily uh I guess more than 50 is Bitcoin and ethereum combined I think that that's certainly that side of the cryptocurrency space will continue to grow um but this is a not Financial advice and certainly do your own research as everyone says um so what has uh what have institutions also been accessing is they've also been entering into the digital space primarily by private and public equities so what what do I mean there so aside from the public equities for ETFs um and some public listed companies which are lit they're a limited handful of like mining companies and exchanges and marketplaces that are listed around the world um most of the other investment has been through private investment so private Equity investments into some form of digital asset industry ecosystem player um are we going to see more I suspect that a lot of the institutional players are looking for strategic investments into the digital ecosystem they either see it as an extension of their current business or a way to reinvent or innovate around the current core platforms and as I mentioned so direct tokenization uh Investments sorry direct token Investments has been limited primarily to bitcoin and ethereum um clearly Bitcoin has its own story in terms of like the general thesis as to why it has value um I won't go too much into that right now uh ethereum has a huge ecosystem of companies that build services and products that create value for the protocol so um in many ways that the valuation model for ethereum is much easier to explain than Bitcoin um so and the rest of the the cryptocurrency community I think is still trying to work out is it a security is it a utility token is it some form stable token um or is it some other token that has some form of value uh my set my view certainly is that most things that look or smell like a security are gradually being directed that way by most Regulators around the world and I can't really see us going back from that so this is all about to change um well that's uh why we're all here right so this whole um elephant in the room with regards to yes that can institutions adopt uh digital assets is really really interesting question and uh rather than me go and explain that that's just to have a quick snippet uh from Larry finker BlackRock this technology is going to be very important I am I you know look at it we have been part of the huge revolution in investing through ETFs we believe that ETS will be changing the whole way we invest many people still use it as a means well people are investing it for indexing no they're the majority of people were putting money in an index and ETS or active investors that are buying exposure the entire bond market is being transformed as we talk right now I believe the Next Generation for markets the Next Generation for Securities will be will be tokenization of securities distributed Ledger that we know every beneficial owner every beneficial seller we all have our our code of who's buying who's selling instantaneous settlement and think about it it changes the whole ecosystem right um so now we've had from Larry um and my view is much aligns you that the time is now for asset tokenization um the the Tailwinds for asset tokenization let's talk about some of these so staking treatment um sorry staking treatments by Regulators is heading towards being classified as a security so most staking products have been generating some form of yield in the hunt Fields I guess that's what's Driven a lot of interest into investments into uh crypto yield generating products however they do look like two things one and they look like a some form of security in terms of the benefit that they generate and they also look like a collective investment scheme so I believe under the under the microscope scope over time that a lot of these products will be put into this bucket by regulators and will have a much more robust regulatory framework around them um this is kind of exciting for investors to get around because the certainly if you think about the the products or the platforms like your Celsius had there been better regulation around some of these your generation products investors might be able to more easily get their money back or the the intermediary placing the assets into some investment strategy may have taken less risk or had better risk management practices to protect their investors so tokens without a proper bankruptcy protection this will definitely be looked at much more closely in the light of FTX and Celsius um certainly yeah again it's all about regulation uh right legal Frameworks uh write regulatory handling of Clan assets and risk monitoring protect investors so it's a no-brainer there institutional interest in tokenized assets and securities is certainly On The Rise as I mentioned just now we've got you know we've got Larry Fink and his firm's uh certainly a fund allocation directly to cryptocurrencies so clearly still a big believer in cryptocurrencies um and also the talk just now on asset tokenization that all assets uh everywhere will become tokenized and that's only exciting for all of the people in finance to be able to see some form of crypto like attributes in the security space I think I think that will actually be game changing for markets um we are still in the first Innings of security tokenization the early adopters will at least the ones that survive the early adopters will read the benefits from the next wave of the digital Revolution so the question for you for you guys are considering investing into the next digital asset Market boom or the if you've missed the crypto one then certainly my viewers the future of asset tokenization is going to be the tokenization of securities so are you still curious about digital asset markets um I hope this presentation has excited you in some way or form uh so what I'll do is I have to do a little bit of an introduction to some of the things that I'm working on right now which might be interesting for you guys to explore um so food science certainly believes in the future of Finance in a world where all assets everywhere are tokenized so that we can own and interact with the value that we own over the internet then our mission is to build Financial foundational infrastructure and technology that will create this reality a few interesting initiatives that we kind of kicked off is uh building a blockchain network for institutional Finance uh where I guess Brokers can seamlessly meet on our platform and interact with each other in a more Securities like nature um we're building an Institutional uh tokenization Bridge called token Bridge which basically allows you to deposit any Securities and and investment in paper form where we can issue digital Securities on your behalf um so taking the hard work of tokenized Securities and doing that for you certainly we're helping you with the infrastructure with a regulated platform and a licensed digital Securities Exchange for you to exchange Assets in primary and secondary um offerings and uh access to a network of institutional uh or providing access sorry for financial institutions to access Alternatives um digital assets so if you're interested in any of these kind of initiatives that we're working on please come and have a chat with me after this um and if you want to learn anything more about asset tokenization as well um so a little bit more about our ecosystem we've got three kind of pillars and one blockchain so token Bridge is a is a platform built for Originators and deal makers and asset managers so if you effectively want to issue your own digital security this is the DIY toolkit and platform for you to do it yourself food science exchanges are regulated digital exchange where you can come and trade those assets and build your own uh private Marketplace if you wish to so you can run a public or private Market on this exchange block query is our wealth management on where all the b2c customers of our digital platforms uh trading and investing from blottery is just one of the Brokers sitting on food Saints change like any other broker that joins our Network food science exchanges are institutionally designed uh blockchain for clearing and settlement of security tokens and even cryptocurrencies and if you want to find out a little bit more about that please come and have a chat with me later so if you're still wondering uh how you can participate in the tokenization of assets and how this relates to family offices and or your family office please uh get in touch with me um I'm sure that we can we can share and explore certain Solutions and ideas with regards to safeguarding of your assets how to access I guess the digital asset Market structure through a more regulated and safer means and if you're looking at better distribution or your new liquidity to invest into some of your current Investments and leveraging the power of tokenization I'd love to have a chat with you contact details on the left if you have any questions about tokenization email us at business fusion.com dot Co and I'm also running actually tokenization or asset tokenization workshops over the next few months so please contact us via that email address and let me know that you're interested in participating uh follow me on LinkedIn