Aug 4, 2023

European crypto asset manager CoinShares released its latest earnings report earlier this week and saw combined revenue, gains, and other income for the second quarter rise 33% from the previous quarter.

Video transcript

European crypto asset manager coin shares released its second quarter earnings uh results this week and saw combined revenue gains and other income for the quarter rise 33% from the previous quarter. Joining us now to discuss this coin share, Ceo Jean, Marie Muti welcome Jean. Thank you for having me on the show. I'm glad to have you here. So uh explain it. It's a pretty significant growth number here. Uh What, what were the big drivers here? Look, it, is it a pretty significant number? It it is we're looking at a, a year last year which was an exceptional losses as well. So it was, that's why we get a, a pretty significant uh I would say junk, however, it's fairly in line with what we were expecting, we delivering in line with our expectation and exactly where we should be. So uh nothing out of the expectation more a confirmation that we are focused on execution and executing only. Um That's it. Mhm All right. Uh you know, a recent sec filing uh suggested that coins shares is planning what appears to be its first hedge fund open to accredited uh us investors just tell us about that. Uh And the effort to get further into the US market. Now, look, II I love the way people are tracking every single funding which is happening everywhere. Uh If I was to comment on that right now, I will make a misrepresentation, so I won't. But you know, uh we do plenty of funding in the US. We have plenty of vehicles. So just one funding more or less is not really a big difference. No, no iii I understand that there is, I understand that, you know, everyone who is filing with the AC C is very careful about what they say. But what I'm trying to understand, yeah, for sure, fair, fair enough. Um But what I'm trying to understand is that the 23 things happening, right? At the same time, there is there is this interest in, in the US that seems to be according according to some fading, people are going offshore apparently because of the actions of the AC C. But then again, you have these filings that are happening in the ETF space in this spot, Bitcoin face in, in your space. Clearly, it doesn't really make sense. Now, look, look, look from, from a country perspective. Uh We are a European and quarter business. Uh We have grow our business in Europe, we become European leader uh and we are very proud of this position. Uh However, our European leadership is not enough for us and we have global ambition. So we want to become the global leader in asset management. So uh we have to uh you know, we can't just say it, we have also to action and execute on that. So, you know, we have planned to obviously come to the US and come to Asia and you know, we just need to visit on this. So, you know, when people, when people leave the US, we don't think leaving the US is the right stuff. You know, we, we're naturally contriving people. So when we see everybody saying we're leaving the US, we almost feel like actually it's a good time to go into the US. Interesting, interesting. You're playing, you're playing with the market when it's down, I understand. Ok. In the first quarter, coin share has announced the creation of an active asset management business line. What's the status of that? It's in development and we make further announcement in Q three and Q four on that specifically, uh, you know, was really born out of active asset management, my business partner, Danny Masters and myself Lounge, the very first uh regulated hedge fund back in 2014 called Gabby PLC. This is very cool closed down in December 17 and we returned to our investors, 849% net of fees. It was a fantastic hedge fund. We were very proud of it at the time. Uh But we didn't manage to scale it. Uh So that's why we started because the market infrastructure were not there, no bank, no custodian, no infrastructure for for administration. So it was very difficult to scale. So we decided to move to something scalable, which was a passive asset management, which we scaled very well. Uh At the end of the bull market was managing around $7 billion for its clients. So starting from zero, it's in 2016, it was a pretty significant growth and we are now in a position where we have rebuilt all the infrastructure to be able to go back to the market, the very risk, risk managed approach and with a level of services. So we feel the time is right now to be able to re engage on the asset management. So speaking of risk, uh we had uh earlier in the week or, or, or this past weekend, we had the uh situation with curve uh where uh basically uh an issue with the, with, with some of the coating ultimately led to an attack on several of their liquidity poles. And, and of course, uh it, it required the founder to come out, come in and bail them out. This, this seems like an existential crisis for D I. How does that translate uh for you when it comes to when it comes to risk management, et cetera when you have things like that. And of course D I is still a small part of the crypto markets, but nonetheless, the contagion possibilities were, were, were, were severe. So what do you do in that situation? And how are you dealing with risk? That kind of, first of all, what is very important to understand, what is the nature of this risk? You know, the the kind of protocol or risk we're talking about here is beyond uh I would say the wrong coding of the protocol. It is down to the compiler level, it is down to the misuse of a function. Uh A log was placed properly by using uh I would say a high level lock instead of something which has more granularity and more low level. So it's a very technical thing which happened on which happened by effectively the language which was used to write the smart contract or not smart contract, a Viper uh part of it. Um So it's a very technical element which you know, is the root cause of everything which has happened. Now, in the way we are monitoring these kind of things. First of all, our exports to is very, very limited because we want to be extremely cautious on what we have. Uh I think at the time of the hack or the exploit more than the hack at a small position on art. Um our RV position was immediately withdrawn and rolled out and we were out of the market. So it's more that that is the right control and policy in place to make sure you don't venture too much uh in, you know, uncharted territory and how you, you live with it. Does that make you a little shy uh to deal with the D I again, to deal with any DFI tokens, et cetera? Uh Knowing that there could be, uh you know, all these code issues that if people didn't really think, you know, if you had said, hey, there, there might be a problem with the compiler and that could blow up an entire uh exchange here. Uh I think actually what you're mentioning is much more than that because the compiler issue we're talking about, it doesn't need to affect just crypto it's, it affects everybody doing uh a lock on the function of the rails. So it's kind of like speaking to the high level um code coding language, which is used instead of using something which is more low level. So it can have effect effect and impact in much, much, much wider uh part of the industry than just a curve and, and the component I uh now the, the way we look at the, the way we look at the in general is on the risk uh on the risk uh on the risk based approach. So, you know, we have counter party risk, we have limit on protocol, we have protocol risk limit approach as well. And we are very, you know, we approach everything with a very high degree of skepticism which allow us to always be ready for the worst case scenario. You know, last year was exposed to lunar uh in some form. So we learned from our lesson and we improve and you know, make the right adjustment to avoid and be exposed to that. All right, thank you. Uh JM, that was coin ceo Jean Marie Motte. Thanks so much for joining us.

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