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tv   Tech Check  CNBC  November 11, 2022 11:00am-12:00pm EST

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guarantee for five days and another three instead of seven >> i was talking about having been there eight years ago, i think you and i would have dinner together. been a long time eunice, thank you. that will do it for us have a great weekend, everybody. tech check starts now. welcome to tech check. and today we continue to follow the collapse of ftx and drop in crypto prices. new this morning ftx commencing volunteer bankruptcy proceedings. [ inaudible ] transition process. and kate rooney is with us to help us kick off the hour. you have been digging through the bankruptcy filing. what have you found even at first glance there is an estimate of a $10 billion to $50 billion in
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liblgts? liabilities >> and i'm told that that could change it is hard to mark up some of the liabilities. also the shear amount of companies. so 134 affiliates are listed here the parent company of ftx technically, but it ranges in the countries. so the global impact of this is likely much bigger than any of the big braups cases we've talked about or alleged or potential fraud cases in the case of theranos these are global companies so the reach is massive and the other number, more than 100,000 creditors. so these are individuals on the platform that are owed money it will take a long time to really parse through some of the issues here. and experts in the bankruptcy area have been talking saying that it is one thing to restructure a bank, one thing to figure out what is going on with a brokerage firm but with crypto, a lot of the currencies have been moving, it
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is hard to track them even though it is supposed to be the transparent technology >> and you can do all the due diligence in the world but you may not know that the ftt token was being leveraged against another investment and so we've seen some of the chips start to fall, there will be a lot more in the days answer weeks and months ahead >> companies bailed out earlier this year, companies that had really relied on a bailout from ftx, some of the venture funding, venture backed companies. the question is where is he going to get liquidity, will he go to secondary markets and try to off load some of the shares and startups he has really invested in most of the ecosystem and so a lot of companies are nervous about what this means.
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they all have their own version of, hey, this is what we've lost even lps say why didn't you do the diligence and how did you not know about this. so the ripple effects will likely play out over months and weeks in terms of the long term effect here. >> and kate, good morning. i'm going to ask you one of those questions that reporters can't answer directly. but maybe you can give us a sense what you are hearing because i think investors need to think about this straight should investors pull their money out of crypto exchanges because it is not clear the degree to which any of them is solvent and should they reduce their exposure to crypto overall? >> i'm getting that question, john, from a lot of people and just friends and family who are looking at this happening saying what does it mean for my money and my cryptocurrency. and you had brian armstrong coming on and saying essentially making the argument that it is a publicly traded company. companies here in the u.s. are
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publicly traded have said that you can look at our balance sheet, they have $5 billion or $6 billion of cash on the balance sheet and they have said that is enough argument from a lot of people is that it is risk free to move your money off of these exchanges and you are seeing withdrawals in other places. it is really leading to a lack of trust in some of the centralized entities a lot of offshore exchanges that are seeing a good way to make a decent yield it is affecting trust. same thing with any currency only thing that gives it value is the fact that people think that it is valuvaluing so i'd say it is leading to a lot of jitters in the markets. >> the whole industry essentially built on confidence because there aren't actual assets >> hard to value >> kate, thank you and leading up to today's chapter 11 filing, okx turned
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down the mogul after as much of $7 billion not receiving any financial statements and joining us nouw, okx managin director and your relationship began with sbf before ftx's founding. try to unravel it for us and i guess most relevant to our audience, when and what was sbf's ask for you over the last week >> yeah, obviously we have a very long relationship with sbf. we have institutional relationships. and so i think the conversation is just basically around -- it was around the time november 8th hong kong time asian time around really around 2:00 or 3:00 a.m and so basically the conversation was about hey, what
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is going on, basically what we're feeling is that everything out of control but in the really extreme scenario, they might need some help in terms of cash or credit. that is what we understand back at that time and so our stand is obviously we do want to help and we want to stabilize the market, so, yeah, that is what we need to do and we try our best. >> and was that ask before or after the now infamous tweet from cz saying that he was going to sell his stake in ftt, his ftt coins and did he ask you for billions of dollar, do you have billions if you could if you wanted to help in the situation? >> what he asked is november 8 very last day of everything -- [
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inaudible ]. so after a couple hours which is very early morning time november 8, we just woke up and we see that we receive another conversation related to i think they are saying that the situation is critical. and so we do want to have more help and so in that case, we kind of asked them, hey, sure, what kind of numbers are we talking about. and what we understand so far, just conversations that we were -- >> it was billions, right some just to put it simply, he asked you for billions >> yeah, a couple billion. >> so let's talk about your business, your ability to even get that amount of money how do you now shore up confidence and not fall subject to the same fate as sbf and sam?
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you have a market cap of over a billion dollars, correct >> yeah, yeah, no problem. yeah first of all, we never used okx. >> how do we know that >> how do you know that you never used oxk collateral. >> very simple because we don't run any trading business very pure exchange business. and it is very easy to say that it is very based on our proof of reserve, right you can literally see how much is received via okx. and it is easily seen by a third party. and so if you can verify hat, meaning that we didn't use that, otherwise very easy to see that. hello? >> kate, i think i still have you with us. i'm curious to know your
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thoughts about how the process of investing fresh money now into the space, whether that is retail or institutional, is going to be different from here on out given the results or the events really that officially begin today. >> the risk appetite is absolutely dinged. on the retail side you've seen that in terms of a lot more caution raising cash and really sitting on the sidelines it has hit bitcoin a little bit, but it has been baked in and sources say that the bankruptcy announcement was really inevitable. a lot of people expected that this would be the outcome. on the institutional side, i'm told that lot of hedge funds have their money locked up sam in august said that there were power traders, those trading $100,000 or more at a time and so if you think of those players, those are hedge funds,
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those are the big wigs and what you would think of as the smart money in the space if you are using ftx as their go-to platform, these guys all coming from a quad trading firm, they built a product that those power traders as he called them wanted to use and ended up getting burned >> and we'll hear from some of those later on about what diligent they did and what they saw and didn't see and over the last few days we've been questioning this question the contagion of this and how this is not a big black eye for the rest of the crypto industry in terms of not repeating the same mistakes. he didn't have a board for example. do you have a board of directors? >> yeah, we do have a board of directors. so basically going to be regulators everywhere in the world. so everywhere in terms of our
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shared bonus structures and how we rec latgulate our incorporat and understand it. and it depends on the perception of -- >> where do you publish that board of directors i couldn't find it this morning. is it on your website? >> it is going to be published, we're in the process of getting the license. >> okay. you also talked about getting an auditor within 30 days are you talking to auditors now, are you talking to one of the big four accounting firms or even in what jurisdictions are you talking to auditors. >> we're essentially hiring someone with experienced to handle -- to understand what is going on to glorify our balance.
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and so what we're talking about is signing, signage of all the firms and publishing the results. >> and more broadly do you think that there is a need for the tokens that are allowed to be traded on your platform to have, what you call proof of reserves or be audited, stable points for example, does that need to happen to the industry as a whole? >> i believe especially major exchanges that have billion of dollars of access, i believe that that will become the industry standard. >> lenox, thanks very much for being with us. and now that we have you with, we'll hopefully talk more about this, but again, we're talking about sort of internal almost very granular developments regarding ftx but i wonder is the more important story sort of the things that cz is worried about and what he calls the kascascad
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effect >> the ripple effect is the big worry. some describe it as the house of cards. in spring you saw some of the counterparties in the lending market get hit and that did take multiple weeks to play out it felt like every other day or week somebody came out and said buy the way, we have exposure to three arrows which was the hedge fund that went under and pulled down a lot of companies with it. one of the issues is transparency you don't always know who is lending to who, who shake deals is making deals in the back end. a lot were crypto companies, but as the asset class becomes more accepted on wall street, you are seeing that cross over so who has exposure here i think the thought and fear is that you are likely to see more cont contagion, a bit with prices in cryptocurrencies but again hedge funds and more institutional investors as well. >> kate, stick around.
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our next guest does face exposure to ftx saying he does not expect for his firm to recover the nearly $77 million linked to that exchange. and joining us on the phone, alexandria digital ceo who was on squawk yesterday and your anger was evident. i'm wondering how your emotions and your thoughts aboutevolved >> macro guys don't stay angry long we try to be rational. and so this is bad for the system like, period, right? the whole system is built on trust. but all finance is built on trust. and we had a trusted counterparty for a lot of people that turned out to be something that, you know, wasn't advertised yesterday i mentioned it felt like elizabeth holmes or theranos and it very much does feel like that, employees of his own organization to investors to
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counterparties and so while it is in some ways the economic impact is less than three arrows celsius blocked by that first wave, in that way, you know, unfortunately for the small guy, most of those losses were retail. deposit ters and a lot of them losing $50,000, $200,000 but it was tons of losses spread out amongst a lot of people. and ftx was the institutional liquidity provider and so big institutions, you know, we lost 4% of our equity, so we can certainly survive that we've got $1 billion of cash and $1.5 billionly liquidity it pisses me off, but it won't new york us out of the game. but i have other counterparties that have lost 30% or 40%. and, you know, institutions on the leverage, institutions around high cost rates
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and so i think that in some ways this is a lot worse for the infrastructure that was being built up for people to buy, sell, lend and promote coins and so it will be a setback. it doesn't end crypto by any stretch. bitcoin and ethereum have big diverse communities, a ton of people working on cool projects. there is capital that wants to come into the space. and usually these events, when there is blood on the streets, it is somewhere close to buying opportunities. and so today, the next month, two months there will be a buying opportunity in bitcoin, ethereum, and in building the economic referendum. >> that is kind of the theme that jpmorgan goes with today. collapse of ftx might prove to be the catalyst that moves the utility value two steps forward. and they point out all the
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recent collapses have come from centralized players and not from decentralized protocols. do you think that makes sense or is that pollyanna? >> i've been talking about that for a while. i think that we'll go into two different buckets.ized places tt live under regulatory regimes. i'm a canadian listed company. $77 million. no lack of transparency. this is our cash and this is our earnings so the counterparties can look at the financials and realize if i lie i'm going to jail. the unregulated centralized, you know, businesses and we've seen a lot of them, you know, got up to a lot of the shenanigans. protocols are transparent.
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what has stopped the explosive growth has been when you are trading on those exchanges, you are not positive who your counterparty is. so if you take kyc seriously, there is a receipt sans to using it and so we need to -- i'd bet in the next couple years that you will see defi really take off. >> as an observer, i'd say the stars of crypto are largely the exchanges, right, and the people who have started or are running these exchanges and part of the reason why there is so much he thinks tattention in society at large is because the prices of various cryptocurrencies have run higher, and they have run hire because of these changes which seem in some cases to be
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the problem. so how does that sort of get untangled? >> listen, you know, if you ask me who the number one star of this ecosystem is, it is vitale who has morals and not in it for the money. and second and maybe the first should have been the guy who kind of gave the gift to the world and disappeared. and so i think at the core, the real stars are the guys that have been building the infrastructure that we're all going to use for generations you're dead right there are charismatic users that built the exchanges. first was a giant casino, right? a speculative thing that you can trade. no surprise that the biggest users were asian where gambling is in more in the dna than it is
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in the u.s it is part ofof the culture thee and so they were really playing to giving this new generation something to speculate on. and that has been dented. i think that you will see different participants >> and i think back in july when bitcoin was above 20 k, you said the worst was over and that bitcoin would surge at least that is how bloomberg quoted you now at 16,700. and if we're in a situation where there has been a bit too
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much gambling, what confidence should traders, investors have, that this is somehow a good level? why shouldn't they just wait for all of this dust to settle and see who is a really principled contributor to the ecosystem and who is not >> remember most investors certainly have bought bitcoin or bought ethereum. and those ecosystems are alive and vibrant. prices are lower because chairman powell was raising rates. one of the shames if this fiasco hasn't shown up, prices would be a lot hire now that the fed has-- or the cpi number has come down. but that was the bet people were making there were a lot of other tokens and nfts that had wild speculative ideas. i think that was mostly driven by free money for everyone and that wasn't going to come back and so listen, investors look at
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the horizon, bitcoin is a really important asset because governments around the world are trending towards populism. and populist governments spend more money than they have. that is the bitcoin story in a nut shell. and they are playing ethereum because ethereum is being used more and more to build this new infrastructure and so i don't think that those two main stories go away i think that it will take time for confidence to get rebuilt. i think that if you go on to fidelity website or their -- they launched this new bitcoin -- or crypto program for their retail, and if you go on their reddit page, it is brilliantly done and they will slowly educate their customers as we've been doing the entire time we've been investing. >> that is one part of the ecosystem. but we're focusing on the part .
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you are also involved and burned by tara lieu in a oig. why should investors trust you and galaxy digital >> we have been very candid the entire time we've been in business we invested in tara luna very early and expedited the position along the ride warned investors that there is no free lunch when you are building up an ecosystem this big based on and the algorithmic stable point and so again -- >> but, mike, you exited those trades, yes, galaxy digital did. but not the retail investors how do you reconcile that? >> you know, when you have manias, people do dumb things. and you can tell them whatever you want to tell them, they will make their own decisions >> but haven't you had a role in
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that mania >> i'd say i've had a role in promoting the whole ecosystem. i think that i've been very measured at -- you can look at all my price predictions they are not always up i say things go down and up. we're survived because we've sold >> well, that is a good position to be in, but there is a lot of people out there who may not survive this, who won't get their money out of ftx or tara usd. >> and i feel horrible i'm angry. it is interesting, it is very hard for people to not get snookered when you have someone as, you know, as respected and kind of -- you know, sam was the poster boy of the whole industry and it wasn't just retail investors, it was sequoia and polygon and the government of singapore and everybody else who looked at him, did diligence,
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bought in, and thought that he was an honest guy. turns out that his behavior was not. so it is hard to -- it is hard to risk manage that, right you know, we have very close ties to a lot of people that work in his organization and he was on the stage of robinhood three weeks ago and i spent 30 minutes talking to him and you would have thought the world was as rosy as could be and he had all these plans it takes a special kind of guy to go up there in your bermuda shorts and floppy hair with no respect for decorum of the place, but that is the style he is pitching, and behind it all you have a house of cards. about so he played the big scam in the same way better bernie mo 236789 f did and others.
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this is why in the long run putting things on chain and defi is an amazing idea because there is no lack of transparency people are snookered and there is not transparency. it is a damn shame but i don't think that it will end the industry by any stretch. >> appreciate you coming on and we hope that you will do so with increasing frequency >> all good. coming up after the break, a lot more on the fallout, what it means for regulation in the industry industry the dow now down 260 at ameriprise financial, more than 9 out of 10 of our clients are likely to recommend us. our neighbors the garcia's, love working with you. because the advice we give is personalized.
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don't like surprises? [ watch vibrates ] proactive notifications from fidelity keep you tuned in all day long. so when something happens that could affect your portfolio, you can act quickly. that's decision tech, only from fidelity. welcome back here is what is happening that the hour vote counting continues in key midterm senate races
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latest batch of votes in arizona helping mark kelly pad his lead over republican challenger blake masters. and cortez masto is closing in on laxalt who she now trails by three points both races remain too close to call and russia and ukraine are burning through artillery shells at a rate not seen since the korean war officials say they are firing a combined 24,000 rounds each day as the fighting rages on many believe both will need to restock during the long winter to come. and joe biden speaking in egypt, he discussed a new supplemental rule that crashes down meth emissions. >> and my commitment to this issue has been unwavering. today finally thanks to the actions we've taken, i can stand here as president of the united states of america and say with confidence the united states of
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america will meet our emissions targets by 2030. >> 2030. jon, back over to you. and let's turn now back to crypto and risk assets which have been having an effect on the overall markets over the past several days. we'll look into what federal agencies might do to better patrol the space with us now, s.e.c. commissioner hester pierce. welcome. and first, the chair gensler has said most cryptocurrencies are securities does the collapse support that based on what you are seeing out there? >> well, i can't talk about specifics of what -- of ftx, but we'll say generally that we have taken a very broad view of what securities are the chair has, and i think that that is in backed up by oureffort to provide clarity on what securities are just making broad
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statements is not sufficient so this is really a call to action for us to work on providing regulatory clarity >> and yeah, i mean, you criticize the s.e.c.'s overall handling of crypto saying that the customers aren't in the room, the competenter tos aren't in the room with you and the regulator has the leverage because the regulator is about to bring an enforcement action and it is just not a good way of regulating. now, i mean, i've seen the crypto industry the last two or three years frankly drunk it looks like on its own valuation driven power and from my point of view, saying on the one hand they want regulatory clarity, but on the other hand they want to dictate the terms. they say hey, we want to do crypto lending or we'll call you out regulators or crypto currentities aren't securities even though you say they are so what is the healthy way of handling that back and forth >> i think this moment is a
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learning time for lots of us both regulators and people in the industry who splay invested may have investeded in certain companies and projects and may be rethinking that but i think having a normal process where you have the public about engaging with the regulator through a rule making process or through a general exempt democratic iive process, yes, understanding that they have an economic interest in what they are saying but you need to get the input of those involved >> and do you think the s.e.c. has done enough to protect ordinary investors in crypto or has the regulators hands been too tied
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have you done the best within your ability >> no, we haven't done the best. actions years after the fact are not really the right way to go enforcement is certainly part of what we have to and i think some of that has really been important. there is a lot of fraud in the crypto space and we've been able to go after some of that, but i think that developing clear rules and helping people who are trying to do the right things, figure out how to do that, that is what we really need to be c doing. obviously some of this is on the industry itself and i don't think that we need to wring their hands and wait for us to regulate there are things that they can be doing proof of reserves, thinking about the value of uncha cuncha. the purpose of conservarypto is away from immediate year and so what we've seen on unchain analytics, that can be
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helpful. so that transparency is really useful >> is that another way of saying that the rollout of a specific regulatory framework does not need to have come any sooner than it has? >> oh, no, certainly we should -- i mean, i've been saying for the last four years that we should be developing a regulatory framework my point is just that while we have a job do that we haven't been doing and i'm hoping that this catalyzes us to do this, to undertake the actual regulatory process, there also is a lot that can be done by people in the crypto industry themselves to provide protection. and you know, the ones that i think we're all particularly concerned about are retail customers who may get caught up in things that they don't really have the power to change >> yeah, that is certainly happening. hester, thank you. still much more to come, we'll have more on ftx and how
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to play some of the exposed names. good luck. td ameritrade, this is anna. hi anna, this position is all over the place, help! hey professor, subscriptions are down but that's only an estimated 15% of their valuation. do you think the market is overreacting? how'd you know that? the company profile tool, in thinkorswim®. yes, i love you!! please ignore that. td ameritrade. award-winning customer service that has your back.
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check in on your current speed through the xfinity app today. the exchange had several notable partners from tom brady to kevin o'leary he said that it met his own rigorous standards and joining us this morning is
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kevin o'leary as part of his ambassador partnership and you too being this investment in international and u.s., i got to ask for your reaction today >> um, obviously one of frustration. no question about it i'm still a huge advocate of the potential of block chain and cryptocurrencies i'm disappointed like many other shareholders in a way, though, i always try to find what is the outcome of something like this. i mean, yes, i'm a shareholder international. that is a zero it is not the first time i've made a bad investment, probably not the last time. but luckily i make more good ones than bad ones but i learn from my mistakes what is going to happen now is that there won't be another situation like this for institutional investors ever again. we're simply not going to put capital to work until this stuff getting regulated. and what is occurring, and i'm
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just one voice in it, what i'm going to be doing is i'm going to fly to washington and i want regulation i want it now. no more delaying this putting tremendous pressure on the s.e.c i think a bill like the stable coin transparency act which has been floating around forever, we have to stop doing this to ourselves. as an industry it has to stop and also it is time to move forward with regulation. and that is -- this is the bottom of the crypto market. a massive player goes to zero. and now you build from the ashes. that is the up side. i'm still going to invest in crypto i lost money in the accounts there, doesn't stop me from buying more and i'll take advantage of the fact that most of these currencies have absolutely been beaten into the ground as a result of this and probably a buying opportunity. that is the way i look at it
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>> what do you need to see on paper before you would put fresh money into the space again an actual bill >> yes i want to see -- i'd like to start with one thing i don't think that we can solve for every single asset in crypto i want to do one thing and that one thing is to pass the stable coin. the stable coin transparency act. one thing. because that allows us to use the u.s. dollar as a payment system i would use that in all of my businesses every day it is far superior to ach, far superior to swift, far faster, more transparent, 100% audible all i need is the regulation that forces an audit every 30 days and guarantees me the backup for this is treasury bills less than 12 months in duration that is one thing. very simple. that would signal to everybody around the world that regulators here in the united states are taking crypto on, starting to
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put rules in place, starting to put the guard rails on no one is going to play ball in this space until we get it done. >> i'm kind of stuck on your comment that you are so confident that it can be the bottom how can you be confident of that, what do you know about cz, aboutme bnb coin, how do you know that it is not leveraged? we just had someone from another exchange who hasn't even published their board of directors, you invested in ftx and that wasn't a wise choice. under you did due diligence, but clearly it unit wasn't enough. >> you know, no, i mean, look, it was a terrible investment 100% and i lost my money i get it i'm a diversified investor i make mistakes. this is one of them. but it won't happen again. if i'm going to put serious capital to work in a broker dealer, in an exchange, it will
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be one that is regulated and has transparency and the same rules of test that every other exchange that deals in stocks and bonds has. because, you know, everybody is saying the same thing. it is great to be a retail investor and trade in crypto so good for them but every snufgs oougs al instr will say i'm going to wait for the s.e.c. or whoever it will be, the fed or whoever to regulate this stuff. this is actually a turning point for this industry. it is a maturation that is what will happen >> and again my question, how can you know this is the bottom? are you saying it is the bottom for institutional investors or retail investors what do you know that you can say that they will trade for retail, but the fact is this is the largest exchange in the world, all the more larger because it just took out a
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competitor >> binance has not have i indicated their accounts they could just extract it, butt it back anywhere where they want i'm sure he's getting a lot of calls and they will want his assurances and he will have to play by those rules anyway at the end of the day, the gold rate, the prize for crypto is to be regulated in the united states of america and have the same assurances that other exchanges have and other assets like stocks and bonds and commodities and options and futures and everything else. we all want that now and i don't want to hear anymore as an investor from any regulator that they are studying the problem. they are going to get to it one day. that day is now. it is now time to regulate this. and let the bows and arrows and
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all the issues be put ford and accelerate it. the pressure that lawmakers will get on the hill, not just from me, but from thousands of others that want to see the u.s. lead in this innovation there is a lot of great technology here. why do we have to be so slow in regulating it? that is the question and i think the sacrifice of ftx is to wake the lawmakers up and to say 32 billion erased because we can't seem to get our act together, that is over we have to regulate this thing and billionses will flow into it but right now the problem is there is a lot of value left in ftx. the accounts and the technology and hundreds of millions engineers spent making it still has value. and any software fund can pick it up, but they won't. the dialogue happening this morning is that they have to know what the regulator will do about this if you put $2 billion or $3 billionly liquidity into ftx
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right now and opened the gates, there would be an assurance at least someone now is managing and opened the gates, the would be an assurance at least someone now is managing it but they won't make a move until the regulator does because all of the sovereign wealth funds, s&p, only index in the world that could absorb $1 billion in ten minutes -- i've already talked to them no one will play ball until the regulator moves. this is a chess move the regulator has to regulate. >> certainly what one s.e.c. commissioner told us a few moments ago. but i wonder, what do you say to investors who say bein look, i t separate my concern about intermediaries from the actual your honor can city itself or even block chain >> you can question the merits of crypto as a result of this, but this does not taint the value of the bitcoin as a
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preservation of value. what it taints is the lack of regulation, the policy that led to this. and we don't have a policy i won't stop harping on this issue. i'm just one voice, but believe me, those of us that support this industry and invest in it have many other investments. i haven't lost my enthusiasm for the new technologies that are emerging and authentication and on the chain i've lost my patience with the regulators that is what has happened here today. >> kevin, got to hand it to you for coming on. it can't be an easy day. good to see you. kevin o'leary, thanks. >> take care baffles me that the crypto crowd is blaming regulators for their own bad behavior still to come, much more on the crypto exposed stock aleng
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regulators their own bad behavior
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welcome back turning back to crypto with all this major fall out from ftx what is in store for the stocks in the space joseph, thanks for being with us this morning talk about the public companies involved in crypto, the robinhoods, the coin bases of the world. less chance for them to be cross dabbling in the kinds of things ftx was. does that make them stronger and
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tell us maybe they have less chance to make profit here >> i think it's a double-edged sword, really. firstly you have the issue the volumes and interest in volatility are going to go down in the space, which is clearly a massive negative for a lot of these companies that are operating within crypto currencies, but that also does provide an opportunity for others to take up a larger share of the market as the second largest derivative has filed for chapter 11 definitely two sides to these companies. >> how much risk is there within crypto from the sort of pancaking collapses that we've seen from stable coins to now ftx? is it at all clear how stable the existing sort of anchoring forces in the crypto ecosystem are, and what happens if either there's another run or if q4
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turns out not to be so great in terms of holiday spending. how much is the ecosystem really at risk? >> i think there's a serious risk of broader contagion to the ecosystem itself, i think it's unlikely that contagion spreads towards broader financial markets, and that's mainly because of the size of the crypto space, which is only around $830 billion in comparison to the $43 trillion u.s. dollar equity market. but within crypto currency it's unclear as to how far and how deep this goes you know, contagion can last for a significant amount of time, and with the amount of companies that are involved and the amount of investments involved with ftx and following chapter 11 it could take a long time for this to resolve, which we have yet to find out about >> it's interesting, joseph, you know, a lot of people it's easy to throw around sort of monikers
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to incapsulate the moment. leeman moment is one that gets thrown around in this crypto today. it's going to be markets working it out and i wonder how healthy you think that is over the long-term. >> that's something we've published as a city research grouper. and the last time we published on this was celsius and luna obviously a major problem without a clear back stop to preventing further contagion obviously with the collapse in 2008 there was a lender of last resort in the central banks and the lack of one in crypto currency, it almost seems ironic now that we were previously thinking that sam bankman-fried and ftx were providing some sort of lender of last resort optionality to voyager and
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potential bids and now it seems there is no significant lender of last resort, and that's why i say this could take a long time to resolve >> joseph, thanks so much for your insights. more ftx fallout plus the more ftx fallout plus the latest headlines about twitter back when i had a working circulatory system, you had to give your right arm to find great talent. but with upwork, there's highly skilled talent tech check's back in a moment. from all over the globe right at your fingertips. it's where businesses meet great remote talent and remote talent meets great opportunity. ♪♪ ♪ this is how we work now ♪
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healthcare. one more thing this morning, more executive departures at twitter on reports elon musk teased a possible bankruptcy filing for the company next year let's bring in julia boorstin to parse through the headlines. we've got the executive exits, obviously his memo in the meeting. what's most important today? >> oh, there's so many things to dig through here, but if you look at the key executives who have reportedly left in the last day or so, chief information officer, chief compliance officer, one would expect these
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three executives would be evejs to twitter's compliance with the ftc. the comments we got from the ftc regarding these departures and some comments from elon's lawyer we're tracking with deep concern, no ceo or company is above the law and companies must follow our consent decrees our revised consent order gives us new tools to ensure consent compliance and we are prepared to use them. carl, i'm so curious to see how this plays out twitter would presumably to be issuing updates and reports to the ftc fairly consistently. the question now is who would be the people at the company who could do that? and in terms of that bankruptcy question it is my understanding that twitter -- i'm sorry that elon musk has some payments on his loans due in april of next year, so we're working to learn more about that. but the question is sort of what happens between now and april. >> julia, it appears that elon
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musk is continually running into rea reality versus his plans the work from home and product changes seem to be causing some executives to depart who he might not have wanted to depart. his rapid product changes seems to be leading to changes on the platform he doesn't want to see. and now he might be running into ftc compliance issues with his speed of iteration am i getting that right? >> yeah, i think there are a lot of headwinds here. and also from what i understand talking to some big brands that had been meeting with him to -- elon musk wanting to reassure those brands that he has things under control and is going to create a safe environment. i think there's a lot of questions from those big advertisers when they're going to feel confident ramping up spending on the platform again >> julia, thanks it's almost impossible -- we could have done the whole show about twitter even though it's
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no longer public obviously bond market closed today for veterans day don't forget to thank a veteran. we'll see on monday where those reopen and what's happening with yields because there was a lot of movement overseas obviously dollar weakness here in the states. next week about earnings again as we get more retailers maybe a granular read how the consumer is faring have a great weekend let's get to the judge all right, carl, thanks very much welcome to "the halftime report." the future of the rally following that incredible day for stocks can it keep going until the end of the year possibly beyond that, we discuss that with the investment committee lieutenant jim labenthal, a veteran of the united states navy a tradition for us on veterans day, we honor you, honor all those who served it's great to have you here. >> you're very gracious and you and the network are not only supportive o


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