Contributed by: Nicole Liddy
Ben Yablon (Archive Interview & Transcript Pt. 2) | World Economic Forum – Davos, Switzerland
– SALT is a leader in digital asset custody
– Active in 45 states in US – 9 Countries worldwide
– Common Taxonomy being created by UN, WEF, & OEECD
Frank Ricotta (Blockchain Expert & Contributor, Traders Network Show): 00:00
Hello, this is Frank Ricotta and I’m here on the Traders Network broadcasting worldwide on Equities.com and we’re here at Davos 2019 World Economic Forum. And today we’re going to follow up with Ben Yablon, founder and chairman of SALT lending. Hey Ben, you know, there’s a lot of interesting aspects within the, within the crypto market and on the blockchain market in some really, really tough problems and salt is the as definitely addressed one of those tough problems and that being custody. Can you explain to our viewers what that really means?
Ben Yablon (Founder/Chairman, SALT Lending): 01:06
Absolutely. so, one of the most important aspects of crypto assets is the fact that they are custodial in nature, meaning that you can possess the assets yourself. If you have the private keys, then you have functional control over those assets. That’s an amazing and important phenomenon. It’s also very dangerous if you lose the, the key you lose the asset. So, in many ways what the crypto revolution has done is allow for the possession of unique and insular digital assets. But many people, I don’t want it to actually have that full control all at the time. There. There are many use cases now around requirements to safely store those assets with a third party. And, and how you do that and how you do it effectively is something that we’ve been working very hard on the last year.
Frank Ricotta (Blockchain Expert & Contributor, Traders Network Show): 01:35
I mean, there’s, you know, throughout the last year there’s been a handful of stories about people losing access to, to their currency potentially getting stolen because, because of other people accessing go their personal wallets, absolutely you think like a custodial service where you plan on holding, holding crypto is a addresses this type of problem
Ben Yablon (Founder/Chairman, SALT Lending):02:02
It does, it, it really creates a situation in which these assets can be stored safely and securely. And from the regulatory standpoint, this becomes a very interesting question as well. What we’ve seen over the last year is a framework developed globally spearheaded by the OECD around how to safely store and appropriately housed digital assets. And, and that’s vitally important. If you’re a regulated financial entity that’s holding these assets, you have a requirement to use a custodial service. So whether you’re just uncomfortable holding them yourself because it’s a significant amount of value or you have a legal and regulatory requirement to hold them with a custodian the demand is there that the market needs this. And very few other companies have approached it the way we have, we, we’ve developed something very interesting.
Frank Ricotta (Blockchain Expert & Contributor, Traders Network Show):
You hit something very interesting. And when you see organizations like the OACD and, and you know, you reside in militias, right in the Mauritius as a Mauritian government addressing this from a broad base regulatory issue and a service. So, what’s the difference between what is traditional custodial services in the financial market and the crypto custodial services? You know, what’s alike and what’s different.
Ben Yablon (Founder/Chairman, SALT Lending):03:00
So, it’s similar in that the, the legal requirements are very crossover between both paradigms, but the technical specifications around how you do this or, so this is unique key storage. And these are assets that exist digitally. There, there are not physical representations of these assets. So, unlike a traditional stock model, you have it, you have an actual stock certificate in many cases that that is stored in a particular place with a Bitcoin or with EETH. Wherever the private keys reside is where that asset would technically live.
Frank Ricotta (Blockchain Expert & Contributor, Traders Network Show): 03:54
And there, there is no such thing as reversing a transaction at this point in time, right? Once a transaction happens, it happened.
Ben Yablon (Founder/Chairman, SALT Lending):04:00
Exactly right. So that there’s full and final settlement. That’s an amazing and powerful thing, but it’s also a potentially terrifying thing and one that creates some systemic risks for regulated financial entities that are that are in the space now. So, in order to address that risk, qualified custodianship has become vitally important and insurance products coming in to underwrite the qualified custody are also developing.
Frank Ricotta (Blockchain Expert & Contributor, Traders Network Show): 04:28
All right, so let me turn the focus a little bit back to Salt. Because you know, and like many of your competitors, you actually have some really, really cool technology under the covers. You know, a lot of your other competitors are. It’s really just a pure service, you know, they’re outsourcing a lot of the actual custodial services, you know, salt, you know, salt took a different approach and we did it starting with a name. So, tell us a little bit about what, you know, not, not, you know going across the NDA line now can make you do that as we’re broadcasting around the world, but you know, what’s the special sauce at Salt? What makes your technology so special?
Ben Yablon (Founder/Chairman, SALT Lending):04:50
So fundamentally there were no tech solutions. There were no off the shelf solutions that we could go out and end deploy. We needed to build everything. And, and because we had to build everything, we’ve now have created the ability on for 2019 to be a major SAS year for us. We were looking at the ability to plug and play different pieces of our technology stack into many different traditional financial verticals. On the custody front. We have always taken a very strong stand on segregating accounts and many of the folks out there in the space aren’t doing that. They’re commingling the assets. And that’s not only dangerous, that’s not a good thing. So, we’ve taken a very strong stance on how you segregate these things, how each HD wallet is being generated is, is really, I don’t want to get into the secret sauce, but that’s what differentiates us.
Frank Ricotta (Blockchain Expert & Contributor, Traders Network Show): 05:44
Because you know, what we’ve seen from a security and vulnerability perspective in the industry when we’ve had these major breaches is because really the, it was the custodial service behind the scene. Are these common online wallets that were in essence hacked exposing the entirety of the asset base. Basically, we’re holding versus maybe just one wallet or one user’s account.
Ben Yablon (Founder/Chairman, SALT Lending):06:32
That’s exactly right. So, if you were to compromise a wallet on our platform, it’s one wallet. You don’t have access to anything other than what was held in that unique address. And that’s never happened. That is also never happened, which is a real statement on how seriously the tech team has taken this process and what a great job they’ve done deploying. Right.
Frank Ricotta (Blockchain Expert & Contributor, Traders Network Show): 06:45
So looking forward, what do you, what do you see both in the future from, from a market perspective and that in three dimensions here from a market perspective, from, you know, a regulatory maturity perspective when you see, when are you going to see some of the first major regulatory and policy guidance hit the street from the standpoint of adoption. And then finally, what do you see happening with this really cool platform we built with Salt?
Ben Yablon (Founder/Chairman, SALT Lending):07:36
Hm. Well I could go on for like an hour on, on this question. I would say that what we’re witnessing, first and foremost, that’s a vital importance is the introduction of a taxonomy. We, we have, you know, led by the OECD led by some of the folks at, at WEF and some guys at UN some agreement on common terms and common legal standards. And that, that cuts across the industry. That that is specific to how tokens are issued and generated. And that also touches on custody and how custody is going to be deployed in a, in a safe and compliant way. That’s probably kind of boring for some people. But if you’re in this business, that’s a massively important change because you really can’t scale a business in an atmosphere of regulatory uncertainty. So, as we see some certainty injected into these markets broadly through regulation you know, where to go set up shop and how to do it. So, it’s, it’s a tremendous opportunity for 2019 and we’re going to see a lot of M&A activity in 19 as well.
Frank Ricotta (Blockchain Expert & Contributor, Traders Network Show): 08:23
That’s great. And you know, again, without, without sharing something you shouldn’t. And what do you think the big, the big thing for Salt’s going to be this year?
Ben Yablon (Founder/Chairman, SALT Lending):08:32
The biggest thing resolved this year is going to be deploying custody. That’s, that’s on everybody’s mind. And really being able to meet the market demand. We had an enormous surge of demand early on. Last year was a very difficult year for cryptos. Generally, I think that this year we’re seeing things begin to turn around and correct. And the demand for products is ticking up gradually this time, which is good. I’m, we’re able to meet it.
Frank Ricotta (Blockchain Expert & Contributor, Traders Network Show): 09:00
You know what I find what’s very interesting, you’re definitely one of the companies that weather the storm, you know, from the, the highs down to the lows, you know, and it really takes some adaption to market to really survive. And I think you guys, you at Salt, you and the team assaults has done an incredible job in doing that. And not only meeting the demand of and addressing the asset back loans, but really creating and bringing forth some of the underlying technology and creating new products that the industry so desperately needs for mainstream adoption. And I want to thank you for that. And so, we’re going to wrap up now and I, and this is Frank ricotta again. We’re broadcasting on equities.com around the world. We’re on the Traders Network at Davos 2019 and just and just like the extend a whole, a very big thank you to Ben Yablans. We’re very fortunate cause he is one of the industry experts when it comes to this market on a broader space from custody. Not only just custody but regulatory guidance. He’s been a leader over the last year and been very instrumental in getting some much-needed policy and guidance out in the world. Again, thank you and have a great day.