Zac Prince on BlockFi, Bitcoin, and GalaxyOne

0:00This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome? That's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online makes sense? There's no place like Chrome. Check responses set up require compatibility and availability varies 18 plus. For the first time ever, Yamavar Resort and Casino at San Manuel is giving away a new Rolex watch for every Club Serrano card deer. Play with your Club Serrano card and on September 20th, you could be one of five winners of a Rolex watch. Plus, all winners will advance to the finale at Palm's Casino Resort Las Vegas for a chance to take home a rarity. The second Mustang Dark Horse ever produced on September 26th. Two properties. Six winners. Only at Yamavar Resort and Casino. Your California to Vegas connection. Details at Yamavar.com must be 21 or older to enter participate. Please gamble responsibly. The balance sheets that Alameda was sending to Linder's BlockFi included were just false.

1:02And that there were Slack messages between Sam and Caroline where Caroline said, here's the balance sheet I'm about to send to BlockFi or another Linder. Sam would say it doesn't look good, give me other options. And she would create seven tabs on the spreadsheet, seven or eight tabs, all in kind of varying degrees of essentially lies. And then Sam would write back over Slack and he would pick the one that was like essentially the biggest lie. What's going on guys? Today we have a great conversation with Zach Prince. He's the managing director of Galaxy One. And in his conversation, we talk about what happened at BlockFi, what lessons did he learn, what happened to the industry during the war on crypto, what are the lessons that he took from BlockFi and other crypto banks. And it is implying it today at Galaxy One, what do they do? How can they help you? What are the risks? And why does he think that the traditional financial system merging with crypto has so many opportunities that you're going to be interested in? This conversation covers a lot. I think it'll have a lot of insights for all of you. And I really hope you enjoy my latest conversation with Zach Prince. All right, Zach, the elephant in the room, what happened with BlockFi?

2:04Not even a hello, how you doing? Good to see you. No, I'm pumped to be here. It's great to see you. What happened at BlockFi? So if we just think about what caused BlockFi to end in tragedy the way that it did, there were three big moments. The first was the regulatory action in the summer of 2021. Completely out of the blue, resulted in us having to turn off new signups from US customers for a period of time and a larger than we could have ever anticipated financial penalty of $100 million. Second, a few months after that concluded in early 2022, two of our largest competitors, we'll see us in Voyager, went bankrupt, that prompted essentially a run on the bank if you want to refer to BlockFi as a bank. About 85% of our customer assets on the platform were withdrawn. We withstood that, processed all the withdrawals, but the company wasn't in the best position at the time. Summer of 2022, crypto was in a bad spot.

3:04And we knew that we needed to either raise more capital or attach ourselves to a bigger company and ultimately the process that we ran concluded with us getting acquired by FTX. FTX, ultimately, everybody knows how that ended, but Sam is in prison now. I was a victim witness at the trial for SBF. For technical reasons, we weren't officially part of FTX yet. We were still an independent company. They had an option to acquire us within a year, which they were planning on exercising. We were still an independent company, so I stayed on as the CEO of BlockFi through the confirmation of our bankruptcy plan. Funds were ultimately, all the funds that were available were ultimately distributed back to creditors. I think that process is fully wound down at this point in time. But it was a tragedy. I mean, we delivered a ton of value for customers while everything was working and operationally working. And learned a lot, learned a ton about what types of things I want to do next, business

4:11growth strategies that work and don't work, risks to avoid, pitfalls to avoid in terms of building a business in crypto or Fintech more broadly. And wish it would have ended differently, but that's not the way the cookie grumbled ultimately. I don't think people quite understand a couple of nuances that you mentioned there. In 2021, I think it was, if I remember June or July of 2021, you guys got a letter from I think it was the state of Kentucky, if my memory served me right. And they essentially accused you of the interest bearing accounts being some sort of like yield security. Unregistered security. Unregistered security. Okay. When they did that, it just became this like every state that, you know, it's like, oh, that sounds a great idea. Let me lob one in as well. It actually started in New Jersey. And then within a week or two, there were, I think eight states that had essentially copied and pasted the order from New Jersey. Okay.

5:11So, you see, I got a bad memory. Kentucky was one of them's not that bad. Okay. All right. As this happened, you shut off knee-sure acquisition in a lot of these places. That, it puts stress on a business because you're not growing, right? But it wasn't like, oh, we need the new customers to take their money and give it to all customers or anything like that. But then the final outcome of a bunch of these regulatory actions slash with the federal regulators was this $100 million fine. And, you know, I had kind of a different perspective than other people because we were investors in the company, I had assets in the platform, et cetera. And when this was happening, I think that the thought process was like other companies who had gone through this, their fines had been significantly smaller, you know, a couple of million bucks, $10 million, something like that. But the $100 million was like a substantial amount of the capital on the company's balance sheet. And so you immediately go from really a position of strength on the balance sheet to immediately

6:11a position of weakness because of government action. You can debate good, bad, indifferent, but like that materially changes the position of that company based on that action, right? Yeah, absolutely. And there was, there is precedent for this with other Fintech companies. If you look at companies like PayPal, who went public at a time before the money transmission licensing framework was finalized across all of the states as, you know, internet-powered mover of funds, a lending club in the online lending industry had a similar tussle with the SEC about whether letting consumers invest in loans through a website was a security or not. And in just about every case outside of crypto that you look at, the fine was not significant relative to the size of the company's balance sheet if it was a market leader in a new category valued at north of a billion dollars like BlockFi was. The other thing I would highlight about that regulatory action is we, we were not a company

7:13that was trying to avoid regulation. BlockFi was quite the opposite. We had state level licenses, federal level licenses. We had been searching for a period of time to find a structure that worked for this functionality that we were providing of earning interest on crypto. And we were actually close. There's kind of two categories you can go and you can go and banking regulations or securities regulations. We were close to something on the banking regulation side that ultimately blew up as a result of, you know, SEC or state securities regulators actions. So we were kind of choked off from that path that we had been on from a regulatory perspective. The fine was larger than we expected. And you remember this very well, I'm sure we were in the middle of a fundraising round, literally in between all the docs have been signed and all the money has been wired. And half of $500 million had already been wired by investors. But ultimately the regulatory action happened during that funding window.

8:14And you know, investors understandably got cold feet. We ultimately restructured the round and gave everybody the option to not participate in the round if they didn't want to, which downsize the round dramatically. Well, I think you're being very kind and we don't need to rehash names. I think that there were some investors who had signed documents and re-nigged. They basically were like, hey, we don't want to be part of this. You can argue, I think two sides. One is there's new information. And so they want to change their mind. I think I come a little bit more from a school of thought of signing that contract. You kind of wire in the money regardless and you know, get your hands dirty and try to fix it. Not everyone does it that way. I definitely think that the regulatory action had an impact on the fundraise. Now I did not know, and this is the first one here and this, that 85% of the assets got withdrawn when Voyager and Celsius went down. That is a lot. If you said to me that there had been assets withdrawn, of course, but 85% is a huge number.

9:19At our peak at BlockFi, we had a little over 14 billion in client assets on the platform. So that was roughly summer of 21 timing by May of 22 when Celsius and Voyager collapsed. That had drifted from 14 down to about 12 billion in client assets. Still a lot. In the first two weeks post, Celsius and Voyager blowing up, we went from 14 to two in the 12 billion down to two billion. And we processed every withdrawal during that time frame. And so when you get down to the two billion, you continue normal operations. And then that's when the FTX stuff really kind of takes hold. Yeah. I mean, so running up to May of 2022, we had switched the company from growth mode to profitability mode. So the company was actually profitable for the first time in its history for a few months leading up to May of 2022.

10:19When the assets left the platform, that took us from being profitable to not profitable anymore. We were making a lot less revenue. We were still, you know, solvent and had plenty of assets to continue operating as a going concern, but it was clear that on a 6, 12, 18 month time horizon, somewhere along there, we were going to need to bring more capital into the business, which kicked off of a fundraising process, but also an M&A process in parallel with the fundraising process. And ultimately, the conclusion there was that the best opportunity we had was an acquisition by FTX. What was the conversation with Sam? I talked to Sam. You know, we, BlockFi did a lot of business with their team. That was less Sam and I working directly with each other and more our institutional lending team and the Alameda team within FTX. I spoke with Sam two times before the acquisition got done.

11:24In each conversation, he struck me as, I mean, certainly socially, a little awkward on the spectrum, however you want to describe it. But I mean, look, if you went back and you said you can create any business, you know, on the planet in like 2018, 2019, 2020, 2021, a crypto exchange would be on the list of businesses that you would create. I mean, they're literally a, they're money printing machines. And so my view was that this guy had built what was quickly becoming a real threat to buynance for, you know, potentially the largest crypto exchange platform in the world. He had a money printing machine. I had gotten advice from numerous people that one of the things to do in a, in a financial crisis when you're running a business like BlockFi is attach your boat to a bigger boat. Something that can weather the storm. And FTX seemed like as good of a place as any, maybe, maybe even a ideal place to bring

12:26a business like, like BlockFi so that we had the capital to complete the work that we were doing with the SEC. Our settlement with them wasn't just, hey, we're going to pay you $100 million. It was, we're going to pay you $100 million in register our interest account as a security. It's going to be the first product of its kind that's issued fully legally as a security. And we were going to see that out within FTX. Employees were, you know, going to continue working. We were going to integrate the platforms and bring some of the products that BlockFi had that FTX didn't have onto the FTX platform, which they were excited about. And that's what we were doing for, you know, roughly a handful of months before FTX blew up in November. How'd you find out? I was out on paternity leave and I, you know, got calls from our team, basically. That said, have you seen the news about FTX? I had seen some chirping on Twitter, but it had never crossed my mind that the money wouldn't

13:27be there. You own a money printing machine. How do you not have the money? How can you, you know, mess that up? But then through the process of being a witness in the trial, I was equoperating witness for the prosecution. I learned things. Maybe the most striking of which was that the balance sheets that Alameda was sending to Lenders, BlockFi included, were just false. And that there were Slack messages between Sam and Caroline, where Caroline said, here's the balance sheet I'm about to send to BlockFi or another Lender. And Sam would say, it doesn't look good. Give me other options. And she would create seven tabs on the spreadsheet, seven or eight tabs, all in kind of varying degrees of essentially lies. And then Sam would write back over Slack and he would pick the one that was like essentially the biggest lie. And that's what they were. So some of the things that I learned after the fact, when they sent you the balance sheet like that, like, well, there was BlockFi or other Lenders, right?

14:29I think one of the things that I take a lot of the folks on Twitter as take their critique seriously, but be careful putting too much weight on any one person. But I think one of the things that they'll be like, is a lot in you guys go look at the balance sheets. Why didn't you go look at their bank account? Why didn't you, you know, they'll kind of go down this whole rabbit hole of things. Like what was the normal engagement? And this is I think is important for some of the work you guys are doing at Galaxy now, because you've made a lot of changes, right? To kind of some of these products that I think is much better for the end investor through some of these lessons. But like, what is that, you know, kind of inter company relationship in terms of like the diligence you would do in some sense of balance sheet? Is it just like kind of take their word for it? Yeah, well, I mean, short answer on Galaxy. My risk appetite in Galaxy is risk appetite or wildly different than the risk appetite that we had at a company like BlockFi, no re-hypothication on our platform and no crypto lending, both of which were things, you know, crypto lending is really hard to scale, maybe even impossible to scale.

15:30Bitcoin doesn't produce a yield trying to get it to is very challenging. And as you scale, you're kind of forced to go out on the risk spectrum a little bit. But what it looks like, I mean, we had a risk management framework that was overseen by our board that included finance professionals from some of the largest banks in the world. There was the credit piece of it, which is assessing the financial health of your counterparty. And then there was the collateral piece of it, which was, you know, taking collateral as security for the loans. And in FTX's case, they were consistently within the crypto market, one of the best capitalized counterparties from a balance sheet and financial statement perspective, and one of the most willing to post collateral counterparties, which they did sometimes with, you know, Bitcoin and Ethereum in Salonabot also in some cases with the FTT token with other things. Today's episode is brought to you by token 2049. The largest conference in crypto is back. Token 2049 will host 25,000 people, 300 speakers, and a thousand plus side events in Singapore

16:32on October 7th and 8th, and Marina Bay, say it. The speaker list is absolutely stacked. Shane Copeland from Polymarket, Jeff Yahn from Hyper Liquid, Adina Friedman from NASDAQ, Arthur Hayes, Balaji, and Eric Trump. Crypto and traditional finance in the same building, which tells you a lot about where this is going, and the conference runs right into F1 weekend, so the whole thing turns into one giant week. If your head is Singapore use code POC 10 for 10% off your ticket, token 2049, October 7th and 8th in Singapore, go check them out in the link in the description. This is, I think we're talking about Block 5, but obviously there was Celsius Voyager right, the FTX, but also like Alan Lane, the Silvergate CEO, recently wrote a piece, and he basically was like, Silvergate was able to process every single customer withdrawal. He was still solvent, and basically my word is not his, but we got taken out back and shot because we were pioneering in the crypto industry. What do you take from, he's like a regulated bank, there's no like, hey, we're trying to

17:33figure out what the plan is, it's like, no dude, we are a bank, we are overseen by these regulators, and even he seems to be saying, hey look, there was some stuff that happened here that made people don't understand. I encourage everyone to read, I'm a big fan of Alan Lane's, read his sub stack post, it just came out this morning, it's a wonderful post where I think he shares more details about some of the things that happened at Silvergate that led to their voluntary wind down than he has before. But if you just zoomed out and you were reading a financial history book that said, hey, there were these pseudo regulated, kind of unregulated crypto banks that got created at a period of time. And during that period of time, some of the largest banks, including a top 20 bank, it wasn't just Silvergate. Silicon Valley bank collapsed during this same three to six month window of time. So traditional banks have collapsed. What do you think happens to the crypto banks? Anybody who's familiar with financial history would probably say, I bet the crypto banks

18:36went down as well. And then you add in the, that's just from a financial markets perspective. And you add in the regulatory lens and some of the things that Alan touched on, some of the delta between what you learned from FinTech lessons of the past and then seeing how those things kind of changed in their application from the regulatory posture towards crypto. I think there's a strong case to be made and a lot of people will have said and will continue to say that the regulatory posture was wrong. They got it wrong. I think I don't think they minced words at the time what they were trying to do. You know, they were recruiting a crypto anti crypto army. They were trying to kill crypto. They were trying to, you know, all those kind of stuff, whatever. I don't think we give enough credit for how successful they were. Like they did not stop Bitcoin. They did not stop, you know, kind of the major coins. There were certain companies coin based by an answer, you know, et cetera. But like even finance, like I would argue that finance didn't die.

19:38They were wounded, right? FTS died, right? So some of these other companies died. There was a lot of damage done in this kind of battle. The industry obviously has survived. But I also think that the new administration, many politicians about the right and the left realize like maybe it's not best to do the battle again, you know, because you're kind of poking the bear and obviously they saw what happened with, you know, the packs and in the different elections. And like it just kind of changed everything once everyone kind of like woke up from this battle and was kind of bloodied. And then everyone was like, all right, well, like maybe we should figure out how to work together. Well, and the question is what's your, you know, what's your goal as a regulator? I would argue that one of the primary functions is to facilitate society functioning well. And as downstream of that is, you know, consumer, certain levels of consumer protections with regard to financial transactions. And surely the crypto world that we live in now for things like Bitcoin where you have

20:40more options, including regulated options brought to you by folks like BlackRock and Fidelity and you have more publicly traded companies that operate in the crypto sector who are producing audited financials on a quarterly basis. Surely that's a better word or a better world. If it's a given that crypto is going to exist, which I think it is, it, you can't put something that's a new technology like this back into the box. And I just don't know that, you know, that, that full kind of option set was being considered with some of the decisions that were made at the, at the time. Now you can also argue the other side, which is maybe we've gone, maybe the pendulum has swung a little too far with this administration in terms of allowing certain things to happen, whether that's certain forms of gambling or, or things with meme coins. I mean, there's, you know, there's, there's arguments both ways. I'm generally a, don't let the ping, pendulum doesn't need to swing too far one way or the other kind of a person. I think that the government is very bad at intricacies and nuance.

21:41Totally. And you see it like, when there's nuance in this crypto stuff, right? So, you know, silver, silver gate, Silicon Valley bank, BlockFi, some other companies who objectively never committed any type of fraud went down while others who objectively did commit fraud, FTX, Celsius went down. And I think it's hard for people to distinguish between the two things and not just paint with a, a single brush and say all, you know, some fraud, therefore all companies in this category bad and we need to shut the whole thing down. One aspect that I find fascinating in society is we live in a very mimetic time. So you know, kind of the Democrat party, very anti crypto, Trump counter positions themselves and is like, I'm going to be the pro crypto guy. Then they're like, oh, you're going to be the pro crypto guy that a bunch of them are like, well, we can't be anti crypto, but let's be anti Trump crypto, right?

22:42And it's just like this constant like battling back and forth. I do think that there's a very large silent majority that is just like, create rules. Everyone shut up and get out of the way, right? But like, like we need the clear rules, right? Which is good. But no, weird way like the volatility back and forth between the political parties almost like helps to create the rules. It's just really painful for everyone who's building in the industry. Let's say, let's draw a line and say that 2022 or 2023 sometime in that time frame, there's like pre crypto war and then there is post crypto war pre crypto war. We could talk about it for hours, but post crypto war. I think that you, at least in our conversations, you kind of went through this journey of like, all right, what went wrong? What did I learn? What if anything do I want to do in crypto again, you know, et cetera? Talk about like the lessons you're taking and applying now for a galaxy because there's a lot of people who say, all right, I know Zach as the CEO of BlockFi. I kind of sort of know what happened, but I frankly, maybe even the conversation we just

23:44had is like helpful to better understand it. What do you mean that there's, you know, I can earn interest or any of this stuff? Is it the same thing as BlockFi, right? So just maybe describe some of the nuance or changes and then things that you guys have incorporated with Galaxy. So I mean, just personally, I initially went through a stent of basically needed to rest. I didn't work for about six months and then I think as part of my recovery process, I went and did something completely different from crypto, completely different from venture capital back tech startups, which is kind of how I broadly defined my work experience prior to crypto. And I was a, my first thing I did was I was the CEO of a real estate cost segregation study firm. So this is a tool that real estate investors use to optimize their, you know, after tax returns. And you know, what I liked about that was I liked the, I'm a personal finance nerd.

24:44I like the idea of helping people to understand finance, access finance in, you know, easier ways or ways that are more beneficial for them. So that was consistent even at the real estate firm, but after a minute, it wasn't nearly as exciting as, you know, building something powered by technology. And so I think post crypto war, personally, my risk appetite decreased tremendously for the industry and for myself. I think there's a lot more activity happening with crypto and things that excite me more generally speaking in traditional brokerage accounts than in the crypto market. And I say that from the perspective of a US consumer, I think for folks outside the US, there's still some very interesting crypto applications in terms of stablecoin adoption in terms of tokenizing different forms of real world assets, whether that stocks or other things and democratizing access to some of the things that we have here in the US.

25:46There's some infrastructure stuff here in the US where, you know, we can reduce settlement times, we can put things on blockchains and make them more transparent that I think could be interesting for parts of the securities technology stack. But for the average person who I was telling in 2015 on a blog that nobody read, you should get some exposure to Bitcoin or you should get some exposure to Ethereum. If you have, you know, liquid assets that you're investing in and a little bit of a, you know, appetite for risk. Now I say to that person, buy whatever brand you have the best affinity to between Black Rock, Fidelity, Bitwise and, you know, a couple other ETF issuers and put it in your brokerage account. And so I would say those are the two big things for me. One is risk appetite dramatically reduced. I'm not interested in having a tussle with regulators again. I'm not interested in experiencing some of the things that I experience trying to generate

26:47a yield on crypto that doesn't natively produce it via, you know, proof of stake. And I'm much more interested than I was back then in things like tax efficient investing via a brokerage account. Ways that you can optimize your personal balance sheet and position yourself correctly. Big picture utilizing some of the lessons that I learned from crypto. I mean, I educated myself so much on macro topics through the crypto industry. And so, you know, applying those lessons into building the platform at Galaxy One is something I've been doing for a little over a year now and it's going really well so far and we're having a ton of fun doing it. What is Galaxy One? Galaxy One is a financial app. We have a checking account product, brokerage account product, crypto product and a product called Galaxy Premium yield, which is like a private credit instrument where a credited

27:50investors can earn 8% on their cash. Where we're aiming to fit in the financial ecosystem is kind of in between a private bank or a traditional registered investment advisor in terms of the level of customer service that we provide in terms of the types of advanced investing options and overall asset and liability full balance sheet management for our clients in between that world and the world of Fintech. Where you can do things at your fingertips. You've got AI tools built into the app. You have everything kind of in one place and easily accessible to you. But what we're not doing in the app that is something maybe we'll touch on that a lot of Fintech apps are leaning into these days is stuff that's more in the category of gambling, whether that's prediction markets or certain forms of like super leveraged investment options that it's hard to see fitting into any type of long-term portfolio. So we won't be doing that stuff like a lot of Fintech companies are.

28:52It feels like the ones who are doing that are purely looking at it from the numbers and they're like total markets are exploding. I can charge people 5% and every time they trade an event-based contract. It's a great way to make money. I don't think platforms like that are where investors are going to manage large percentages of their long-term capital of their nest egg that they've built up for their family. You don't need that next to. I wonder how many of those platforms are even trying to get that money. My read is let's just take Robin Hood, let's take a Kowshi, let's take a Draft King, a polymarket, a fandall, even Coinbase has started to add some of these contracts, etc. I think most of them look at it as like, hey, we want the trading assets, not like we want your kids school tuition money. It's super extreme examples, but it's very much like a volume-based business versus

29:57more of a long-term oriented investor and just naturally a savings account versus a trading account. You're going to have different optimizations, right? Absolutely. Not saying that those aren't good businesses. They're right. Let's say I was an investor many of those businesses. I get it, right? It's just not where my personal interests lie. Part of that is probably just from the evolution of what I personally am interested in in my own investing. Today's episode is brought to you by Uphold. Are you someone who's tired of juggling multiple apps just to trade, earn, stake, or spend your crypto? Then listen up, because Uphold does all of that in one single unified platform. You can access 300 plus crypto and fiat currencies with an interface that works for you, whether you're a beginner or an expert. Uphold also features any to any swaps where you can swap crypto to fiat, fiat to metals, and tokens to tokens directly in the app. If you prefer self-custody, Uphold's vault gives you multi-stake security, key recovery, direct trading access, and peace of mind without giving up convenience.

30:59Uphold is also 100% reserved, meaning no fractional practices and proof of reserves are updated every 30 seconds so you can verify your assets anytime. For US users, you can even earn yield on dollars with the USD interest account. No fees, no minimums, and funds are insured up to $2.5 million through the Atomic Cash Suite program. If you want one app for your entire digital asset life, check out Uphold today. Go to Uphold.com to learn more. Uphold.com. Go check them out today. Today's episode is brought to you by SimpleMining. Bitcoin mining has a reputation for being complicated, risky, and hard to evaluate as a real investment. If you're considering mining in 2026, what actually matters is in headline profitability. It's uptime, repairs, and whether the operation is run like a real business. That's why I've been using SimpleMining. They're based in Seer Falls, Iowa, and they run a white glove hosting operation where you own your miners. You choose your own pool, and you have Bitcoin sent directly to your wallet. They were featured on the Inc. 5000 list as the fastest growing company in Iowa with

32:02over 40,000 machines under management. What stands out to me is execution. They have the number one rated ASIC repair center. And for the first 12 months repairs are included. If mining margins get tight, you can pause with no penalties. And if you want to resize or upgrade your fleet, there's a marketplace to resell equipment instead of being stuck. To help people think it through, whether mining actually makes sense right now, they put together a short resource called the 2026 Bitcoin mining blueprint. It walks through the five mistakes investors make when allocating the mining, and they also explain how to avoid them before deploying capital. If it sounds interesting to you, you can get it for free at simplemining.io slash pom. That simple mining.io slash pom. Go check it out today and see if you should get into the mining game. This premium yield, one of the things that I think I understand is it is for credit investors, they put their money in their cash, they earn 8%. I think what's most interesting though is Galaxy is backing the fund with their balance sheet.

33:08There's never no risk, but it is drastically reducing the risk than if they were just doing this with some private credit, which obviously a lot of people have had questions about with the marks or whatever. Yeah, first off, the reason that Galaxy is able to do this is because of their institutional lending desk, which has principal outstanding from the last earnings report of well-north of a billion dollars. A large portion of that is cash. As a result, crypto capital markets are still more expensive than traditional capital markets on a risk-adjusted basis, in my opinion. As a result, Galaxy can earn these yields through activities that it's already doing on the institutional side of the business. We capped the size of our premium yield product on the Galaxy One app at $250 million, which is just a fraction of its overall institutional lending book, and then Galaxy put a guarantee on it. In terms of how consumers actually interact with it, it started as a 60-day duration product, so you put your money in when you want to get it out, 60 days later it comes out.

34:12We recently reduced that from 60 days down to 30 days. The rate is also variable with 30-day notice. We haven't changed it since we launched the product almost a year ago now, but the rate could change with 30-day notice, and folks can withdraw their funds in 30 days. I think it's a great option for folks with short-term cash that they want to get an attractive yield on. With the backing of Galaxy, we've publicly traded on the NASDAQ north of a $10 billion market cap last time I checked. It's an attractive product. That's for like dollar cash. Correct. You also have a crypto portfolio lending product. How does that work? We recently launched a crypto portfolio line of credit product. That's for borrowing cash. If you have a portfolio either of just Bitcoin or Bitcoin, Ethereum and Salana, you can now borrow against those assets as a single portfolio on Galaxy One, at a rate below 9%, which to

35:17my knowledge is the best rate that you can get in CFI land in crypto. It's a flexible product. You can come in and out with no origination fees. You can pay it off anytime. It's monthly interest throughout the duration of the time that you've drawn on the line of credit. While you have your assets staked, if you're staking Salana and borrowing against it, you still earn the Salana staking rewards even while they're posted as collateral. What is Salana staking rewards? I think it's ballpark 6%. We're offering Salana staking. Galaxy also has a large business as a staking infrastructure provider to institutions. We're piggybacking off of that infrastructure and offering staking on the Galaxy One app. Because we're piggybacking off of that, we're actually offering staking with zero commissions currently through the end of the year. Compare that to 20, 25, 30% that you're paying in fees off of your staking commissions

36:22at a lot of other platforms. I could technically borrow at 9% or something, and I'm still earning the 6% on it. It's a blended 3% cost of capital. It's like one way to think about it. That's one way to think about it. That's very unique. You also have brokerage. We have a brokerage. The idea here really is to build kind of like a one app for all of your financial needs, but it's less focused on trading and speculation and more focused on kind of just like good timeless investing principles. Good timeless investing principles, full balance sheet management. The crypto portfolio line of credit, I think, is a market leading borrowing option if you want to borrow against your crypto. We'll be coming out with a similar option for brokerage account assets over time. I also think we'll look at different types of lending, whether that's real estate lending or other forms of lending to clients of the Galaxy One app over time.

37:27You have banking, brokerage, crypto, and attractive alternative investments all under one roof. I think we'll be doing other things that, I think there's a large audience. A lot of them listened to your podcast. You talk about self-directed investors and the tools that are available to them. I like this concept of unbundling the traditional registered investment advisor model. A lot of folks now are aware that paying 1% on AUM to an asset manager can produce quite a drag on your portfolio over the long term. There are pieces of what registered investment advisors do that I think folks are very interested in. They just don't want to pay a 1% fee to get access to all of those. You'll be seeing things from us around that theme for the foreseeable future with new products that we have in the pipeline. There's a financial advisor online.

38:27It's churping at me one day. I was like, who is this guy? Going to profile, go to the link in his bio, end up on some financial advisor somewhere in America, start scrolling through. I don't got time for all of this. CD80V, go and I just start, where's the fees? They charge up to a 1.75% management fee on the financial advising assets. Not like a venture capitalist who's like Hammond Alper from the market or whatever. Whether they do that or not for you to underwrite, this is just a pure financial advisor, 1.75. There was a discounted fees, the more size of your account, whatever. I was just like, man, in what world are people paying 1.75% to a financial advisor who based on his critique of me, obviously he's not that smart. I was thinking to myself, man, there's obviously great financial advisors.

39:27There's great firms. These people have built massive businesses. It is kind of crazy that in 2026, people are still getting charged in the same fees from maybe for kind average firms or average solutions in the market. Yeah, and a lot of times they're sticking you in a traditional 60-40 portfolio, which I would argue, for a lot of folks who have gone through the education process that you and I have, is not appropriate given the risk appetite of the client. If you're under the age of 40, I don't think you need a 40% allocation to bonds. Maybe even if you're under the age of 50 or 60 depending on your situation. You talk about bonds and fixed income all the time. I love the TLT chart. It really gets people going down 50% in the last five years.

40:27That's not real bonds. We're going to be on the asset side of bringing products to our clients. We're going to be re-evaluating some of those time-tested principles. I don't think it's too risky for someone under the age of 40 to be allocated to a portfolio that's 100% equities or equity-like instruments. Make that a step further, depending on where that person is in their life cycle of investing, is it a bad thing to put a conservative amount of leverage on that portfolio? When I say conservative amount of leverage, I'm talking like in the 10 to 30% range, not two, three, four, five X, like you can do with perp equities. There have been really famous researchers and professors who've written books and showed mathematically that that is the mathematically sound way to approach investing when you're young and you're earning years and you're building up your asset base.

41:31We're thinking about those things. We have products coming out over the course of the coming months that will help to illustrate this view and make this view accessible to clients of the app. In addition to continuing to have market-leading crypto products, continuing to add things in the banking sector, whether that's new payment functionality, one of the things that private banks do that I absolutely love is they make it really easy to send wires, which if you're someone who allocates to a venture capital fund or has to pay contractors for home renovations or something on a schedule, you might have to send a wire to every month and it is painful to type in manually. In this day and age, the fact that so many people still have to go to a bank branch to verify or manually type in wire instructions, there's also a lot of just these operational things that I've experienced personally and validated with other people that we want to help to automate

42:35and make way easier for clients of the Galaxy One app. Do you think that agents will do all that stuff in the future? I see people online that I tell my agent, go pay this. I don't know, I see a screen shot. I just paid, I guess the agent did it, this is a claim. Is that something that you guys would ever turn on? We're having a lot of debate internally around whether the main way that that should happen is through us having good essentially command line interfaces where we open up the app and enable our users to give whatever AI agent they want to use the requisite permissions within the Galaxy One app and then have an external agent instructing the app on behalf of the user or if it's to have kind of natively built into the app, AI agent like functionality where you can just say the same way you would to whatever AI system you like to use but within our app, hey, do

43:41X, Y and Z once a month or monitor these property tax bills and pay them when they're due. So TBD, we might ultimately end up with a mix of both. There are some compliance and security things that we're thinking through with the command line prompting for financial transactions that certainly could get risky if somebody has a third party AI that they give access to our system and then it does something that the user doesn't like. So we're working through that stuff but for anybody that doesn't know, Galaxy is an incredibly AI forward company. We didn't touch on Galaxy corporate at the outset but Galaxy essentially has two large businesses now. It's crypto business which started an institutional financial services and has expanded into retail with the Galaxy One app but it's also now in the AI data center business with a larger than five gigawatt power pipeline in Texas primarily at its helios campus but also Galaxy's

44:47now multi-campus now in terms of its data center sites and so I think there's really interesting crossover applications of those two things in time and the culture within the firm just generally speaking is incredibly AI forward. You guys just did the football stadium, right? Was Texas Tech? And I'm originally from Texas so this is near and dear to my heart. I mean I haven't been there yet. Yeah. I'm hoping that I'll be on the list for the Galaxy. I'll look store and get out there. I'll see what the heck. If I ask him, Texas is always going to record a podcast. I'll just go on the list for a game at some point but yeah, Galaxy Stadium in Lubbock, Texas now. It's pretty crazy. It's awesome. It's awesome. All right. Where can we send people to check out Galaxy One app? You can get there through Galaxy's corporate website as well or you can just search Galaxy One in any app store, iPhone or Android. We're also on Twitter.

45:49We have phone customer service, chat-based customer service. You can DM me on Twitter and I will respond to you quickly if you have any questions. We can also set up calls with our client service team. We have a US-based, super smart client service team that can talk about our platform but also just generally anything in the financial world that you're looking to talk about. I would encourage folks to reach out. All right. Galaxy One in the app store. Go check it out. Go check it out. Thanks for having me, Pomp. Thanks for coming and doing it. Good to see you.