Takatoshi Shibayama: 0:00

Hey, hey, hey, welcome to this week's episode of Blockhead's Blockcast. I'm your host, Takatoshi Shibayama. I'm also the head of APAC for Ledger. I aim to uncover the creative, intelligent, and radical minds who are shaping the crypto industry today. I'm as crypto curious as anybody that's tuning into this show. We're doing this together, guys. Let's go. Hey, welcome back to another episode of License to Shield, the offshoot of broadcast normal series where we discuss the weekly recaps of what is happening in the juicy world of crypto, the markets, and anything else that comes to our mind.

Takatoshi Shibayama: 0:39

Before we start, everything we say here is not investment advice, business advice, relationship advice, or friendship advice. Today, I have here with me Lisa J.Y. Tan, as usual, CEO of Economics Design, and we have a special guest, Hagen Rook from Gibson, Dunn, and Crutcher. Welcome to the show.

Hagen Rooke: 0:58

Thanks very much, Taka. It's a pleasure to be

Takatoshi Shibayama: 1:00

on. And we also have Valentin Fournier, the research analyst at Blockhead's research arm, BRN, with us today. He'll give us a market commentary at the end. But today is actually the fifth day after the MAS notice came out, clarifying their position on certain things, and I'll dive right into it. So I'll read the first kind of bits from their notice. From From 30th of June 2025, DTSPs, meaning digital token service providers, providing services solely to customers outside of Singapore, not just inside of Singapore, relating to digital payment tokens and tokens of capital market products will be needed to be licensed.

Takatoshi Shibayama: 1:45

So this is a pretty big drop for the crypto community, especially in Singapore, because, well, for most of us, we weren't thinking that if we're providing services outside of Singapore, need any digital payment license, but MAS has clarified that even if you're not servicing Singaporeans, we need to get licensed. And FYI, the providers of service in relation to other tokens, such as those only used as utility and governance tokens, are not subjected to licensing. So that's a little bit of a twist at the end, but they also gave us a little bit of a personal comment saying that MAS has set a high bar for licensing and will generally not be issue a license. So, you know, it definitely has been a big drop to the community. You know, I've seen our crypto WhatsApp group blowing up on this. Everybody's sending their questions to Hagen.

Takatoshi Shibayama: 2:38

Hagen has always been in the forefront of all crypto regulations, and he's the guy we're all looking for. We need advice. You know, so what do you take of this? I mean, it's going to be a very open question from the beginning, but my general assumption would be like, okay, now all the digital asset service providers providers that are based in Singapore, regardless of servicing Singaporeans or not, now have to scramble and say, okay, by the end of the month, I forgot to say this part, by the end of the month, they have to cease their activity or get the fuck out. So this is an extremely short window of time. I think that it worries a lot of companies, and I'm sure a lot of people are trying to think about what to do next. You know, if I'm, let's say, like an exchange that's based here, I won't name names, but I don't have a license. Does that mean that I have to close down my office and move out? Is that how I should be looking at it, Hagen?

Hagen Rooke: 3:36

Yeah, I mean, Taka, that's exactly the way that people are thinking about it. I had a conversation yesterday with a journalist in the US who reached out and heard about this. He was working for a very significant publication in the financial services space. And he was saying, look, does this mean that it's the end of the crypto industry in Singapore as we know it, will crypto platforms in Singapore now have to shutter their businesses and decamp and move to other places like the Middle East and Hong Kong, etc. This is the way that I think this development is being perceived.

Hagen Rooke: 4:10

I would say at the outset, that is very much not the case. I think there is a question around, well, what does this regulatory development actually mean in regulatory terms, but also how has it been communicated? Has this actually had a sort of an incendiary effect from a pure PR perspective, the way that the regulator has communicated this development? I would say it's more the latter. The announcement on 30th of May caused a huge amount of concern, partly because it was very starkly worded, and partly also because it wasn't really expected by my of the industry. But the reality is that it only introduces a relatively incremental change to Singapore regulation as we know it.

Hagen Rooke: 4:59

So maybe just starting with the regulation. Singapore has had a regulatory framework since 2020 for crypto activities and that has applied to activities conducted in Singapore. And so you know, Singapore has a huge crypto industry now. You know, we're all based in Singapore on this podcast. We know hundreds of others who are based here. And, you know, they support very significant and substantial businesses. A lot of the US, actually, I would say most of the US headquartered big crypto exchanges, custodians, OTC desks have operations in Singapore, have done for a long time. And they have had to get licenses. They have had to, if they're not licensed, get themselves comfortable with not being licensed. They have generally been supported by sophisticated legal advisors. And so they would be aware of where they stand from a regulatory perspective. And this legacy framework that I refer to that applies to activities in Singapore already firmly applies to most of the most of the industry. And the industry has kind of known, at least legal advisors have known, that this additional development has been on the horizon.

Hagen Rooke: 6:14

Actually, this additional development that we're discussing here that was announced on 30th of May was first consulted on back in July 2020. So it's been almost five years in the works. And so it doesn't come as a surprise. The only thing that came as a surprise was that it was announced end of May. We didn't know exactly when it would be announced, but we even knew that we would probably be given around four weeks notice. So to say that this was a complete ambush on the industry, I think is not entirely right.

Hagen Rooke: 6:46

What does this announcement actually mean? Basically, the MAS made this announcement on 30th of May and then decided that maybe it wasn't quite clear enough. So it issued another clarification on 6th of June saying, okay, so what we actually mean here is under the legacy framework, there was a gap, right?

Hagen Rooke: 7:04

There was a loophole where you could be in Singapore and you could have people on the ground, any size of team, even very kind of substantial team, but provided that you were serving customers only outside of Singapore, the MAS, the regulator in Singapore, wasn't actually treating that as a service being provided in Singapore. So you were basically, throughout that whole legacy period, you were outside the scope of the legacy framework And the MAS is now plugging that gap. So if all of your customers are outside of Singapore, previously you weren't regulated, but now you will be regulated.

Hagen Rooke: 7:39

I think there will be a few businesses in Singapore that are affected by this, but the MAS itself has said, look, there are a small number. I think, frankly, this is probably some of the exchanges that operate here that have taken the view historically, they want to be in Singapore, but they're going to exclude Singapore customers from Singapore. you know, the scope of their activities so that they don't need a license here. That loophole is now being plugged. In a nutshell, that is it. I think this is going to affect a few businesses, but the reality is most businesses have been in the legacy framework for a long time now. So it's not really going to change all that much for most of the industry.

Lisa JY Tan: 8:20

So, Hagen, these are very, very good points, especially when these PSA licenses, these financial market securities, that has been in discussion since 2021. 2020 and also 2022. A lot of these exchanges, a lot of these centralized financial services have been preparing this for quite a while. Not everyone is fully prepared, but it's not anything new. Here's a question. How does MAS distinguish between centralized and decentralized crypto service providers? Does decentralized protocol, is this part of this act?

Hagen Rooke: 8:51

Yeah, it's a really good question, Lisa. So we have actually this week alone and since the announcement was made on 30th May been approached by quite a lot of DeFi projects that are concerned. Because DeFi projects do see themselves as kind of operating along the lines of this bifurcation where They have a team onshore in Singapore, but a lot of the protocol activities run through offshore entities. And so there has been a lot of concern that maybe this latest development would be aimed specifically at DeFi.

Hagen Rooke: 9:23

I think there is a question as to how a DeFi project is set up territorially, of course, how many people it has in Singapore, where its customers are, whether it operates through other entities outside of Singapore. That's a little bit fact dependent in each case. But there is also a question around Well, is a DeFi project, even if it does have a footprint in Singapore, doing anything that falls within the scope of regulation as currently defined?

Hagen Rooke: 9:50

Now, regulation in Singapore captures activities like dealing in tokens, buying and selling tokens, operating an exchange, arranging for the transfer of tokens, and also safeguarding tokens, or inducing buy-sell transactions where you're basically kind of bringing together buyers and sellers, but you're not in the flow of funds. Again, sort of out of those things, depending on what a DeFi team is doing on the ground in Singapore, there could be one or other that could be engaged in theory, but the most relevant tends to be the question around safeguarding because DeFi teams in Singapore tend to have a multi-sig and they tend to exercise that collectively where you have multiple individuals involved in the multi-sig and each individual will have a signing authority and depending on the policy, you might have to have three out of five signers or four out of six or whatever it is.

Hagen Rooke: 10:44

And the question then is, well, if you have those people in Singapore, are they exercising a safeguarding activity that should be regulated? Again, it's fact dependent because if they're doing that in relation to user assets, right? So basically they can control the blockchain address that holds user assets, assets of users that are using the DeFi protocol. You could say, oh, well, actually they control They are safeguarding those assets, right? They have control over them. The test might be, would they be able to conduct a rug pull? Do they have that sort of backdoor control?

Hagen Rooke: 11:17

But ultimately, even though you can ask yourself all of those questions, there is a fundamental question mark over DeFi in Singapore. And that is, is the current regulatory framework really right-sized for DeFi? Is it even intended to apply to these activities? Because as you can tell, by asking myself whether a multi-sig constitutes safeguarding of crypto, I'm kind of trying to push a square peg into a round hole. It doesn't quite fit. And so, yeah, we're kind of telling our DeFi clients that, their position or their risk position may depend on how immutable their smart contracts are, whether they have some semblance of control over the smart contracts or blockchain addresses associated with the protocol.

Hagen Rooke: 12:02

But ultimately, we're also saying, look, we don't have much guidance on this from the MAS. Actually, we have no guidance so far. And in the absence of guidance, you can err either on the side of caution, but actually you can also take the view defensively that many of your activities are not in the scope of regulation. And that's kind of, I think, where we are. It just happens to be a gray zone for now.

Takatoshi Shibayama: 12:22

And also it doesn't really depend on whether that company has a headquarters in Singapore or you just have a set of BD teams or account management teams. So as long as somebody is based in Singapore, this rule will apply. Is that how we will look at it? Or does it need to have like a registered company in Singapore performing these, even though that registered company in Singapore may not be the headquarters?

Hagen Rooke: 12:47

Yeah, it's a really good point, Taka. If you have a company in Singapore, then that is sort of a starting point for the Singapore regulatory frameworks. If you are employed by a company outside of Singapore, You don't have any kind of company here, but maybe you're just like one individual out of a whole global team and you happen to be supporting a company that operates outside of Singapore, then much less likely that you'll be caught by regulation in Singapore.

Hagen Rooke: 13:15

But let's just take the company in Singapore scenario. You know, we can also stick with a DeFi scenario. Many, many DeFi teams have their developer company, or I guess you could call it sort of their operating company, Opco in Singapore. The Opco will do a number of things. It'll employ people. either as employees or contractors, usually as contractors. It'll provide support services to protocol entities, typically entities that sit offshore in places like the Cayman Islands or Panama. Also, that entity will issue equity. If there are fundraisers, the investors will typically come in through that entity. The entity will also hold valuable assets like IP.

Hagen Rooke: 13:56

I think the question then is, okay, a lot of the activities of the DeFi team are routed through that entity. What is that entity doing and where are the customers? Of course, there is a complication here because customers in the DeFi space will not be direct customers of that Singapore entity. They'll be customers of the offshore protocol. So that creates additional complication. But basically, if you have a company in Singapore, you kind of need to look at, well, what is that company doing? Are the people appointed by the company doing anything that could be regulated?

Hagen Rooke: 14:25

And if so, are they providing those customers, so their customers in Singapore or outside Singapore with those services? Depending on what the territorial kind of setup is, you may be within the legacy framework, Or you may be sort of in the incremental expansion of that framework that's just been introduced. But it's also activity dependent. So again, in the DeFi space, there is ambiguity around whether the activities even fall into the scope of regulation. But the exchanges, if you have an exchange operating through a company in Singapore, the centralized exchanges, CeFi exchanges, they will be much more squarely in the scope of regulation. And they have to be careful in terms of how they assess their position. Yeah.

Lisa JY Tan: 15:09

I think we've gone through quite a few specific points that we've talked about. What would you say are the top three misconceptions people have about this FSMA and DTSP licences?

Hagen Rooke: 15:19

So I would say one misconception is that it is being brought in as a means of clamping down on the industry at large. That is not the case because, as I say, it only applies to a very small sliver of the industry. And I think that small sliver has known for some time that it is subject to these new rules. So I think if you've been in Singapore for a long time, you've assessed your position, usually with the help of legal advisors, your legal advisors will already have been future-proofing your structure, taking into account the new FSMA rules.

Hagen Rooke: 15:56

That's what we've been doing. We've been advising our clients on these for years. There's actually nothing new about it. That brings us to the second misconception, that this is new and this is an ambush on the industry. And the MAS is doing that now because because it's had a change of heart and it wants to double down in its bearishness on crypto. We should talk about the regulatory policy approach as well separately, but I would just say there is a misconception that this is sudden. It's not sudden. It's been in the works for five years almost. And so certainly legal advisors have been expecting it.

Hagen Rooke: 16:30

And yeah, I mean, the third point is... I guess, sort of one that I've already touched on, but I think there is a misconception that there is some kind of regulatory policy drive specifically behind this. There is, of course, but it's a relatively technical one. The policy reason behind this is really because the MAS wants to be entirely compliant with FATF guidance on AML. So FATF is the Financial Action Task Force, It's an international standard-setting body for anti-money laundering and counter-terrorism financing rules.

Hagen Rooke: 17:08

And back in 2022, when the MAS first consulted on this incremental expansion, it said the current framework, the framework that was basically the legacy framework from 2020 onwards, still has gaps in it. We want to plug those gaps because we want to be fully FATF compliant. So... Actually, the reason for this incremental change that we're seeing is a relatively technical one, is one that you can kind of understand, right? The Singapore government has always been very concerned about money laundering and terrorism financing risks. It's something that really does touch a raw nerve in Singapore, always has done.

Hagen Rooke: 17:51

And yeah, look, I think there has been a sort of a misunderstanding on the part of the industry that the MAS is somehow engaging in a more malicious sort of policy drive against the industry here. What I would say is, though, is I think a much better job could have been done and should have been done in communicating this change to the industry. Because clearly, if we're having this conversation here now, and I had a very similar conversation with a The WhatsApp threads and Telegram threads and various others are alight with conjecture and very anxious speculation around what all of this means.

Hagen Rooke: 18:35

The regulator has not done a good job communicating this clearly. And my view is that, you know, you can be strict from a regulatory perspective. There's nothing wrong with being strict. Actually, the industry wants strict standards. The industry wants to be regulated. Players in the industry now want to be licensed. I mean, unless they're a pure non-custodial storage solution, you know, Taka, for example.

Hagen Rooke: 18:58

But, you know, and there are many other technology service providers that shouldn't be regulated and aren't and will continue not to be. But those that are, you know, intermediaries and in-the-flow funds, the exchanges, the OTC desks, the custodians, they want to be able to say, look, I operate in a place where regulation is stringent and I meet the gold standard and I have this endorsement from a very, very discerning regulator, the MAS.

Hagen Rooke: 19:23

There's nothing wrong with that, right? I think the industry does want that sort of regulation, but I don't think that that means that the regulator should be sending signals that are fear-inducing. I don't think that's helpful. I think you can be supportive to the industry and be a strict regulator. One is not inconsistent with the other at all.

Hagen Rooke: 19:44

Now, that is where I think we should be doing much better in Singapore, where I think Singapore should be encouraging innovation a lot more. in tandem with regulating it. And we should also look to the US and look at what's happening there now because the US is embracing innovation. And I think it's very unfortunate that we are now sending this signal that we're not. There's no reason that we should be sending that signal and we shouldn't be sending that signal.

Takatoshi Shibayama: 20:09

Yeah. But it seems like MAS has clearly had people in mind already. So if I kind of look at the statement that they put out on the 6th of January, they said MAS had reached out to persons who, based on information available, may be affected by this regime change or this notice to ask about their orderly wind down of the activity. And based on available information they have, are very aware that it's only a very small number of providers. So clearly they probably had some company names in mind that they said, okay, I'm going to shut these guys down. But I don't think they were thinking about, you know, smaller players or maybe, you know, like DeFi in particular.

Takatoshi Shibayama: 20:50

This is my assumption that they were thinking about, you know, global centralized service providers that had an office here, substantial amount of personnel here, maybe, you know, CEO had an office here, potentially those kinds of things, right? Am I kind of understanding correctly? Because from the beginning of what you said, it's more about control, It's more about safeguarding assets. Is there a substantial amount of operations here that the MAS can actually see and find out that, hey, these guys are operating out of Singapore. They're not servicing Singapore clients potentially, and their contracting entity might be offshore. But regardless, it's definitely an operation that's set in Singapore.

Hagen Rooke: 21:35

Yeah. Well, I think with your hunch, Taka, you're bang on the money, I can't disclose much more because of client confidentiality but the kind of profile that you have in mind, I think is right. What is important to note is, you know, what the MAS says about this being a very small number of players in Singapore. So again, the MAS itself confirming that this latest development has a relatively small impact.

Hagen Rooke: 21:59

What I would also say is, sequentially, the way this all panned out was not, you know, 30th of May, there was an announcement saying, And then immediately afterwards, the MAS reached out to the players that were impacted by that and said, gotcha, right? It wasn't that way. Those players have been in contact with the MAS for quite some time now, for a much longer time. So I think those that are affected, again, wouldn't have taken this latest announcement as a surprise. Unfortunately, or maybe fortunately, those that think they're affected took it as a surprise, but won't be affected, if you see what I mean. But yes, I think your census to the demographic is bang on. Lisa, anything to add?

Lisa JY Tan: 22:44

Yeah, I think I have some things to add, but this might go over a bit. So from what I understand, there are few exchanges that have gotten a cease-and-desist letter that they have to move out of Singapore by the end of the month. And that is quite disheartening. And the second one is, I know we talk about how this doesn't include decentralized protocols for now, but I think that is something, it feels like a threat, feels like a looming threat, because if the act keeps expanding and it starts including decentralized protocols, what do we do now? What happens when the DAO has people in Singapore Or you have the operating company in Singapore, as you've mentioned earlier. What does that mean? Are we going to constantly live in some form of fear? Or do we say, you know, this is primarily for CeFi and DeFi and decentralized protocols are not really something that is in this act, at least for a good amount?

Takatoshi Shibayama: 23:34

Yeah, I think that's pretty very important because, you know, they said that they've been advising people from before and this should be of no surprise. So is there other stuff that they've been talking about that we haven't noticed that may in the future come out?

Hagen Rooke: 23:49

Yeah. Well, I think to Lisa's point around the industry living in fear, I don't think that's really where the industry should be, frankly. I think if there is any fear, then it's due to uncertainty about the trajectory that regulation will take. And it's due to the tone that the regulator has struck in its latest announcement. And I think that uncertainty is unnecessary. I think that tone is unnecessary.

Hagen Rooke: 24:14

What we want is regulation that is clear and we want timelines that are predictable. It doesn't mean that we are opposed to the regulation itself, but I think it's only fair to have clarity as to how exactly it should be applied to different industry players, whether it's CeFi or DeFi. Now, the fact that the MAS put out an announcement that was pretty stark in its wording suggests that the MAS is happy for the industry to kind of be deterred a little bit.

Hagen Rooke: 24:45

So I think that's what you're alluding to, Lisa, the fact that there is a sort of implicit suggestion that the MAS could take a view at some point later on in the future that, well, under these frameworks that now exist, Certain additional activities could be viewed as being licensable. And that is always a possibility. I would say there is always a possibility that the MAS does a thematic review of the DeFi community at some point in the future and says, okay, we know you guys have been in Singapore for the longest time. You're basically controlling and facilitating stuff that we don't like because we think DeFi facilitates money laundering. We think it puts users at risk. You're here in Singapore, which is not good for us reputationally.

Hagen Rooke: 25:32

All of these things, the MAS could in the future say, from a thematic perspective, we kind of want to look at this more closely. We're going to now say, you know, well, if you're a founder in Singapore or a group of founders and you exercise multi-sig rights, or you have some other control over the smart contracts associated with protocol, or you do other things, whether BD related or even just... operational support, but in some way you have control over the protocol, we want you to stop because we think that is actually regulated activity. You just don't know.

Hagen Rooke: 26:04

I think at some point, DeFi will probably have to face the music, but not only in Singapore, also in other jurisdictions. And when I say face the music, I mean... it'll probably have to reach a landing on how regulation applies to it. And we're just not at that stage yet. I think regulators are still grappling with the concept of DeFi, the concept of decentralization. If you look at the FATF guidelines, the FADF guidelines suggest that players should be regulated as VASPs if they have control over the protocol operations, or they are in some way financially incentivized, continue to be financially incentivized by platforms that they have developed and operationalized.

Hagen Rooke: 26:45

But at a national level, we just haven't really seen much specific guidance yet as to exactly how DeFi players should be regulated and whether they should be regulated at all to begin with. So my advice would be obviously seek legal advice, but we have been able to, I think, help a lot of DeFi projects structure themselves in a way that, you know, they can at least mitigate risk, get themselves comfortable that they can .

Takatoshi Shibayama: 27:14

Yeah, makes sense. And, you know, from what I hear from the U.S. nowadays, especially with the SEC chairman saying that DeFi is in the spirit of the Americans, you know, it seems like, you know, definitely even from this kind of comment alone differs vastly from Singapore's statement of where they want this industry to be in this country. And then also last week I was in Vietnam and, you know, this is not shilling, but yeah, it is shilling, but I was in Vietnam, and this year, it seems like the fifth largest country in crypto transaction volume is finally is going to start looking at this industry and potentially even put regulations in place.

Takatoshi Shibayama: 27:55

I was in the city of Da Nang and the city of Da Nang was inviting people who work in the fintech space, blockchain, AI to move to Da Nang with the promise of cutting corporate tax to zero, cutting income tax to zero, you know, subsidizing international school fees by 50%. 50%, you know, tons of benefits that they were throwing out in order to kind of grow this industry. I feel like there's going to be, you know, like a divergence now of countries who still remain you know, skeptical and, you know, protective about their own financial industry. And then once they're looking to kind of really open up like your device, you know, to grow, you know, new technologies. And I do kind of worry that Singapore might be kind of, you know, taking that, you know, step a little bit back by, you know, communicating in this way.

Lisa JY Tan: 28:51

Sorry, can I have one point? I've been talking about this with a couple of friends for a few weeks now. And this is the thing. In Web 2.0, cybersecurity was not new until in recent years. Every single company has a cybersecurity team because now we're trading a lot of money on these tools and cybersecurity. This is my regulation concept. This is my safety concept. And crypto, everything we do has a dollar value attached.

Lisa JY Tan: 29:14

As much as I am very pro innovation and go test things out and go try things out, we're not just talking about protocols and digits moving around. We're talking about actual money moving around. And I think there needs to be greater security issues and some level of safety where people can participate. Otherwise, you have a lot of problems that we see right now where they're grifters, they're scammers, and it really destroys the great value that this tool can build. This tool is really amazing.

Lisa JY Tan: 29:42

I came into this space eight years ago because I believe in the tool. The thing that this bothers me about is that people are using this tool to scam others, to extract value. And regulation is the only way, but one of the many ways we could have to safeguard this system. So I think it's very, very important. And the whole DeFi world or the whole protocols world, we think, doesn't apply to them because it's a whole libertarian system. Everyone takes care of themselves. Everyone needs to know you need to have your coat hidden somewhere and you have to take care of yourself. But the vast majority of the population does not do this. And part of the government's role is to build safeguarding rails to protect this set of people. So I think it's very, very important. It's good that we have innovation apps and sandboxes, but it's very important to have regulations in place.

Hagen Rooke: 30:29

Yeah, and not because I'm a regulatory lawyer, but because I think it kind of supports the reputation of the industry. If the industry is run in a sound manner and self-regulation works to some degree, right? I think the vast majority of players in the space, whether it's CeFi or DeFi, are reputable, highly sophisticated, very, very smart. You know, I love pretty much everyone that I know and I work with in this space. But you'll get the occasional bad actor that will taint the space, right? And the occasional big blow up that sets the industry back.

Hagen Rooke: 31:03

And I agree that regulation is kind of something that helps prevent that. And unfortunately, you do need some kind of state intervention. There is always the dream that in crypto, you may not need that. And it may be the rule of code over the rule of law. Unfortunately, we do still need the rule of law, but it needs to be proportionate. It needs to be fair. It needs to be done collaboratively with the industry. And as I say, you know, the industry itself wants it.

Takatoshi Shibayama: 31:29

Yeah. And also, you know, personally, I do think that regulation to a certain extent is necessary. But if you're talking about scams and rug pulls and et cetera, this is more of criminal law as opposed to regulation. Right. So, you know, we should definitely kind of look at, you know, that as a source of protection as opposed to regulation, because the regulation in general is about AML. and KYC and, you know, just operational safeguarding, right? It has nothing to do with scams.

Takatoshi Shibayama: 32:02

I think, you know, relying 100% on regulation to enforce or protect people from scam is a completely different thing. So I think those laws need to be a little bit more kind of, you know, in place. Obviously it is in place, but, you know, more in the forefront as opposed to people asking, you know, to over-regulate our industry because it does stifle innovation and we need a little bit more leeway or more of a sandbox environment to continue innovating in a safe way. So, yeah, well, thank you very much, Hagen, for your time. We're now kind of moving into the market's comment section, Valentin, take it away.

Valentin Fournier: 32:41

Hi, everyone. And here is your quick brief on what's going on in the markets and what could be coming next. Right now, we're seeing signs of a market pause as Bitcoin is reaching a resistance right below the previous ATH of $1 12,000. Inflation is cooling down with the core PC index getting closer to the 2% target. And while that is good news, rate cuts are not expected in the coming FOMC decisions. The Fed is probably going to be holding steady until at least September due to concerns around tariffs and inflation risks.

Valentin Fournier: 33:15

And on the investment front, institutional interest is still strong, especially for Ethereum. Ethereum ETFs have seen its longest streak of inflows over the last few weeks, while a Bitcoin ETFs saw a lot of profit taking last week. And that shift between Bitcoin and Ethereum means a lot. Institutions seems more bullish on ETH right now, while Bitcoin is just like consolidating below its ADH. Altcoins are picking up momentum in general, especially as Bitcoin slows down. And this performance is centered around a selected number of winners, like Hyperliquid, but also historically large altcoins such as ETH and Solana.

Valentin Fournier: 33:55

If ETH is leading the charge, we are not yet seeing the start of an alt season. as the rally remains fragile and Bitcoin lasts a little bit of momentum. As to what's fueling the current rally, I would say it's two big things. The first one are the improving macro conditions and notably the inflation dropping, but also the rising institutional adoption. So inflation keeps raining down and the Fed could turn dovish. That would give us a risk appetite that would grow and naturally push prices up. And also the combination of institutional buying through ETFs The current headwinds would be the persisting inflation and the political tensions, whether it is the tariff war or tension within the American government, like what we saw with Trump and Elon Musk. but there is also a worrying number of IPOs like Circle or Kraken. And this usually signals a local top as companies from the field are looking for an exit.

Valentin Fournier: 35:05

Now as to a general conclusion, We believe that Bitcoin could drift or slightly dip unless it breaks strongly above thousands on positive news like inflation cooling down even further, interest rate cuts or any other dynamic in the digital assets. And meanwhile, ETH and altcoins are gaining ground and we believe this trend could extend over the next weeks. Thank you.

Takatoshi Shibayama: 35:33

Pretty exciting to see retail coming back into the crypto market. If it's only Ethereum and a few others, I guess that's kind of like choosing the best or the quality assets over speculation. I guess that is a good thing. Indeed. Cool. Well, that is a wrap for this week. Thank you very much all for your time. Thank you, Hagen, again for joining us today on this episode. Thanks for having me. Thanks for listening. If you like what you hear, give Blockcast a like and a subscribe on your favorite podcast channels, Spotify, Apple, wherever they are. For all your juicy Web 3 news, keep updated on blockhead.co. You can also catch Valentine's daily views on the market on BRN. Catch you all in the next episode.