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John Bocker – FFL Consultants Transcripts

John Bocker is the Managing Director and co-founder of FFL Consultants

Note: This transcript was automatically generated by artificial intelligence (AI) and therefore typos may be present.

Rob McNealy – RobMcNealy.com
Hey folks Rob McNealy here. And today we’re talking to John Bocker. He is the co founder of FFL Consultants out of Colorado, and they specialize in helping the gun industry actually be compliant. So, John, how are you today?

John Bocker – FFLConsultants.com
Great, Rob. Hey, thanks for inviting me.

Rob McNealy – RobMcNealy.com
Well, you know, I appreciate talking to you. I know you’re super, super busy, and especially with the state of the gun economy right now, it seems a little crazy. But I think we can jump into that in a second. But before we get into that, tell me a little bit about you. How did you get into this space? And what is an ffl? consultant? And what does an ffl consultant do?

John Bocker – FFLConsultants.com
Well, if anyone’s inside of the firearms industry, everyone knows the ffl is the Federal Firearms license that the ATF actually issues to gun dealers and manufacturers and distributors inside the United States to actually manage and manufacture and sell firearms. As I tell our clients for the government, the government is not allowed to do that and enter into commerce with firearms, so a licensed gun dealers, around the Americans, you do that for them. So we got into it, JC is a john clock, my partner in this business, we’ve been working with the National Shooting Sports Foundation for about eight years. And typically, we would be at SHOT Show and talking to audiences of about 200 at a time about different things they can do to secure and protect their guns against burglary, and how to deal with how to deal with straw sales and how to maintain that compliance so that they, as we say, stay out of hot water with the ATF just do things right. And one thing led to another and we realized there was a whole nother you know, arena of gun dealers out there beyond the nssf members. So we we started ffl consultants about three years ago, and now We service the entire firearms industry.

Rob McNealy – RobMcNealy.com
So how did you get so experienced with the compliance of this sector? It sounds like it’s pretty involved.

John Bocker – FFLConsultants.com
And I get that question a lot so that everyone wants to know, where do you go to school for this? Well, you really don’t go to school, you can come into this business a couple of different ways. You can come in through the government sector, which is working for the ATF for years and working in and around the the regulatory compliance that the ATF imposes and the government imposes. Or you can come from the private sector. And that’s what JC and I did. At one time, I ran compliance for galleon sporting goods. And at any given time, we had 85,000 firearms in stock. We saw over 300,000 firearms a year. I mean, it was a it was a significant company, and that company was purchased by Dick’s Sporting Goods years ago. And then JC did this basically the same thing for sport, the Sports Authority for many, many years. So we’re very versed in the everything from importation to license acquisition, to compliance, security, sales and operations and inventory control. And, you know, we’ve JC and I have both been in the risk management business for companies since college. So JC has a little bit of military and law enforcement background. I’ve been in the private sector for about 20 2030 years, just maintaining compliance for companies and as we say, keeping them out of trouble. So it all evolved into this nssf program. Like I said, about eight years ago, were asked to start that up for them, and just turned into my full time gig.

Rob McNealy – RobMcNealy.com
So what are the kind of problems that you see, or at least the common problems that a lot of you know, new ffl? Or even maybe some of the old ones? What do you think they where do they start running into that hot water? What are the things that are they doing that they what are the common mistakes they make?

John Bocker – FFLConsultants.com
Every every year the ATF actually puts out a list of the Top 10 issues that they are violations that they see in the management and control the firearms from their auditing programs, and from their results that their field inspectors actually report. But you know, it does change by year. And we see it more so recently in not only demographic but the startup ffl versus, you know, 20 year ffl. And but Rob dancy a question I want to say it probably comes down to training and turnover in every ffl. The laws don’t change that much in the forms, you know, the changing this form this year, the forms changing and as of November 1, but the 40 form 4473 which is the firearm transfer record. That doesn’t really change but once every four years if and if it gets revised and if there’s reason for it to be changed, because it’s a major overhaul a major I want to say process. For every gun dealer to convert to a new form, and train that folks, but what we see is newer gun dealers having a biggest struggle getting up and running, and understanding the very complex, what we call the ffl. guidebook issued by the ATF, it’s 263 pages of laws, regulations, and statutes that, you know, new, a person new in the business has to absorb, digest, understand, and then apply. And there’s little nuances to do. And each one of those right and wrong, there’s a lot of exceptions to the rules, they have to, you know, understand and possibly call your ATF agent about, or just continue reading and asking, you know, veteran ffl, or someone like us, you know, how do I do this? So we always say, you know, your first place to start is with the ATF. But if you don’t want to call the ATF and ask a question, that’s, that’s what the nssf and ffl ffl consultants is all about. We’re there to answer the question, we give real answers fast. And that’s what a gun dealer needs, you know, when they’re selling guns and managing inventory,

Rob McNealy – RobMcNealy.com
Is there like a school or like an orientation program offered by the ATF for these new FFLs?

John Bocker – FFLConsultants.com
Not so much any type, of course, or school or, but they do, you know, and that’s where we were actually involved with them as the nssf experts and consultants, we actually were traveling with the ATF and the FBI, every year conducting what we call regional workshops. And I want to say that’s the closest thing to any type of training that the ATF or the FBI in the next division will actually provide. There’s not much if anything available online is not many video or, or training tools online that you would expect from, you know, a perform process such as this. So that’s where we come into, you know, that’s what we’ve started to develop, because we know there’s such a need for that to occur. And it’s the only way really to keep, you know, people on the straight and narrow and doing things right, and getting up and running when they’re new to the business when the new to the business.

Rob McNealy – RobMcNealy.com
So right now, at least from what I’m seeing, it seems like the gun world is a little busy right now?

John Bocker – FFLConsultants.com
That’s an understatement. Yeah, so this is, you know, the fourth going into the fourth quarter of 2020. And we’ve seen more firearm sales in the last six months than we have in, you know, in any in any six month period, actually, in the history since the a test been keeping track since 1968. We’ve had over 8 million firearms sold in since since March of 2020, a stat breaking all records and for a variety of reasons. It’s just not, you know, someone says Well, why? And I say, well, it’s just not COVID. It’s just not the election. It’s just not civil unrest. But I think it’s a combination, depending on where you live and who you are. It’s a combination of a few of those elements that are just, you know, causing people to turn to a firearm for personal safety. And the other interesting fact is this is the first time that we’ve seen such a just an astounding number of first time gun buyers. And when we were getting that information through our dealers or dealer networks and surveys we’ve been conducting, but we’ve seen and it’s a little bit scary because you want training to go along with all those new firearm purchases. But for the first time, we’ve seen an overwhelming number of first time gun buyers, and in states where we haven’t seen high gun sales before.

Rob McNealy – RobMcNealy.com
So with all these guns being sold, it sounds like you know, gun dealers are pretty busy. Do you see a lot of mistakes happening because of that just with like another you know, the paperwork side of things and the inventory management side of things.

John Bocker – FFLConsultants.com
I want to say yes or no. Again, it depends on which who the dealer is how you have someone who’s spiked in business, maybe they were selling 10 guns a week 10 firearms, and now they’re selling 50 to 100. Just because of the run on on firearms and the supply and demand issues. We have firearm dealers we have clients all over the country from Miami, Florida to Seattle, Washington. But we have everything in between and we’re getting calls from the strangest from the strangest gun dealers and the strangest places but the strangest questions. An example would be you know, customers are some states are running out of firearms, basically, high population, low density of gun dealers, you’re gonna sell out pretty fast. So someone who someone who wants a firearm may have to travel 50 to 100, even 200 miles to actually pick to purchase the firearm they want. So we’re getting a lot of out of state purchasing requests and questions about clarification. There’s a lot of state regulations that that supersede the federal regulation. So you know, a gun dealer in Mississippi, for example, might call us with a question about someone from Louisiana or even Georgia coming over to purchase a firearm in this state. And that is restrictions on long guns versus handguns. There’s restrictions on magazine capacity. Types of firearms for certain states. So it’s caused a little bit of confusion. So on the gun purchasing side, we’re seeing a lot of confusion with out of state residents coming into buying it in a different state where they don’t live. So that that just leads to the paperwork, compliance issues. Am I doing paperwork correctly? Am I legally selling his firearm to those other people that aren’t my regular local customers? So we’re getting a lot of those questions. And that’s probably the greatest area where we’re finding compliance issues. Then it was a big because of the overwhelming number of firearms been purchased. You know, it’s put a real strain on the FBI background checks program, which is commonly known as Nix. And there’s one point back in April and even into May, though it delays the firearms of the next verification division of the FBI was, was backlogged maybe two, three, or even four weeks in getting an answer a determination to some of the firearms dealers for customers who are awaiting background checks. And there’s laws in place that say you can transport a firearm anyway. But there’s a lot of dealers who just don’t feel comfortable doing so. Yeah, typically, the law says you can, if the FBI doesn’t get back to you on a background check, you can transfer or sell that gun after three days, three business days. But a lot of gun dealers, you know, are more say, have more loyal to the constitution and safety aspect of selling and transferring guns, they don’t want to transfer a gun just because the law says they can. The law also says they don’t have to. So we were getting a lot of questions back during April and May about you know, what do I do? Do I have to transfer this firearm? Can I can I not transfer it? You know, because I don’t feel comfortable? I want to wait for your firm confirmation that they don’t have any background check problems. You know, and that was a big that we we were getting several calls for that about that question each week. But then we were we’re out visiting. Now, again, we’re doing an in store audit program, Rob, where we actually go into gun dealers. And we basically review all of their past transfers since the last inspection by the ATF just to make sure everything’s correct. And if we find issues, errors, we highlight them for correction. But you know, we’re finding errors all over the place from dates of birth, not correct. The wrong date, you know, you I’m supposed to put a date of birth on my transfer form, but I’m putting an expiration date on my ID was saying, you know, little technical clerical leprechaun, Clara, Clara’s administration error is not that they’re serious major problems with the gun transfer, but the clerical errors on the paperwork, all of those add up to violations with the ATF and they come to visit. So we try to claim that all up before the ATF next visit. So the gun dealer, we say passes with flying colors.

Rob McNealy – RobMcNealy.com
So I, I’ve talked to a lot of gun people and a lot of gun retailers. And there’s a lot of trepidation about the B ATF, in general among a lot of these guys. Do you see out in the field the be ATF being supportive and helpful? Or do you think they’re more adversarial when dealing with retailers?

John Bocker – FFLConsultants.com
Well, this is 2020. So if you asked me this question, 10 years ago, I might give you a different answer. But today, I want to say we were very we work very intimately with the not only Washington bureau, ATF office, folks, but we also deal with all more than 50 regional and local offices around the country, for the ATF. And I want to say that it was probably a change in regime over the last 10 or 15 years with new folks coming on a lot of retirees, you know, taking that option. And I want to say the ATF has a new perspective on support for their for their gun dealers. And I think it’s instead of the old gotcha type of scenario, which you might be referring to, I want to say that predominantly, I find that they all supportive. You know, when you do call the ATF, when I was answering the phone is going to try to give you the right answer or get someone to return your call your inquiry the same day. But they’re they’re a government agency. What I mean by that is they go into state fact versus fiction and eliminate opinion and not offer advice, but they will tell you where to go to find an answer. Make your own determination or interpretation of the law. And that’s that’s the I want to say that the gray area that we still find. It’s not like you can call the ATF office and ask a question and get advice. You can get an answer a firm answer based on statute, something that’s in writing something that’s a law. They’ll refer you to a process or procedure that’s already documented and issued publicly. But beyond that, you got to get to rely on your instincts, your opinions, your lawyers, your consultants, your sisters, your support team, your colleagues, maybe you’re part of a buying group where there’s a lot of ffl compensation. That’s the tough part is who do Who do you go to when you, first of all don’t want to go to the ATF. And second of all, you want more than just, you know, a black and white answer. That’s, that’s where we find a lot of our, our support being administered.

Rob McNealy – RobMcNealy.com
So with you with ffl consultants, where would your advice and maybe where would an attorney’s advice pick up from there? How do you work with that?

John Bocker – FFLConsultants.com
Great question. Great question. So we are not attorneys. And we stipulate that if you, if you work with us, we tell you that right up front, yeah, we base all of our knowledge on experience, practical experience, work practice, personal experience of being deposed and investigated and inspected, and now being training with the ATF and the FBI next team. You know, we see all sides of that JC and I and our consultants see what we call a 360 view of this business. So we can actually give you advice not only based on the legalities, but based on the business aspect of it profit and loss, you know, revenue generating perspective of what you’re doing as a gun dealer. But we have to, we have to draw a line when it comes to issues and situations of liability. And concern weathers the what if question, what if I do this, what if I do that, you know, we will give you our best experience and advice. But we will partner partner, you as a gun dealer with someone, we have attorneys around the country as well, we work very well with two of the very well known firearms attorney groups that are nationwide. So I pay to also have great relationships with the ATF. But we will with smart enough to stop at a certain point in giving advice, making a determination or proposing a decision and offering it up to one of our partner attorneys. You know, we of course, are insurance insured and bonded and have the right protection in place. But there’s limits to what we what risk we want to take on, especially when that firearm can impact someone else’s life, or be stolen and be involved in a crime, etc. So we want to be a little cautious in that area.

Rob McNealy – RobMcNealy.com
So what do you see what like manufacturers? Do you see the different set of problems? Or do you work with manufacturers very much or more with the retailer side of things?

John Bocker – FFLConsultants.com
Manufacturers, most of the manufacturers have been around a while. So we do our work with new manufacturers standing out helping stand up the business on paying the licensing and insurance. And, you know, set up our operations and basically explain the foundational fundamentals of all of the acquisition and disposition record keeping the marking program, make sure they are congruent with the local ATF team so that they understand what they’re doing from the get go is, is 100% we’d rather spend a lot more a lot more time on the front end of a firearms, new firearms business, such as manufacturer and we have some ammunition manufacturers now we’re dealing with and some fellows who have moved from retail into manufacturing of AR type firearms and manufacturing kits into AR. So we have some minor manufacturing. So that’s what I’m talking about in this prior discussion. But on the line in a larger aspect, will it be browning or others and some of the major distributors, we find that they although we do support them through the National Shooting Sports Foundation, they typically have their own in house team of attorneys, compliance folks, people have been with them probably, you know, 510 15 years and or retired ATF folks who specialized in those areas. So we see less of that on our side. And most of our business and support goes to the retail gun dealer and the firearms range operators.

Rob McNealy – RobMcNealy.com
So it’s interesting politically out there. with things like the government changing its mind. Some things that come to mind would be say, for instance, the the recent bump stock ban signed by you know, Donald Trump, and I don’t know if you saw this even recently, but there is a thing with the honeybadger pistol, it’s a race issue. And it seems like sometimes ETF just shifts course, very, very quickly. What do you see? And how would you recommend that, you know, a retailer or something? How do they respond to that kind of shifting political landscape?

John Bocker – FFLConsultants.com
We don’t see a lot of it, but obviously, I think any of it, you know, and a few of the two issues you mentioned obviously, and prior to that was magazine capacity bands, and different things. They what we do see of it, and I’ve been in this business, basically in the business for about 20 years since I you know, worked directly inside the firearms retail business. But we’ve been what we do on a daily basis, Rob is not only stay connected on a daily basis with the ATF open letters and rulings, but the nssf obviously is very intense. And then legal team and government relations team is very astute to what’s going on when it happens, whether it be at the state level, federal level. But I think I think historically, if you go back and look, there’s always an instance, where that sparks this change in demeanor or change in legislation or these these shoot from the hip restrictions, as we saw with the most recent one. But what we see is, if you go back and look at the incident that sparked the change, in statute, a ruling, whether it be a shooting in Las Vegas, or shooting at a school, or, you know, maybe there was a lawsuit in the news with, you know, a major retailer, and a shooting, that’s what we see, oh, is to be the issues that always catapulted this type of of item, you know, in the news. And the first thing, first of all, is to understand what the issue is. Secondly, if there’s an immediate notification, or if this is just something being spoken about, which most of them are, you know, it takes a long time for a bill to be introduced legislation to actually be approved and, and supported and voted on. And a lot of these bills, you know, Virginia just had an overhaul of their entire channel and less last year, I think they put five or six different new rules in place. The one we’re hearing about most across the country is the red flag laws with whether your firearm can be taken away from you for a variety of reasons. And that’s all based on states and municipality. So there’s a lot of rhetoric out there. But I think it’s important for a gun dealer to know what’s what’s impacting this state, you know, locally, are they in touch with their local legislators? Are they in touch with the senators and congressmen help them with some of the these these new call nuisance bills or legislative changes that are going into effect, you know, you really got to be connected, some of the best gun dealers and biggest gun dealers we deal with are connected, and have a direct line to their support legislator who can help them with some of the local laws. But when the ATF comes out with the honey badger, for example, this is this is making news for the last two or three days, everywhere yet, the the conversation is based on not based on anything specific xx except some wording that was used in a website, where the about a manuscript by the manufacturer that was maybe a little bit and probably could be edited or changed to resolve this issue in the description of the firearm itself. But the firearm itself was approved by the ATF design committee, design division, it was approved for manufacture as an AR pistol. So it’s very confusing to the the firearms industry yesterday and today, seeing all this news about it, and saying, you know, which end is up. So there’s obviously a lot of attorneys working fast, including NSSF, right now to figure out, you know, what the determination truly is before we run out and declare a million million firearms to be 100,000 firearms to be boating illegal in the hands of citizens illegally searches.

Rob McNealy – RobMcNealy.com
So tell me a little bit about that case, specifically, I saw an excerpt from a letter from the, you know, in the ATF, but it didn’t specifically state what the problem was. So I, you know, I don’t know what the actual problem was with the honey badger. What is the the issue they’re having with that?

John Bocker – FFLConsultants.com
Yeah, and I don’t have the I don’t have the website up. But basically, it was determined on their website that because, as I understand it, again, this is I’m not an attorney. As I understand it, this discussed we had this discussion this morning. And, you know, they might they might have built and manufactured and marketed this firearm as a military, they wanted this military, this firearm to be introduced and accepted as a military weapon to replace a very common automatic firing weapon that’s used by the military without mentioning names but long story short, it was not adopted, it was not. It was not adopted to replace the long standing current firearm that was being used. So the website basically advertised as honeybadger. It was an it’s an AR pistols what it is, it’s not fully automatic, it’s semi automatic. But they advertised that as a military weapon built for the military. And I think there’s someone got a hold of that, I don’t know. And they they ran us up, up some flagpole to get some backing behind the argument that it’s not a citizen. It’s not a non licensee, a citizen regulated firearm and it shouldn’t be and should be regulated by the NFA. Now that’s the general discussion that I was involved with as early as this morning. But technically, it has no other reason, because of the design of the firearm to declare to show up our rifle. You know, it’s got an arm brace just like every other approved AR pistol is able to have. It’s got a it’s a magazine fed. It’s a short barrel. But it’s not, it’s not a long gun. And anyway, and it’s not a rifle because the rifle is technically a firearm that has to be shot yet has a permanent shoulder stock on it. And as his shot is you can shoot with two hands. So this is a single hand operated firearm with an arm brace. So technically, it fits the description as as described before and as approved as an AR as a pistol. So this confusion, there’s a lot of confusion, I think within a week or two, there might be some more determination on this, but no one’s running real fast to know we also spending the deal is we are we are talking to or we’re advising him to suspend the sale of that firearm until we hear more about it. If there’s any, there’s some in stock, there are still some available. But the manufacturer has halted production of it and well, you know, it’s Q, I believe it’s in Utah, right. But based in Utah. So, you know, we’ll see what happens with this, but it’s fun to watch.

Rob McNealy – RobMcNealy.com
It’s interesting. And it you know, I understand a lot of people have these braces. So I think that’s why there’s a lot of concern out there. And some of these braces are not cheap, like the maxim defense or the SP tactical braces are they’re pretty proud of them, those products, so it would be I think, devastating if those somehow became, you know, illegal contraband. Now, I mean, there was a lot of bump stocks out there, but I think there’s a whole lot more braces running around than there are bump stocks.

John Bocker – FFLConsultants.com
Well, yeah, and the brace itself is a legal accessory for, you know, a pistol, you know, and, you know, that’s as far as if you go back and look up, if you go to the ATF website and research this, you know, the arm brace is approved by the ATF to be attached to any pistol pistol, and they had an open letter in 2017, that even went on to expand the usage allowance to allow, you know, because there was all this, all these issues about people on YouTube and on video, you know, being shown or being seen using it as a shoulder brace, so to speak. So as long as it’s not designed to be used permanently as a shoulder brace, you know, or substitute stock for the firearm, it’s permitted. So, again, there’s a lot of gray area on this one, because there’s nothing new invented on this as an accessory on us on the honey badger to make it any more than what it is, which is an AR type pistol. That’s, again, my, my experience, in my opinion.

Rob McNealy – RobMcNealy.com
Well, this is why FFLs have to contact a guy like you to explain all that complicated nonsense and, and kind of diluted down and distill it down into something that like I said, Be distilling, not diluting. But distill it down into something simple, like a guy like me can understand all this bureaucracy and craziness.

John Bocker – FFLConsultants.com
Yeah, that’s all one thing, we get some panic calls, you know, when the bump stock ban went into place, and in some places they are bands have gotten into have been introduced and approved and made into law. I mean, I’m in Colorado, in Boulder, Colorado, outlawed ar, ar rifle, as of May 2019, a year over a year ago. And there was a surrender day either register it or move it out of the county if you if you reside in the county, and actually city limits, or register with the place or transfer it out or surrender it. And now, you know we get it. We were getting all these calls primarily from the dealers but also from a gun owners. You know, we’re on our website, wherever websites, so we get all types of calls, whether it be gun dealers, or people looking to buy guns or buying ammunition, or trying to license their firearm or whatever they might be doing. So but the interesting thing in Boulder, Colorado, Colorado, is he had a gun dealers had to worry about and no one else really did. I think and I think out of over 1300 estimated AR type rifles that they had in the county, just about 135 or registered. So it just goes to show that you know, some people are reacting, but some people aren’t. And there’s always gray area for discussion. And then there’s always the question of Well, what’s going to happen if I don’t, you know, so we get in the middle of all of it, you know, we don’t never disclose who would call him that we often call police department or they are the ATF or someone and ask the question on behalf of one of our clients. So someone calling, so it’s fun to be in the middle of it without being exposed, personally as to you know what the issue is, but firearms legislation, the laws, you know, are pretty straightforward on a federal level, it’s the state level you gotta worry about.

Rob McNealy – RobMcNealy.com
It sounds like a lot of fun that they’re not your problems, in other words?

John Bocker – FFLConsultants.com
Yeah, most of them are my problems but but also services that help people with problems. So, you know, on any given day, you know, because of what we’ve done JC and I have been risk managers for large corporations and companies for almost 30 years each. So as I, as I tell people, I basically kept people out of trouble for all that time kept companies out of trouble and CEOs and but we also protected those businesses from from unnecessary liability. And we just didn’t want to incur the problem, you know, do things right, stay out of trouble and have no problems. And you never want an OSHA or the ATF or the IRS coming to peek in, you know, to look at your business, I mean, and it’s just a disruption and distraction when that occurs. And if you doing anything illegal, when they do show up, they’ll come they’ll look and leave. And that’s all goal is to is to help them do. Let’s do that.

Rob McNealy – RobMcNealy.com
So it seems to me like, or at least it sounds like what the retailer is that it seems like paperwork is the problem, like just keeping simple errors to a minimum would impact that a lot.

John Bocker – FFLConsultants.com
Oh, absolutely. And the biggest problem in a gun dealership right now is the human we call it the human factor, its people its turnover, training, a lack of training as new hires, there’s a lot of great software packages out and available now for gun dealers to do a couple things for and if you’ve been to a big box retail, like ballasts Academy, or a sportsman’s warehouse, you know, they’ll have you go up to the computer, laptop or the computer screen and fill out the 4473. And that eliminates the nice thing is it eliminates a lot of the human error issues that can be logged at the time at a transfer Can you know that way, it helps the gun dealer speed up the process. And you know, you don’t have to review the form three or four times you can let the software manage that for you. The software has built in controls and filters to make sure you put a date of birth, that’s that’s all of it an 18 years old for longer. And that’s all it and 21 years old for a handgun, those types of filters are really cool. And make sure every box gets filled in and make sure that you know the alternate the optional boxes are filled in with with hints and why it’s important to do that, like your social security number. It prevents the gun dealer from having an empty box and therefore having mistake itemized for them when they have the next ATF inspection. But then on also on the inventory side is great software for creating the databases for acquisitions and dispositions. And, and in most cases, if you if you buy more sophisticated software package, they’re linked. So if I sell a gun, my inventory is adjusted and a disposition occurs and a timing so good. So we do recommend when we find gun dealers with higher volume of transactions, or excessive training issues to implement some of these software packages. Of course they you know, they’re not free. The ATF does provide some free software that helps. But for the most part, it’s the training process, the paperwork process that is hard to harder to manage. And there’s lots of statutes about how long do I keep my form, how even a denials where it was somebody turned down for a gun transfer, I still have to keep it for five years. And we still get questions on what you know what to do with this paperwork in this type of transaction. Because some of it is just confusing. And not everybody can keep up when they’re running a business. You just can’t keep all of those answers. Top of Mind.

Rob McNealy – RobMcNealy.com
That sounds a little crazy. I mean, we see that a lot in the crypto world to like. And in fact, at least in the gun world, there’s a lot more clarity like we already know what the rules are. In the crypto world, there’s a lot of lack of there’s a lot of I guess cloudiness, there’s not a lot of clarity. it because it’s so new blockchain and cryptocurrencies are such a new thing. Now, and I think that’s one of the things that is hurting the United States right now, a lot of these big crypto projects and blockchain projects are moving to other jurisdictions, because they don’t like the lack of guidance and clarity from the regulatory side from either than the CFTC, the IRS or the SEC in the United States. And so there’s a lot of stress there. And even with us with our test project, we focused very heavily over the last three years that we’ve been around on, you know, making sure we do our best to avoid, you know, regulatory risk as much as possible. But it’s so new and that, you know, you don’t necessarily know what you’re going to do something wrong, necessarily. And I think that’s it’s been interesting, you know, kind of in this space and at least in the gun world, you know, what the rules are, it’s pretty concrete. You know, the ATF changes its mind like you’re saying they let you know, they’re changing their mind. But right now it’s in you know, how this is what’s government paperwork, Number and regulatory enforcement is that the government’s not going to tell you if you’re if you did something, right, necessarily, they will tell you if you did something wrong, or they think you did something wrong, but they tell you, we’re not going to give you advice, you need to figure that out on your own. And then if you screw up, then they’re going to hammer you. And I think that’s actually not good governing in general. Especially if people are open and trying to do the right thing. They you know, if the government won’t tell you, this is not going to work if you do it, or this will work. And I think that’s a big problem. And it’s hopefully again, it gets figured out over time, because I think with these new financial technologies and and technologies that are coming around, I think that the United States should be able to be a leader in this space, and it is changing the world. But

John Bocker – FFLConsultants.com
You’re asking me all the questions. I want to dig into your stuff in just a bit. This whole crypto world is getting a lot of interest from gun to gun dealers, mostly the you know, the online gun dealers who are hearing about it, whether it be you know, Bitcoin or other type of cryptocurrency, and it being so new. I know it’s been around a while. But it’s still pretty new, especially with the firearms world where our business has been pretty, pretty normalized for the last 10 1520 years. And to your point, the laws have been around the law hasn’t changed much since 1968. With the Gun Control Act, it’s just like, as I said earlier, as some of the state laws that are confusing and challenging to keep up with, but um,

Rob McNealy – RobMcNealy.com
Well is what we’re trying to do is we we’ve created with TUSC, which stands for The Universal Settlement Coin, what we tried to do is we’re trying to solve a problem a payments problem, and a lot of people outside the gun world won’t necessarily know this. But in the gun world right now, lawfully regulated, heavily regulated, licensed gun dealers are having a real big time and a hard time with payments. And it’s not because of the loss, it’s because of a designation from politically active as banks have made it that the guns are treated like cannabis in prostitution and gambling. And so banks and financial institutions and third party payment providers don’t want to work with gun dealers and the ones that do want to take the risks charge a lot of basically a much higher fees for those services. And so with TUSC, we’re creating and have created a decentralized payment system. That is much cheaper than any credit cards out there. Right now, our network fee to the network is only half percent, and some of the gateway providers I think, will be adding 1% to that. So the idea is that instead of using a credit card that might be anywhere from three to 6%, depending on who you are, our network fees for every transactions only you can get the max, it’s gonna be as like a percent and a half. And then with a crypto payment scenario, you can’t be shut down. Right. So like a lot of

John Bocker – FFLConsultants.com
Yeah, that’s a great glad to leading into this, because that is a question we get very often. And as you know, we’ve sent some folks away just to talk about this, like with credit card regulations, and the banking Institute’s you know, basically becoming, you know, non NIH supporters, non to a supporters rather, it’s very confusing to a gun deal and threatening actually right now as to what to do so. So stay on this topic for a minute what, what solutions is TUSC bringing in that regard?

Rob McNealy – RobMcNealy.com
So we’ve created TUSC It’s a cryptocurrency it’s a standalone crypto coin, kind of like Bitcoin. Everybody’s heard of Bitcoin, but we built TUSC for the gun industry. So we’re a bunch of passionate gun owners and gun builders and, and to a supporters. And we’ve been working on this project almost three years now. But we’re kind of we’re called a decentralized project. So that means that we’re kind of like a cross between a co op and a nonprofit. So no one owns TUSC. We’re not a for profit corporation. And the decisions about how TUSC is operated, are made by the members of the communities meaning that if you own a TUSC coin, you get to vote, you get to have a decision or a hand in the decision making on how TUSC is operated. So it’s it’s basically buy the gun people for the gun people. And the network itself. It’s pretty straightforward cryptocurrencies. Imagine, like a lot of people are familiar with how PayPal works. And but no one really understands how the back end of PayPal works, right? No one really understands how the back end of Venmo works and most people don’t care, right? They just want to have a payment solution. But right now in the gun industry, the banks who operate all those different Different types of Venmo and cash app and stripe and square and all those. They don’t allow gun retailers to use their systems, because of politics, it has nothing to do with legality. And so because they view is the gun industry is, you know, like prostitutes and gambling and hustlers and everything else, which we know is not true. But so what we’ve decided is said, you know, we watched in and as a group, we decided to try to solve that problem. Like right now, for instance, and I’ve talked to a lot of, you know, gun related people, is that there’s this whole, like, political debunking, and D monetization, you’re seeing that on the social platforms with Silicon Valley. You saw that with salesforce.com, you saw that was Shopify, these these CEOs are just activists, and they just basically write an open letter and say, if you’re under the gun world, we don’t like you, and you’re off our platform, they just say we’re not going to work with you. So the in essence, how we we solve the problem problems, one, we eliminate chargebacks, there’s no chargebacks with TUSC. So if you’re a custom gun builder, and someone’s impatient, they don’t want to wait for the gun to be built, they can’t charge you back on TUSC. Whereas with a credit card, can because they’re considered a red flag industry, they don’t get much of an appeal process when they have a chargeback. The other thing is TUSC helps on cash flow. So for instance, right now, if you accept the gun friendly credit card processing, processor, you still might have to wait anywhere from three to 14 days for that, you know, acth to hit your bank account. Well, with cryptocurrency it hits instantaneously hits their wallet, their crypto wallet, so if I bought a gun, or if I bought a gun from you, with TUSC, you would instantly two and a half seconds to three seconds later you have that cryptocurrency in your wallet, and you can verify that it’s there. It’s just as fast as credit cards. But you don’t have to wait for the bank to drop it into your checking account. And then on top of that, it’s like an insurance policy because we don’t have the ability to shut you off. So right now, and you’re seeing that right now, like especially a lot of mom and pops, you know, gun stores will set up a PayPal account, right, but they won’t do it in there, they’ll they’ll set up their business name like JC enterprises or whatever. And it’s a gun store. And PayPal work for a while Pay Pal were for a while, then bam, PayPal stops working and freezes their account. And once because PayPal has ways to figure out over time, if you are a gun dealer or an illicit business and they freeze your account. With cryptocurrency, we’re not a company, I have no ability to shut you down. It’s not even in the code doesn’t work like that. And so if even if I wanted to shut you down, and trust me, there’s some people I’d love to shut down, I don’t have the ability to shut you off. And I don’t own in any ways. I’m just a, you know, a member of the the co founder team, but I don’t control it. I’m not a CEO or anything. But the network isn’t designed to be shut down. So if you host all basically host a wallet on your own website, and you’re willing to accept TUSC, you have an insurance policy against being d platformed. In addition to it. So we always tell people look, you know, crypto is a new thing, right? This is new technology, there’s a lot of pieces, it’s got a little bit of a learning curve. But let’s just say you got a gun friendly crypto, or a gun friendly credit card processing account already set up on your website, you can download a plugin for TUSC, put it into your website, and it’s another backup payment method. So of some day, that credit card processor that was gun friendly decides to be not done friendly anymore. You can still be in business with TUSC. And we don’t have the ability to shut you down.

John Bocker – FFLConsultants.com
So as a gun purchase as a firearm purchase, would I be able to go out and buy I noticed is all new and evolving. But right being able to how do I go out and buy TUSC or get enough TUSC. So then I can go online to use my TUSC currency to purchase my firearm.

Rob McNealy – RobMcNealy.com
So that’s kind of the infrastructure we’re building out right now. So we’re a new project, really. And so one way is you can buy it on set one of seven exchanges that we have were listed on right now or traded. So this is interesting about cryptocurrency is that they’re traded like stocks. And so the value is always shifting. So that’s a little harder for people to wrap their heads around. But right now you can buy TUSC very easily through seven one of seven exchanges and you just log into an account and set it up for free and then you can buy it with a credit card or if you want to buy a large amount, you can do a wire transfer through your bank to whatever exchange you choose. We are in talks right now and we should be on an ATM, crypto ATM network very soon. So I would hope like I can’t give a timeline but we’re in talks with the biggest one right now. And they’re talking about integrating us and so once that happens, we’ll be available on the big ATM network. So you can just go to an ATM and By TUSC, right through an ATM, and it goes right to your mobile wallet. And then we’re currently in discussions with several places where we’ll have the ability for people, for instance, that you can buy right from the website. So, and we’re gonna be working with the retailers on this. But if the retailer wants to accept except TUSC, they can set up an account with a variety of companies that we’re talking to, that they’ll have a little widget on their website that they can instantly buy house great then in there. And so we’re making it as easy as possible for people to get TUSC. But with any cryptocurrency, the we call it, the on ramps are the off ramps to get into crypto and get out of crypto. Those are the those are the things with pieces that we’re kind of building right now. And, and we’re not going anywhere. So we have a roadmap and where we are, we’re still I still think of us like a startup though or not. But there’s a lot of that infrastructure we’re building out right now. But we’re going to have all those pieces, you know, pretty quickly, you know, set up for retailers. So when we go and sign up for retail, we’re like, Look, here’s how you deal with the wallets and the plugins. And this is how your customers can get TUSC and things like that. So we’re gonna help hold the hand of retailers, which you won’t get with any other cryptocurrency, like if they want to accept Bitcoin, there’s no one from Team Bitcoin that’s going to come to your shop and help you set up or, you know, walk you through the process. Whereas with TUSC, we will because we are part of the gun community and we fully support it, and we want to help we created the solution because this has been a big problem.

John Bocker – FFLConsultants.com
Yeah, you know, we saw you had a SHOT Show, we got talking to you and thought this whole platform was state of the art ever, you know, quickly evolving. What did they got? Did what did the gun dealers, a logic guys that you spoke with on a lot of meetings? What What was their take on moving in this direction.

Rob McNealy – RobMcNealy.com
So I think that’s like how I think it really fell down how you would think of it the younger ffl the guys that grew up with social media, the guys that are you know, you know, a lot of the vets than that community, they get it, it’s not even a lot of them already have cryptocurrency, so those guys already get it, the guys that are already doing, you know, spending their time doing a lot of e commerce and really leverage a lot of Instagram, those guys get it. The I think it’s like the people that are a little more resistant or more the the Fudd guys that they always sell 40 fives in their gun store. You know, those guys, you’re never gonna win over to this. And so but i think i think it is a demographic issue. And we don’t expect every gun retailer to accept us right away. We think this is gonna be a long term process, but we’re going to be a long term project. So we don’t we’re building something that’s going to last and be here in 50 years. And so we also..

John Bocker – FFLConsultants.com
It also depends on the financial community, right? How many, you know, Citibank, when Citibank doesn’t take care, your credit card doesn’t lie credit cards to be processed anymore, because your gun dealer or Bank of America, I mean, it starts to raise some eyebrows, right. And, again, like I said, we’ve had people panicking, because of their 48 hour a 72 hour notice, you know, what do I do? And, you know, it’s nice to have an answer on the horizon here.

Rob McNealy – RobMcNealy.com
Yeah. And so and we’ve run into that to you and I and I can tell you even as shacho, I talked to a lot of merchants that really had that same problem, that they literally were using something and they got a short notice, then boom, they’re out of business for two months, I was on a website, the other day, I was looking for a component because I build guns as a hobby. And I was looking for something and the website, and I’m just like, I tried to get ahold of the guy. But the website said, we’re down because we lost our merchant processing right there. And it was just like, we got the solution for that. And so and what we’re doing right now is we’re we’re kind of going to be launching this beta pilot program. So we got some, we got a bunch of things that are going to be put into, we’re gonna be launching a bunch of products to support retailers here in the next couple months. But any, if you have any ffls that are interested, we’re going to be launching this beta pilot, so we’re gonna want to bring in a bunch of retailers that want to be guinea pigs, so to speak. But for that, the they’ll be they’ll get some share of TUSC coin for their own risks. So there’s gonna be some compensation involved for them taking the risk and some pre free promotion, free marketing that comes with that. Because it’s going to be a learning curve, we need to get some feedback from the industry. And so we’re going to make it worth their time if they want to come on board and be an early adopter of TUSC. But I think this is the future. And you know, we don’t know what’s going to happen politically in this country either. Right? It certainly seems that one side of the ticket has already told you what they want to do, right? And you know, and you would know this too, just like in a lot of retailers, the words operation choke point come to mind back under the Obama administration back in 2012 2013, when they really put the hammer down on the financial industry to basically mess with the gunnery world. And so you got the same type of people going maybe in maybe in In a couple months, and you know, you never know when they’re gonna try to pull the rug, they’ve already said they’re anti gun, they already said they’re gonna try to come down in the industry. If they can accept task, it basically decentralizes and pulls away some of their tools to screw with people, at least on the financial piece of this. And there’s no. And again, remember, though, like if all of a sudden, the somehow the Gov the Treasury Department or the Comptroller of the Currency or whatever government agency they leverage, tell banks that you can’t let them buy guns with credit cards anymore. What are they going to do? Because if they can’t do that, that affects Venmo, and all those other places, too. So they don’t have another option there? Because those are all based in dollars. Yeah, I think currency solves that.

John Bocker – FFLConsultants.com
It’s been kind of a quiet issue for the last six months to a year overall. But I want to say, you know, we’re not sure what’s going to happen with the election. And, you know, this would be one to definitely watch. It might be something just sleeping on the side. That can be, you know, resurfaced here flooded very quickly. So good luck. How so? What’s the ETA Rob on your, your platform being available?

Rob McNealy – RobMcNealy.com
Right now we are available, we already have a working protocol we already have. I mean, we already have a product out there, you can buy TUSC on exchanges, right now, we do have a cloud based wallet. So if you want to get your fingers wet, and just try it out, you know, people can reach out to us at TUSC dot network or just me, I’m just at Rob McNealy calm. And you could contact us either one of those two websites. But you know, so if anybody’s got questions, I’m really easy. Just plug Rob McNealy into Google, you will find me, and I will be happy to answer any questions for anybody out there. But I think also, you know, even if they’re not the banked, cryptocurrencies cheaper than normal credit card processing, because you still have that issue, right now in the gun world, even when they got have gun friendly payment processing, with credit cards, they’re paying really high fees, with those even gun friendly, because there’s only you know, there’s a few merchant processors that will do the whole gun thing, but they’re expensive.

John Bocker – FFLConsultants.com
TUSC. Yeah, I hear that the risk is being assessed as a premium to those who are staying and, and sad to say, but you know, supply and demand is not there. So the ones who are still in the game are raising their prices, I think artificially, and I don’t think that’s a fair thing to do so.

Rob McNealy – RobMcNealy.com
So when we tell people half a percent charge, or half percent transaction fee, no charge back and you get instant settlement into your wallet, and you get free promotion, and you’re getting insurance against the banking, the economics make sense, just on that to compete with normal credit card processing, and so on. And so like I said, it’s a new thing. But I think it is the future, because, you know, it’s interesting, the CEO of cash app, which is also the CEO of Twitter, jack Dorsey, they this week, just bought, they just diversified 1% of their company holdings into bitcoin. $50 million worth this last week. So corporate America is coming into crypto now. Okay, and this isn’t going anywhere. The crypto world is about a, you know, almost $400 billion market cap right now. Okay, this is not small money anymore, their institutional money, the State of Wyoming just allowed it that they can make crypto banks in Wyoming now. It’s the first state in the country that allows banks to actually hold crypto now as a custodian, okay, the crypto world is coming. Okay. And there’s there’s thousands of cryptocurrencies out there all kind of competing with each other. But none of them are focused on the gun industry, like we are with TUSC. So here’s the thing, it’s gonna happen. And it solves a problem now. So it just makes sense, to at least look at it. dip your toe in the water. You know, if you’re interested in coming on board, let me know, we’ll make it happen for you.

John Bocker – FFLConsultants.com
Yeah, it’s nice, nice to see you’re isolating and dedicating all of your research and platform development, everything to the gun industry, because I think it’s going to be an industry is lagging the lag behind just like, you know, other industries, you have the cannabis industry, you know, that’s highly regulated, the regulated depending on where you go with the gun industry is not going to be acceptable to everyone in this crypto business. So I applaud you for creating this, this community. So

Rob McNealy – RobMcNealy.com
Well, well, then, john, I really do appreciate it. And I appreciate you coming on the show today. Where can people find out more about you? Where can they find out about ffl? consultants?

John Bocker – FFLConsultants.com
Yeah, that one’s really easy. It’s ffl consultants calm, you know what, and that’s how most people find us or Google or when they’re looking for an ffl consultant. You know, we hopefully pop up first, and our phone number is available at our website and all the contact information. And let me just remind our listeners that your first call is always free. So just go online and schedule a call with us and we’ll make sure we get you get we get your questions answered fast.

Rob McNealy – RobMcNealy.com
John Bocker, thanks so much for coming on the show. And folks, I will have Have all of John’s information contact information and website at Rob mcnealy.com and tune in make sure you hit that subscribe button on all the major pod catchers and our library and YouTube channels. And thank you so much for listening.

John Bocker – FFLConsultants.com
Thanks, Rob.

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Haider Rafique – OKCoin Transcript

Haider Rafique - OKCoin

Note: This transcript was automatically generated by artificial intelligence (AI) and therefore typos may be present.

Rob McNealy – RobMcNealy.com
Hey Rob McNealy here. And today we are talking to Hyder Rafiq, he is the global Chief Marketing Officer of oak a coin, which is an American based cryptocurrency exchange. And you don’t hear a lot about American exchanges too often, because they’re just frankly, aren’t many of them. But I wanted to get his take on the crypto world. And so well, let’s welcome to the show. Hi, there. How are you today?

Haider Rafique – OKCoin
I am. Well, thanks for having me, too.

Rob McNealy – RobMcNealy.com
I appreciate you coming on the show today. I think based on some of our earlier talks, you got a lot of really, really good insights. And I wanted to share some of those their audience. Before we kind of jump into that though, can you give us a little bit about your background? How did you get into the crypto space? And how did you join the ok coin team.

Haider Rafique – OKCoin
My experience with crypto started when I left Microsoft, I believe it was 2014. And I was playing around with an e commerce idea that we had with a two engineers from Microsoft, we ran into a payments problem. Most of our customers were coming from China, South Korea, India and those markets. And by allowing Bitcoin as a form of payment, we were able to increase the amount of orders we were able to fulfill on on our e commerce platform. So that was my first exposure to crypto and Bitcoin. I ended up working for a few years in enterprise enterprise Product Marketing, b2b product marketing for a software company, only to find myself in 2017, like most of us and the sense of urgency that hey, I should actually go work in crypto, it’s more exciting than than what I’m doing. I got fortunate I ended up becoming the first head of growth@blockchain.com spend two years they’re building out their growth function, their their marketing function, and also their monetization while I was there, and I was hooked, I was in the rabbit hole deep. When I decided to leave blockchain I was looking for the next gig I wanted to take on was something ideally at an exchange. And I came across Okay, coin long with a few others and Okay, coin was fairly unique in what they were trying to build. And, and the leadership was was, you know, one that I really resonated with. So that’s, that’s how I ended up at Ok, coin. There’s a lot of exciting stuff going on here.

Rob McNealy – RobMcNealy.com
So what would you say differentiates Okay, coin from some of its other competitors, both globally, and you know, domestically?

Haider Rafique – OKCoin
So we are a Global Exchange? A lot, oftentimes, the question I get is, are you guys the US entity of because you’re now headquartered in the US? Are you a US entity? For Okay, coin? Are you similar to say, for example, by Nance us, and we’re not, we’re actually truly a global exchange. And the difference is, we’re actually headquartered in the US, in San Francisco, the way we differentiate ourselves is ultimately at a very macro level. The reality is Rob, we all have a lot of choices. When you think about buying crypto, whether you buy crypto through a wallet product, or you buy through an exchange, there’s just so many brands out there for anyone to choose from, what we try to do differently is we try and ultimately create an experience that is going to be really meaningful for the customers. We’re on that journey. Are we there hundred percent? Not yet. But we’re working really hard towards essentially differentiating on customer experience. So part of that means we’re not going to maliciously charge customers, fees, high fees you’re seeing that happen in the industry. So our fees are very competitive in the industry. We’re about one of the lowest fees exchanges out there. We’re also Fiat based exchange for for retail investors who don’t know that language, it’s essentially the ability for anyone to link their USD account, most say your chase or your Wells Fargo account very easily with the crypto exchange just like you would with any traditional brokerage firm like TD Ameritrade or fidelity, and being able to make a deposit and use that deposit to buy and sell and trade crypto. So in addition to that, we’re constantly adding new high quality projects and assets on our exchange, we’re giving investors and traders exposure to those to those emerging investment opportunities. Generally, when we step back from all of this, I think the ultimate goal for okay coin is to be the best customer service and customer experience. And like I said, we have a we have a long way to go.

Rob McNealy – RobMcNealy.com
So one of the things that you know, I see is has been a barrier to adoption of cryptocurrency. It has been the difficulty Using crypto the on ramps to user experience user interface, what are some of the things that you’re doing with ok coin that maybe helps that out a little bit and simplifies that for more unsophisticated investors or people that are new to cryptocurrency?

Haider Rafique – OKCoin
Yeah, the relationship I would share with you is when you think back 20 years ago, and there weren’t any digital brokerage products, or if there were very few people used it. Typically an investor with some disposable income and savings, and a portfolio would go through a financial adviser that called him up and say, hey, how should I How should I get exposure to the markets? What should I invest in? You know, that kind of thing. And that financial advisor would tell you how to allocate your you know, how to allocate your your savings, essentially, with digital brokerage firms, that sort of paradigm changed a little bit. People want to believe that they can actually take ownership of their investment decisions. So now you’re seeing this over the last two decades, you’re seeing a wave of retail investors, people with disposable income and savings, signing up for these brokerage platforms, and learning about what are bonds? How do I buy stock really easily? How do I get exposure to x company or that company? How do I read earnings reports, so on and so forth. So the user now the customer now is a lot more savvy than the customers a generation or two ago, they’re more familiar with these financial tools than they were previously. crypto is hard. There are a couple of aspects of crypto that have been really challenging for us onboarding, a big wave of customers with disposable income with an appetite for investment exposure. The reasons are like You teased up. Historically, it’s been really hard because of regulations and compliance and what have you to work with banks that that world has changed a little bit. Now you have products like plaid, you can integrate with and it’s really easy for anyone to use their credit card or their bank account acth rather, to fund their account. This is as simple as, say, downloading the Uber app and linking your your bank account to it. So you can start using that app on a regular basis. So the world looks much easier now than it was say back in 2017, when it was really hard to get get to, you know, purchasing crypto somewhere. And even if you did it, the trust factor wasn’t there. So a lot of people kind of shied away from it. So that has become easier. I think the part that really still needs a lot of work is oftentimes what I see having worked at Now, second, crypto company and advisor view in the middle is we are still using nomenclature and language as if we’re speaking to engineers, as if we’re speaking to people who actually understand crypto already have been in it since since its formation. But what we’re not doing a great job of is rewriting the way we we talk to our customers in a way that they understand. And customer you know their way, okay, coin looks at customers is a couple of different ways. We look at customers as folks who have not had any exposure to crypto, they’ve heard about it at family dinners or to a friend or to their financial advisor. And they’re intrigued. They wanted to sign up for a trusted platform, one that they feel secure, their money’s not just going to evaporate, somebody is going to just you know, get off the radar and their money’s gone. And then there’s another segment of people which, which is, you know, essentially people who’ve actually been trading a little bit here and there. They’re not professional traders, they have a full time job. But they like the aspect of trading. They’re a little more savvy. And even for them. This crypto language that we have, is sort of new and intimidating oftentimes. And then you’ve got the third category, which is like folks that are just day traders. This is what they do and live in breed. And what we’re finding is even those folks, that segment of people who haven’t traded crypto previously come into the crypto ecosystems and they’re kind of lost, they have to spend a lot of time educating themselves on you know, what does defy mean? ledger mean, or what is an explorer, all this kind of stuff. So a lot of the things that we’re trying to do at ok coin are not there yet, is fundamentally create a product create an experience that welcomes everyone. Any investor any trader, not just the crypto traders or investors who’ve been in it, and have high conviction and understand some of these things.

Rob McNealy – RobMcNealy.com
Well, I think one of the things you, I think are kind of alluding to is is the ease of use and that abstraction I agree with you, most of us in the crypto industry, we take for granted that our audience understands, you know, all these weird nuanced things about the technology and the language. But I think if we look at how we can abstract that away, I think that’s important. And I think, you know, crypto projects would be best served if they tried to figure out how not to educate people, I think that’s really difficult, right? To try to educate people on a new technology. People, for instance, don’t know how credit card work, you know, they don’t know all the middlemen, the swift technology and all that kind of stuff. We don’t when people don’t know that, they just know their credit card works. And I think that’s one of the things that I see it been missing from the conversation with dealing with the masses, is, you know, not about how we educate. But I think we need to focus on, you know, how do we abstract all that technical stuff that people really don’t need to know, in order to leverage and use the technology? What do you think?

Haider Rafique – OKCoin
I agree with you, I think a lot of the early projects that start that actually are trying to build or have a great utility or a use case, are often creating the project or the product in a way that captures the network that’s really fully sold in and knee deep in this stuff, because it’s easier for them, to onboard into a product, give them feedback, so on and so forth. So you have these like pockets of networks, and and communities that are being built around each of these protocols or assets or projects. And those folks are not your retail investor. So you keep seeing a shift of like these 3040 50 million, you know, crypto users around the world who go from project to project, what I’m not seeing is this like high velocity of increase in adoption. We have a lot of people in the world, not just 3040 50 million people. And I think that that onboarding new customers and new retail is not happening. My fear, oftentimes, maybe fear is not the right word is competitively speaking, we don’t necessarily focus on competition, we focus on customer experience. But as a marketer, I don’t worry about you know, other exchanges or other wallets and what they’re going to do or what have, you might sometimes oftentimes, my worry is that we’re in crypto, we’re doing all the hard work from an engineering standpoint and technology standpoint. And here comes traditional brokerage firms or consumer apps that have the trust of consumers. And they’re going to come in and turn on the knobs and now offer really easy exposure into crypto. And when majority of the market share that’s there to be had for us in crypto. I think that’s I think that’s the biggest risk to crypto industry is traditional finance and FinTech coming in and reaping the benefits of what crypto engineers have been building over the last 10 years or so.

Rob McNealy – RobMcNealy.com
Well, you know, I think crypto is doing it to itself, though, to be honest. And I’ve been in this space for more than three years now, which is in dog years is a long time. Right? And, but as a project, you know, I I’m always looking at what other projects are doing or not doing, as far as you know, doing outreach to other communities outside of the existing crypto community. And at least with us, we’ve tried to focus on with TUSC to not cannibalize. I’m not trying to steal people’s I’m not trying to steal people from Bitcoin, right? I’m not trying to steal a theory of people into our and bring them in our community. That’s not our focus, our focus is bringing in people that aren’t already not in crypto, and and I think one of the reasons people aren’t doing it is hard. Okay, it’s hard to go and do that marketing. It’s hard to go knock on doors and do traditional sales. And I think I think there’s a couple of reasons for that. I think one of the reasons is developers and engineers hate those activities. They don’t typically like to do business development and sales and marketing. And so they don’t, but I think the other thing is that going out and going out and knocking on doors, kind of goes against the ethos of decentralization, because now you have a centralized sales and marketing function. And a lot of people don’t like doing it. It’s hard. And I think, and I do believe long term, the projects that exist now that start focusing on those activities are going to be the long term winners. And I agree with you, I think is is it’s inevitable that traditional finances coming into the space, the question is, who’s going to be left standing after they do? And I think that those are things that people in the crypto world probably really need to think about.

Haider Rafique – OKCoin
Agree, I absolutely agree with you. I think it’s gonna be an interesting next few years. There’s so much opportunity for all of us, I think, to to get out of our comfort zone and, and, you know, see what we’ve not typically been comfortable with doing. I think there’s this sentiment in Silicon Valley or in tech or even in crypto. If you build they will come. Well, the reality with that that notion is, if you build and they will come takes you to a certain point in your product, then you hit a saturation point, take a look at Uber, they were running marketing campaigns, meaning they were creating flyers and shipping them to people at their homes at a certain period of time. And eventually, Uber was doing out of home billboard ads, they did all kinds of marketing to get to becoming a household brand name. All products do. eBay did it. PayPal has done it. I think I think my hope is that crypto is, you know, not just that, okay, coin, but the entire industry gets out of that comfort zone and realizes that if any of us want to become a household brand name, we’re gonna have to look at the playbooks of previous consumer brands who’ve done it really successfully. And what have they done that were reluctant to do? And, you know, how can we learn from them?

Rob McNealy – RobMcNealy.com
Well, it’s interesting, I read an article not too long ago, about that exact thing, like what are the top crypto or sorry, what are the top tech companies do to get their first you know, 10,000 users. And it’s pretty interesting to see all the all the little legwork that those guys had to do. And and you wouldn’t even think that those guys were hustling. But every one of those guys hustle, they’d been even watching what Etsy did and Uber and Airbnb and some of these projects, it’s a really good good little historical research project, if you or anybody in the audience has time to look at it. And we have, because we believe that is going to be important. And you have to have a plan to do that. Because I you know, I am like, I’m not a developer. So I think of things a little differently. I’m more of a marketer, like you. And when you go and look at, you know, I view crypto, even a decentralized crypto projects, they’re still a product, right? They’re still a service and used and they’re not somehow above the laws of marketing or supply and demand. And this is where that like, it’s, it’s interesting, because there’s a lot of engineers in Silicon Valley, they get this right, these tech engineers and these tech companies get that. And it seems like there’s it just hasn’t really translated yet to the crypto projects. And I really don’t know why that is yet. But I still think that there’s a lot of opportunity there for the the crypto products that do do that. And I think in the next probably five years or so, I think the projects that do focus on those things are going to be coming out in front after the hype and, and what I was saying earlier is about crypto is doing it to itself is that we’re getting all excited about you know, I would argue a lot of these defy projects and Ico kind of projects, they take away from the attention from the you know, the more legitimate, you know, projects that are doing the dirty work and focusing on just, you know, wheels down kind of stuff, but and I think we we’re cutting our own legs off, so to speak, because we’re focusing on just getting rich quick in these really obnoxious, you know, ROI of yield farming and things like that. And that takes all the excitement away from like, Oh, you guys are actually building something long term. And I don’t know what to do about that. Like, I can’t control that, of course. But I mean, what do you think? I mean, you’re an exchange, I know, you guys have been listing a lot of defy projects lately as well. And is this something that’s gonna be a permanent thing? Or is this just you know, the fact is, you know, we’re writing other hype cycle.

Haider Rafique – OKCoin
It’s a bit of both, I think, but don’t quote me on this, because I’m not an economist. I think the way I look at it is the other day, I got an ad in, in Gmail, my gmail account, which was from Marcus by Goldman Sachs, and it had this interesting message, which was, you know, get the highest yield on your savings, if you deposit to Marcus. And we we offer a yield higher than national average. So I went on their website, and the yield that they were offering on deposits was point 6%, I believe. And, you know, it occurred to me having been deepened, defied now, especially the last like month or so, going through our listing process. We have crazy numbers and defy reality is again, what does defy even mean to a regular person? Do we even need to say that it’s a defy product when we market this stuff? Or do we actually focus on the utility we focus on, hey, if you put x money in, here’s the API you can earn. And here’s why it’s important. You know, we’re in an economic downturn, there’s that really high unemployment rate, people are depleting their savings. You know, the markets sort of really volatile. So people are looking at other instruments in which they can protect their investment and their savings and in dire times, Have an outlet where they’re able to creatively earn, earn money for the lack of better term. We offer and defy their protocols offering 60% APR even more than that, right? And sure, there’s a volatility in that number. But the reality is a way I think about it as a marketer is, this is not about defy, if we go out there, if and when we launch our own earn product. And we go out there and we position our earn products, as Hey, you know, participated in our defi ecosystem or what have you, we’ve failed because again, we’re going after capturing that, that crypto user, not the folks that actually really, really need this stuff that have taken a hit because of COVID, the last six months or so. So if this is true, and how do we position this stuff? Ultimately, the utility is you have exposure to higher API, a ridiculously higher API than what you would find through traditional banks. Mark is being an example. So why don’t we go out there and not include any defy language and just say, subscribe to this or opt into this or put your deposit into this into this product? And you get between this and this percentage API, which is much higher than what you would find in traditional markets? Now, the obvious question, anybody who’s not in crypto among my network asks is, well, what’s the risk? Because crypto has this, you know, the optics and perception that it’s, it’s a, it’s a tulipmania? You know, it’s the Wild West? You know, there’s no regulation, your money can just completely evaporate. I think that world has changed. I think it is a lot more trusted now. For example, okay, coin, all your USD deposits are FDIC insured. So things are things are happening in terms of winning trust from customers, but ultimately, any yield product, high yield product, even if you look at markets, they have this like long, ugly legal disclaimer at the bottom of their landing page of their website, which says something along the lines of this is a really high risk instrument. Be aware. And that’s how we should educate people, retail investors and crypto users about these crypto instruments. Every every crypto asset has its own risk level, I think the best part we can do is a humanize the language focus on our utility, because people largely speaking outside crypto really don’t care about 99.9% of the stuff we talked about. So if I go and tell my mother and father or my uncle or somebody in my family, hey, if you put $10,000 in this instrument, you will you will have the potential to get exposed to 50% plus KPI. Suddenly I have their attention. Okay, great. Now I’ve done the first part. The second part is I need to warn them hey, by the way, this is a high risk instrument, don’t put all your savings in it be responsible, get the right level of exposure, I never go tell my friends, hey, buy bitcoin and just spend everything you have and just buy bitcoin and just keep buying Bitcoin. I don’t say that I what I tell people in my network is if you have a portfolio and you’re building a portfolio, make sure you have exposure to crypto, and I tell them about the high value assets and the thesis behind them. And then it’s up to you and your risk appetite, how much exposure you want. Is it 5%? Is it 10% maybe you have higher conviction, you want to go a little higher, but I think that’s generally how we should all explain this stuff if we really want to attract the broader market.

Rob McNealy – RobMcNealy.com
I agree and so I you know, personal financial literacy is kind of one of my little you know, pet peeves in the United States and, and when I see people saying I’m all in on crypto that scares me To be honest, because I think that’s how people get really, really wrecked. And, and and definitely I’m very pro crypto. But I also am very pro This is super high risk in a lot of these projects. And and I don’t think a lot of people are good at assessing risk. And I don’t think a lot of projects, kind of point that out. But I think that’s one of the things that I see as a kind of a thread that weaves through the crypto world is that you get a lot of people that are not financially literate, that are investing or mal investing or investing too much in things. And and ultimately, I don’t like seeing people get hurt because of that. And I wish more crypto projects would say what you’re saying is figure out a port, you know, you should have savings outside of crypto In other words, and you should have investments outside of crypto, it’s prudent to do that. And I’m glad to hear that you at least philosophically also agree with that. And I think I think it’s important and I think you’re right. I think we need humanize that language. Um, I know we’re getting close on time but….

Haider Rafique – OKCoin
Banks By the way, are not not doing it any or traditional brokerage firms are also not like the you know, the North Star you want to look at, for example, if you sign up for TD Ameritrade or any of the brokerage firms out there, and you have to see $100,000 deposit in your account and you’re day trading, you’re going in and out of positions. Eventually, very quickly, TD Ameritrade will say, hey, by the way, Rob, you know, we see you have 100,000, how about we give you margin, how about your five for margin, so you can trade more. And I think like, getting it back quickly, and I speak, I say this from experience, there was a time that I had some disposable income. And I started day trading. And it was scary how quickly I started to get that five x 10 x leverage from from one of the brokerage firms that I was trading on. So my point is here, it’s not that crypto needs to take that responsibility. These tools have now become consumerized, you now don’t have the financial advisor or the middleman warning you. Hey, Rob, be careful what you’re doing here. So now you have access to these really complex instruments that typically were, you know, designed for professional traders or investors. Now people like you and I can sign up for it. And within a couple of minutes, we’re off to a start. So I think the responsibilities across the board and finance we all need to do a better job of driving responsible investing behavior.

Rob McNealy – RobMcNealy.com
You know, I couldn’t agree with you more on that either. I really, I’m really glad to hear you say that. So Hyder, where can people find out more about you? And okay, coin?

Haider Rafique – OKCoin
So, my Twitter is HaiderSF, it’s pretty easy to find me. But I think more importantly, for your audience, I would I would want them to come on. OKCoin and give us a try. We do have the lowest fees. Unlike the challenges that other exchanges are facing in crypto, we have really low downtime, most of our downtime is related to announced maintenances. So what will not happen is the market is hot and you’re trying to place a trade. And suddenly you can claim as I say that worlds are locked and your deposits are locked or you know, the fees are like just ridiculous. We’re we’re trying to build a trusted platform we have a lot of work to do. We have a lot of high quality assets to add. We have a lot to improved in terms of our user experience. But I can assure everyone that we pay attention to every customer. We’re looking at everyone’s experience and we’re trying to make it better. So if you’re ultimately looking for an experience that’s trusted, and you’re gonna you’re going to be heard. I think I would give Okay, quite a trial,

Rob McNealy – RobMcNealy.com
either. Thank you so much for coming on the show today. I know you’re busy and I do appreciate your time.

Haider Rafique – OKCoin
Thank you. Thanks for having me. Talk to you soon.

Rob McNealy – RobMcNealy.com
And folks, I’ll have all those links up at Rob McNealy calm and make sure you hit that subscribe button. We got a lot of other great shows coming up and you’re gonna want to stick around and thank you so much and you have a great day.

Episode Links

Audio Interview
Video Interview
Interview Transcript

Haider Rafique – OKCoin

Haider Rafique, the Chief Marketing Officer of the OKCoin crypto exchange, talks with Rob McNealy about defi & adoption in this transcript.

Lennix Lai – OKEx Exchange Transcript

Lennix Lai - OKEx

Note: This transcript was automatically generated by artificial intelligence (AI) and therefore typos may be present.

Rob McNealy – RobMcNealy.com
Hey folks Rob McNealy here. And today, I’m pretty excited. We are talking to Lennox law. He’s Director of Financial markets of the oke x exchange. And they’re one of the biggest exchanges in the world. And I’m really excited to see what they’re up to. So Lennox, how are you today?

Lennix Lai – OKEx.com
Hi, Rob. Yeah, sure. I’m really appreciated as we on the call. We were happy to see you folks here.

Rob McNealy – RobMcNealy.com
Well, so, um, let’s just jump right in here. And, you know, tell me a little bit about Okay, x hat, and how did you get involved with the crypto exchange world?

Lennix Lai – OKEx.com
Yeah, my other background, the traditional finance background. So basically, I was a quon trader in Hong Kong for around 10 years. So I’m, I’m also kind of like compliance and regulatory guys in Hong Kong. So, like three and a half years ago, that’s where we’d like to join. Okay, yes. Because Because the okay group back in the time, would like to expand the exchange business internationally. back in time we are, we’re actually very big in China already. We overing Bitcoin Exchange servers for local currency, that becoming one of the best one of the biggest crypto exchange in China already, and we would like to expand to the international market. So that’s the reason I joined and starting to build and branded as the name of Okay, yes, the Okay, x name, actually very benchmarking Hong Kong exchange is also called H key x. So we will lie to branding, our exchanging expertise, and also the traditional financial knowledge, so to brand in the world to bring crypto to traditional finance. So that’s how it gets done for Okay, it’s like three and a half years ago.

Rob McNealy – RobMcNealy.com
So what would you say some of the biggest challenges are of running an international exchange right now.

Lennix Lai – OKEx.com
So we are actually one of the earliest player in the field. So back its time we gather a lot of good player like pinole nacer, but Phoenix, Khan base already in place cracking, that’s all the big we’re, we’re accurate, very, very small compared for we’re the biggest player back in the field. So good. So we think we we are facing several challenges. First, we are primarily and very, very Chinese based exchange. So everything in terms of the team in terms of the product, in terms of the gods are all very, very Chinese. So we have to change the entire organization style, the language or the culture within the organization. So if you think about it, every every, every anyone will ever run come in your thing that would actually agree that changing the culture changing how an organization work, can put upside down use agile for football. So bringing the international value and international culture back to your very China exchange is the most complex and complicated task that we ever engage. And also, we we do have a lot of problem on our product. So so we have to SM be a team with the financial known edge cells to completely redesign for every single aspect of all okay, yes, from all across all our products, spot derivative, so everything else from the gods. So I think that might be yourself a big challenge we we come across, but at the same time, we are facing regulatory challenge all around the world. So that we have the assembly of really big compliance teams to tackle regulation everywhere, and apply proper licensing and getting the proper sandbox in crypto. So while we’re talking to regulators, we have splaying of this as well to convince that we are trying to be a good guy. So we have to, I think, in general, we, we are actually building a rocket, but at the same time we are driving a Ferrari. That’s, that’s the whole that’s the summary.

Rob McNealy – RobMcNealy.com
Well, you know, I like Ferrari, so that’s good. But so what would you say the, the biggest challenges from a regulatory standpoint, at least geographically, which countries are the hardest ones to work in?

Lennix Lai – OKEx.com
Yeah, I think back in time, like 2017 2018 our, I think all the Gulf Money can’t like being skeptic or some, some of them are actually quite hostile to, to crypto or to virtual currency. They have no knowledge at all to what’s going on in Bitcoin area. They are actually interest but they think that virtual currency or crypto actually engage a lot in unless it activities, anti money laundering. There’s some of the areas that regulators are mostly very concerned. And at the same time they’re trying to fit in, they’re trying to bring crypto try to explain crypto in a way that the current regulation that they’re already implementing, they’re trying to fit and crypto onto their current regulation, which is very difficult. So. So back in 2017 2018, most of our job is to explain to our regulators, to all those regulated, hey, this is crypto, this is just some kind of digital xx. And this is some kind of a digital asset that we would only allow KYC people to buy or sell, and exactly like a meeting your financial standard that your AML standards, so to explain all those stuff to all kind of regulators. So we starting to see some progress. So we see the US come over digital as a framework. We see some of the government like multiskilled, Malta government to have a virtual currency framework. We see Korea and Japanese government, they do endorse and have some kind of regulation related to cryptocurrency after after the industrial of commitment for around two years or more.

Rob McNealy – RobMcNealy.com
So would you say is there a particular jurisdiction that’s been harder to work with?

Lennix Lai – OKEx.com
I think there’s no jurisdiction that is hard to work with as long as they they are open to talk about are they’re not being hostile companies shut the door. Most of the jurisdiction I would say they would eager, eager to learn were, were very eager to learn from the biggest player in the field. They will like to understand they of course, they will raise a lot of question. But each of us have the jurisdiction of particular friendly, like a Singaporean governments and the Korean government. And even the Maltese government actually quite proactive to want to draft local regulation or specific regulation just for crypto. The other jurisdiction, I think they are very interest, they would like to bring in the crypto, the crypto xx into debt, the security law, or the derivative law, they are interest, but at the same time, they were actually very difficult for them to to actually blend in the current regulations.

Rob McNealy – RobMcNealy.com
How do you see things like the travel rule affecting your operations?

Lennix Lai – OKEx.com
I think the travel rule did actually spend spent a lot of effort for us to completely redesigned out how the how the AML KYC would be implemented into into the current operation. So before that is accurate, we don’t need to, we only need to worry about the global standards update our KYC AML AML. But travel rules actually means that we have to specifically design our checking procedures for all the European biggest customers across the field. I don’t think that is a trouble a big problem to our operation. But it’s just caught one of the costs of the business if you want to play the field with the big boy, we want to be a global platform. That’s just part of the cost of operation. We’re happy to pay for that.

Rob McNealy – RobMcNealy.com
So do you have much of a footprint you would say in the United States at this point?

Lennix Lai – OKEx.com
We don’t have we don’t allow us customers at the moment that is fun. It’s fun time.

Rob McNealy – RobMcNealy.com
Is that something you’re going to do in the future? You think you don’t have to look if it’s proprietary you don’t have to answer but I was just curious is that on your roadmap?

Lennix Lai – OKEx.com
Actually we do have a partner exchange as you belong to a similar group is called okay con. So a ready get up basically orderlies in in us say over the open to the US customers. So it’s really completely different platform is that is basically a partner with Okay, yes. But only that the product that available on Okay, Khan platform is very very different than OKEx, but the technology and the and and the matching engine is using similar technology OKEx.

Rob McNealy – RobMcNealy.com
Actually got the one of their marketing guys is coming on my show on Wednesday. This week.

Lennix Lai – OKEx.com
That’s awesome.

Rob McNealy – RobMcNealy.com
Sure. So yeah, it’s gonna be fun. And so I think, you know, that’s always fascinating to me is, you know, how, you know, the regulatory piece of this looks from the inside. Like I always say, when I’m when you know, I’m kind of mixed, are kind of in a weird position, because I also have a project, but I’m also you know, and you doing a podcast and things. So it’s like, when I see crypto from a very different angle on because on the project side, you see, you see the world very differently in crypto when you’re working inside of it. And, you know, you see all the warts, and, you know, the good and the bad all the way around. But I always like to hear, you know, what does it look like on the exchange side, because, you know, there’s a lot of there’s a lot of, you know, unscrupulous exchanges out there. And I can tell you, having dealt with several of them in the past myself, and so that’s why I’m always interested in you know, the more legitimate exchanges like okay, x in what they’re doing and how they’re handling it. So let’s shift gears a little bit. You know, there’s, there’s a lot of exchanges out there. That seemed to be dodging regulation as part of their business model. I’m not gonna name names. Mm hmm. But there’s some exchanges that you don’t even know where they’re where they’re domiciled.

Lennix Lai – OKEx.com
Mm hmm.

Rob McNealy – RobMcNealy.com
In the row, and so since you don’t know where they’re domiciled, and it’s even interesting, even with smaller exchanges, you know, you go look up try to look up information on the exchange. And on coin market cap, it says they’re based here, and then you go to their website, and it says, their base there and you never know where they’re really located. And, and so that’s always kind of a red flag for me, is, especially at the centralized exchange, because they’re not you don’t know where they are. So there’s supposed to be a centralized routing, that correct, there’s no central location to go. And I’m not saying you should go after people, but, you know, you don’t know who these people are, in some cases or where they are right. And it seems like some of these exchanges are doing it deliberately to avoid complying with you know, international regulations. Again, not going to name names but how do you guys compete with that?

Lennix Lai – OKEx.com
We don’t need to compete wave the wave this some the exchange was smaller Sykes Chang that’s trying to doubt regulations, okay. He exists 1000 people group already so we cannot doubt any regulation, we actually equally comply to the jurisdiction that we allow to surface that we offer our service, we cannot we have to we have 1000 people to be responsible. But for all the other smaller sigh exchange, they have the reason maybe they have the reason to, to try and get up regulation as much as they can, because some of the really small sites chain is kind of like us using hidden ranch approach. They just want to open a small exchange trying to grab the users based on can’t if there’s some trouble there’s as close down and reopen Yeah, in another one using similar technologies. And so, so, so, of course, I would like to invite other users to be aware of the of the of the of the really, really small size exchange, and they you and you basically apparently you cannot find where they are they do they do not have a register overs, or they do not have a property you may you don’t need to know where they base, they don’t show up on time. So, and some exchanges do not have a long history with short history you you have to be be aware of that because talking about central exchange, meaning that all the crypto acts act as an custody with the with the hand of the founding team or the wallet team. So so so actually, you carry a lot a lot of counterparty risk, if you will lie to trade with them. So girl someday, some of this most exchange also do not have a high priority or high high scrutiny of the project that allowed it to list on the exchange. Most of the exchange mode most of the project is required to pay a huge sums of listing fee in order to get listed two bonds of small exchange that grabs exposure users, traders as they can and try to win the way in in a relatively short period of time. The the opening exchange in terms of module cars is relatively easy. But running an exchange operation with proper cyber security Republic compliance team, the proper operation team is take the years of years of efforts. So I would also always to emphasize the SSA only focus on the major exchange in the world because they already there they have the history and and and protecting your crypto execs from millions of millions hacker in the world is not an easy task. It’s a date and day by day commitment. So we we care a lot about our reputation, we care a lot about regulation, we have to comply everywhere in terms of regulation. So it’s I don’t think it’s the as a direct competition with us, compared with the other smaller exchanges.

Rob McNealy – RobMcNealy.com
So right now the the best I can see there’s at least probably, I don’t know, 500 exchanges out there right now floating around. And there seems to be more popping up, you know, every single day. And there also seems to be a lot more decks is kind of in various, you know, stages of development. Oh, how do you see the market for exchanges in the future? Do you think centralized exchanges are going to be you know, the most popular? Do you think dex is going to become more popular? Do you think there’ll be more exchanges out there fewer exchanges, what do you think your? What do you think the future is gonna hold that way?

Lennix Lai – OKEx.com
Yeah, I think I think that the potential with DAX is actually for interesting. So that’s can be the only problem for DAX maybe before or, or for this few years, as people have been talking about. It’s mostly related to the capacity, the technological capacity of whatever chain, whatever blockchain that you’re implementing. So but we see silver these years that we see a lot of breakthrough in the under underlying technologies that have a huge promise on on the TPS, that transactional per seconds, right now, per blots. So those look like that DAGs, if they can manage to handle a search even a certain portion of the trading volume, that’s currently our central exchange is currently trading per day, I think that would give us an interesting use case potential to crypto so that everyone will would able to trade universally. And also everyone collects their own token universally, and that technologic technology is free. It’s open source. So everyone would have the capability to operate to open it DAGs and, and and eventually, everyone can compete with each other with a unique event age or unique appetite to different tokens. So tasks can be can be very interesting. Can I think if somehow, if the technic tech, technical side, transform your technical side becoming really promising, like the TPS reaches certain thresholds, and it’s safe enough to be trustable to two to four traders, and the UI and UX the user experience side of using das has been substantially improved it the tags in terms of trading volume and the size can could be grows exponentially. But while the central exchange, I think that’s still play a very important a crucial role. In in crypto in crypto x RP uses carry a lot of expect in in, in, in in define. So for example, like center central exchanges do are happening to having a lot of products very complex product that’s basically right now cannot cannot able to cannot able to undertake by the tax for now, for example, like derivatives of perpetual swap, we’re talking about millions of millions of borders or of thousand thousand trade per days, but it cannot be executed with our proper high frequency matching engine at this point moment.

Rob McNealy – RobMcNealy.com
So essentially, as the technology improves, and maybe you start getting these non custodial cross, you know, chain indexes, those are probably increase over time, but it’s just not quite there yet, I guess.

Lennix Lai – OKEx.com
Yeah, I think I think it’s getting a lot faster right now, but per lepromatous standing, we’re talking about some of the Kings don’t care about thousand TPS compared to 20 or 30, TPS in one or two years ago. So if it is go around two or three times more, I think we can handle probably on spot exchange ready. And some of the really, and, and I’m talking about some of the DAX, that’s able to manage derivatives, if they are able to manage the liquidation engine of the derivatives under this certain time of DAX under that under, under, there’s a dow around 1000. TPS, that will be so interesting because because read when you’re talking about highly leveraged Chang, when the market is move, you have to execute and use, you have to send your orders in the blink of a second otherwise, otherwise, you’re you’re you you would trigger Casa de liquidation or you create, you create problem of trouble in onto your problem, I’ll do a platform. So that I will be very, very interesting to see that how does handle highly leveraged instruments?

Rob McNealy – RobMcNealy.com
It’ll be interesting. What’s your take on the latest sushi sandwiches and hamburger de fi products that are out there?

Lennix Lai – OKEx.com
Yep. I think that everything is everything is looking to be right now is having having an insanely high yield for some of the token, I think, in general, I think is an other way for distributing token or distributing newly the newly minted token to user this looks exactly like the another way of the Ico or default token in 2017. Or, or or or the ieo. That that changed initial offering is a new or or B. I think it does vary because airdrops so whoever carrier one token you got, you got a candy. We’re called airdrop tokens free token from the token. So similar mechanism. The ultimate purpose is is also a sales of my own newly minted token. But what defy or sushi or hamburger was over sashimi is actually having a mechanism in place, meaning that you have to stick one token first, for for an for an odd token in order from any other token. So that would that actually the sticking components normally is over collateralized, meaning that you have to deposit more token first, in order to in order means or farm, relatively smaller size of token. So the risk compared to other risk compare if the other the other? The other mechanism dies? The other distribution mechanism? I think that would be a lot a bit a bit more healthier to token holder. And I think that define innovation would last for really a long time. I think. I think I agree. The the either inflation rate or youth right now is insane is not sustainable. But the way that how we understand defy the way that people are interesting participant divide a project that allowed it or that we would be perfectly to participant divide would be becoming a really, really hot trend for for upcoming years.

Rob McNealy – RobMcNealy.com
I think the future is going to be very interesting in this space. I you know, I’ve haven’t been shy. I’ve been saying that this, in many respects is Ico 2.0. And, and I just hope that the fallout that comes out of this is good innovation. But it’s gonna crash back down. Right? I think you said it too. It’s not sustainable. What we’re seeing out there, but what I’m hoping is that there’s new innovation in the technology is and I’m hoping that’s what comes out of this. But I’m afraid we’re probably gonna get a lot more regulatory scrutiny from this, as well. So it’ll be interesting to see how it plays out.

Lennix Lai – OKEx.com
Yeah, you’re you were there. You cannot deny that every new maybe new technology or new money or new new way of thinking has to be crazy from chaos. So So these kind of define chaos, this might not be sustainable. The river market corruption. Now were they there Painful correction to their way might be a rousing, regulatories good knee, as you mentioned, but eventually these kind of token distribution method would be an interesting insight for the upcoming define development. So people will actually think about, hey, that’s going to work. But if we want to do it sustainably, I think we have to change it to certain matter. And that will become a healthy growth order for the industry.

Rob McNealy – RobMcNealy.com
Totally agree with that? Um, so where do you see crypto changing in the next couple of years? What What do you think will be the next big innovations coming out and say the next three to five years?

Lennix Lai – OKEx.com
Wow, that’s Sir, I would. I would, personally Personally, I would the very exciting dad’s similar model as in Filecoin, that people can actually share data on chain and tray, that data on chain with the development of fire codes so far gone, it just might be a spark of the entire fire. So, so similar project lifelike on even what your tablet data privacy, your personal data that can be exchangeable, or, or your physical might be stuck with storage, you can just tray, or buy, or sell your own personal storage within every kind of computer that can be traded or transact, via on trading. But these economic and trading mechanism would be an interesting insight or interesting. Hence, for the other data driven industry. So people can sell everything if they carry a data. So fire icon might be the success of the fire gone, hopefully, would become a very interesting development for crypto for the next three and a half, three and five years because right now, if I can sell my idle storage, either virtual drive online, like like a cloud based server, but but so that I can basically sell everything I can using the exact similar mechanism, or similar blockchain or similar token omics to say everything that have data currently available. That’s might be the beauty the very first through adoption for blockchain technologies.

Rob McNealy – RobMcNealy.com
I think that’s very interesting. And, and I think there’s gonna be a lot of interesting use cases. For instance, I really have a library, you know, library credits, I like bat is doing the brave browser, where you actually are developing ecosystems that are using the crypto. And I think that’s important. And even with our TUSC project, that’s what our focus was, is is, you know, getting people to use the coin, not just speculative hype. And and I think that will be the future. And I think the big or most, I think some of the the products that are most likely to be mass adopted in the future are going to be ones that you don’t even think about right now. They’re they’re going to be ones that just slowly start building up an ecosystem where people are using their coin for a practical purpose. And to me, I think that’s really important. So I guess that one last question for you kind of wind down? Do you think there’s too many assets? Do you think that there’ll be more assets in the future, like more blockchains more coins? More tokens? Or do you see that that over time, that’s going to consolidate down?

Lennix Lai – OKEx.com
Um, I would say, bro, for To be frank. So I think the the barrier of cause of issuing or maintaining or creating tokens for hype or speculations, whoo, still be there is this part of the crypto ecosystem, but but when you when you get speculate more people will lose money. And people getting smarter and smarter, when it gets smarter. And when they get the a lot, a bit more cons cautious, a lot a bit more conservative, they were looking to they would be tend to be looking for the true nature, the true adoption of certain tokens. So that money will be will be really concentrating back into 1% of top 1% of the token to actually bring the value of the world that we’re starting to look at fundamental. So I think I would say New token was still there. There were a lot more, getting a lot more sizes. But but growing, so going from yours, right took about one two years or more. I think the capital, or the capital that all catered to crypto access will be mostly or heavily concentrated to a real project eventually.

Rob McNealy – RobMcNealy.com
Yeah, I think so as well. I think what I’ve said I’ve said this in my circle of friends is that the first kryptos does start getting a real adoption even, you know, Nish adoption, not even mass adoption, but just niche adoption are gonna eventually change the way the speculative part of the market values those projects

Lennix Lai – OKEx.com
Right , correct.

Rob McNealy – RobMcNealy.com
How I see it is you have billion dollar market cap projects that don’t have any customers.

Lennix Lai – OKEx.com
Correct. You’re right. You’re actually you absolutely right. I think people right now is like looking for answer right. If you can save a spark to fire and you provide true answer. You got all the you got everything. You get all everything that’s pay people for speculate money. We’re just crunching and advice to your own projects.

Rob McNealy – RobMcNealy.com
Exactly. Linux Ly, where can people get ahold of you? Sorry, how can people find out how can people reach you?

Lennix Lai – OKEx.com
So I think you can basically reach out now traitors and my email is Linux at okay yes.com You can find my traitors that us as well. So you can reach out anytime. I’m happy to answer all the questions.

Rob McNealy – RobMcNealy.com
Thanks. Thank you so much for coming on the show today. I really appreciate your time and I’ve learned a lot.

Lennix Lai – OKEx.com
Thank you, Rob appreciate, talk to you again. Thank you. Thanks so much,

Rob McNealy – RobMcNealy.com
You have a great day.

Episode Links

Audio Interview
Video Interview
Interview Transcript

Lennix Lai – OKEx Exchange

Lennix Lai, Director of Financial Markets for the OKEx Exchange, talks with Rob McNealy about the global crypto trading and exchange industry.

Brad Michelson – Crypto Marketing & eToro Transcript

Brad Michelson - Crypto Marketing & eToro

Note: This transcript was automatically generated by artificial intelligence (AI) and therefore typos may be present.

Rob McNealy – RobMcNealy.com
Hey folks Rob McNealy here. And today we’re talking to Brad Michelson. He is a crypto marketing guru based in New York. And today we’re going to learn all about the ins and outs of marketing in the crypto space. And I think you see this a lot with a lot of developer led projects out there that marketing seems to be the thing that developers hate a lot. But I want to get a Brad’s kind of input and his take on things. So Brad, welcome to the show. How are you today?

Brad Michelson – eToro
Doing great. Thanks for having me.

Rob McNealy – RobMcNealy.com
Well, I appreciate you taking the time to come on and talk with us. Marketing is something that it’s near and dear to my heart. And I think that in really for there to be crypto mass adoption, I think marketing, at least from the crypto side of things really needs to ramp up his game. And I want to kind of explore that a little bit with you today if possible, but but before we dive into kind of all this, you know, marketing stuff. Let’s talk a little bit about you. What’s your background and how did you get into crypto marketing?

Brad Michelson – eToro
So I originally started out in e commerce marketing, so I was at an agency for a few years and learn the ins and outs of paid media over there. ended up leaving as the director of strategy at the agency went in house to an e commerce brand and didn’t have the best time and then I when I was looking for a job from there, I found my first crypto company so I jumped into that. Two feet forward, which was pretty fun. I was at helped launch dex which was really cool and obviously a big learning experience. It was after, you know, the Ico boom, it to a degree like the the place I had worked had already completed their Ico so it was fully funded and they’re building out the platform. And it was also right around the time when Facebook and all the social platforms started banning crypto ads. So that’s one of the biggest differentiators between traditional marketing and crypto marketing is that you don’t have a lot of the same levers as you might elsewhere.

Rob McNealy – RobMcNealy.com
So what do you do about that? You say your crypto project, how do you get your brand out there? How do you market a crypto project effectively?

Brad Michelson – eToro
You know, a lot of it relies on social media and it’s really community building and not in the way that Ico projects would create a telegram group and just like get as many people in there as possible and use it as as like a pumping mechanism. It’s not really like that at all, at least anymore. It’s a lot more reliant on word of mouth and just general community sentiment, being able to go on Twitter, having your brand post something, you know, you’re not necessarily being like, outrageous, but you can just post it in an Oculus. bullish tweet and you’ll get hundreds of likes out of it just because of the goodwill that you’ve, you’ve grown in the community. So a lot of it is just sharing and echoing the sentiment of your target audience. But on top of that, you still have to make gestures that deer, the brands to the community. So with some people it’s being you know, a really approachable brand with very easy to understand. messaging that maybe is like a really easy onboarding to the ecosystem, for example, lolly they do a fantastic job with that. Other times It’s, you know, something like what we do at etoro. Or we’ll work with, you know, a famous celebrity or something like that. And we’ll do a commercial with them. And that way we’re, you know, bringing in more average consumers into the the ecosystem. But I think every brand has their own different approach. And it’s sort of the key really is just finding what makes the most sense for the people that want to use your product and expanding that as much as you can.

Rob McNealy – RobMcNealy.com
So I was around when the Ico craze was going nuts. We started two and a half years ago with Tosca, and it was interesting because we could never even get an ad, you know, placed with any of the social media platforms out there primarily, you know, Facebook and stuff. But that seems to still be kind of the problem. And in the last two and a half years, I mean, the Ico world is largely dead, at least in the United States right now. The the scam pump and dump groups are mostly You know, quiet at least right now, though they’ll probably return when you know, the next Bull Run kind of jumps up. So the question I would have with you is, why is there such a still a blanket, you know, community standards problem with crypto related stuff on the major platforms? Why are they still banning it? The space is so much different and more mature now than it was a two and a half years ago. You got any insight of my why that might be?

Brad Michelson – eToro
I think it’s a risk thing. I think that that there were a bunch of lawsuits around the time of the Ico boom, both to the ad platforms and you know, not necessarily just Facebook and Twitter, but predominantly them, as well as other platforms where people are saying, I saw this advertisement on your platform. I assumed it was legit. And it turns out it was a huge scam. I think that everyone by now has noticed the the increase in attention on not just content across these social platforms, but the you know, whether they’re offensive or whatever else or they’re predatory, there’s rules on tons and tons of different industries. And obviously, finances is a big part of that. And that extends into things like predatory loans. And payday lenders can’t necessarily advertise on Facebook or I think even Google, you can’t advertise those products anymore. So unfortunately, crypto is still in one of those categories. But we have seen a little bit of movement that hopefully over the next little while this will start loosening up a bit. There have been rumors for the last little while.

Rob McNealy – RobMcNealy.com
Yeah, it was interesting. I saw today on my social media that there was a couple social media content people that said they got locked out of their Twitter accounts, which I thought that was interesting. Then and then most of the stuff they post is not what I would call spammy or shilling by any stretch of the imagination. than anything, and it seems like it’s pretty alive and well. And I’ve seen this where a URL will, you know, be banned from, you know, Facebook or Instagram and there’s like, zero, you can’t even appeal. There’s not even a process. There’s not a button to push. And so it’s interesting. I, you know, there’s a lot of rumors out there, especially among the conspiracy theorists that, you know, they’re they’re trying to, you know, head off any competition, you know, at least on the Facebook side would like a Libra out there, for instance. So they don’t like the competition from other crypto projects. I mean, do you think there’s any merit to something like that? It seems it seems a little out there for me, but I was just wondering if you’ve heard anything along those lines.

Brad Michelson – eToro
I really doubt it. You know, Libra, especially at that time was so far away from even launching, and it’s even far away now from launching, and it’s just not really, it’s not really also what that business models competing with. So I just don’t think that they’re related personally.

Rob McNealy – RobMcNealy.com
So over the last last couple years, it’s been interesting, you know, watching crypto marketing from the inside as a project. You know, we, you know, there’s so many stories that I’ve heard about at least experienced myself, where during the Ico boom, you know, just to get an interview on a podcast like this might cost $10,000 or more depending on what it is. Is that changing? Now is that Yeah, easier,

Brad Michelson – eToro
way easier. I don’t think I’ve seen a podcast that charges to interview in a while now, which is a really good change. You know, that it was extremely hard to get on, you know, any of those big YouTube channels or, or whatever it was in 2017. And then it moved into podcasts a couple years later. Obviously, the space for sponsoring all these shows has expanded significantly. There’s a ton of money that goes into that. And, you know, I’ve been sponsoring podcasts and influencers for a few years now and I just think it’s going more legit. There was a time where it was like wild west amateurism, and it’s finally matured into like a legit marketing marketplace kind of for sponsorships.

Rob McNealy – RobMcNealy.com
You know, it’s really kind of funny because when we started Originally, I couldn’t get on an interview. Because we didn’t do an Ico we had no cash to spend, you know, lots of money to get on, though, actually, it’s kind of funny, because one of the reasons I started this podcast, because I said, I’m not gonna charge and I never have I’ve never even taken a sponsor. I don’t do this to monetize. I do this because I genuinely like the industry. And I like to talk to cool and smart people that are doing cool things because I learned from people like you coming on the show. So I always thought it was funny because this whole podcast was a response to that. And originally, when I started this, I didn’t really want to do this. But I do like talking to really cool people. And so it’s just interesting, you know, kind of seeing it, but When I’m trying to get interviewed, I’m seeing it. It’s a lot different now than it was two and a half years ago. And I think that’s a good thing for the industry that the advertising the marketing piece is starting to become more formal, I guess, and a little more legitimate and honest. And I think that’s good.

Brad Michelson – eToro
I think there’s a reason for that, too. I think that with a lot of crypto companies, like when I started at my first crypto company, most of the opportunities that were available were companies, Ico companies that were gonna pay you in their tokens. And this was before the Icos. So they were like pre mining tokens to give their employees and in the hopes that the token will pump at the Ico and you’ll get paid off by that, but then we’re going to pay you otherwise. Now, you it’s you’re going to be really hard pressed to find that that’s not really you’re not going to really find that anywhere. A lot of crypto companies now are at least reasonably well funded. So They can pay you normal salaries, some more than others. You know, these things come with benefits. And there’s HR along with it. And these are real companies as opposed to in that 2017 2018 range where it was very bootstrapped, and like semi real company and people were really leaning into the whole decentralized company thing, which I don’t know necessarily if it materialized in the way that they originally presented it. But the way that it’s become now is his own unique thing, which is really exciting. But it’s nice to see that it’s formalized in that way and with those budgets for the businesses come budgets to to hire legit professionals. So you know, most of the people at most of the projects you’re aware of the big ones at least, they didn’t come from crypto, a lot of those people aren’t crypto native. Even my team there’s half of us probably aren’t crypto people I’m lucky enough to have been in since 2012 is when I discovered it. So there’s, you know, this whole back catalogue of knowledge that I can pass down to my team and to other teams. But it’s a double edged sword, right? Because people come in with traditional marketing experience or traditional finance experience, whatever it is, and then they got to catch up on the the finer points, and especially in marketing, you know, the audience is so sensitive to certain signals or values, that there aren’t a lot of opportunities to screw up and figure it out afterwards. So at first, it’s a bit of a learning curve, but it ends up being huge for the the attracting talent in our industry in the long run.

Rob McNealy – RobMcNealy.com
So you said earlier and I know this to be true as well is that there’s a lot you know, the the tools that you have for growing are a lot more limited, because, you know, you just can’t go say, Oh, we need 10,000 users. To download our app that’s, you know, between five and 10 bucks a user, whatever it is, just go buy the ads and boom, you know, we build it out. You know, that’s not really something you can do with crypto very easily. So when you have an when you’re hiring, you know, marketing professionals and you bring them on your own team that, you know, maybe aren’t, you know, crypto natives, but they come from a more traditional marketing background. Have you found that they see that as a challenge? Or do you think they get more frustrated that they don’t have as many tools in their toolbox?

Brad Michelson – eToro
Depends on their background, if if they had like a pure paid marketing background like I did when I was younger, then it would be a little head spinning because you’re used to having a fashion brand that you just run ads on Instagram on. And you can test you know, a million different iterations of copy and creatives. And there’s a whole universe within within that realm of marketing, but it really forces you outside your comfort zone. It’s not that paid media disappears necessarily, right. There’s ad networks. outside of just Google and Facebook, and the obvious people, you know, buy sell ads is one that you see relatively often. There’s a few others. And you can also do, you know, native placements within a bunch of different websites, like you can buy native placements on Yahoo or, you know, CNBC or TechCrunch, even. But they don’t necessarily come with the performance metrics, or the performance history that Google or Facebook might. So someone in that scenario, initially, in theory would be a little shocked. And there’s a bit of a learning curve, but you’d hope that that person would be able to, you know, dive in and come up with some new best practices for themselves.

Rob McNealy – RobMcNealy.com
So that’d be things like, you know, programmatic and those kind of ad buys that you’re talking about there that which are not the normal Google AdWords kind of thing, but, you know, dedicated ad networks that are already placed on specific websites.

Brad Michelson – eToro
Right, exactly. And then the The whole universe of app advertising, which is a whole other thing,

Rob McNealy – RobMcNealy.com
That’s interesting, tell me about that.

Brad Michelson – eToro
So in the same way that there are display ad networks on whatever website you’re on, there are also those really annoying ads that show up in apps, like when you’re playing like a puzzle game or something and you lose, and then you have to watch an ad for like 15 seconds, those kind of ad ad networks where they’re gonna get placed in games or news, news apps, or whatever it else, whatever else it is. And they’re not necessarily run through Google. So they might have less strict rules in order to attract people like crypto companies or other smaller industries that are not as easily accessible through Google.

Rob McNealy – RobMcNealy.com
So what have you found to be the most effective, you know, tool out there for getting out to as far as normal advertising? Would it be the app advertising? Would it be the programmatic? Which one Have you found has the best, which one of those has the best audience that are receptive to the crypto messaging?

Brad Michelson – eToro
It really depends on what your objective is and what kind of marketing you’re doing. So if it’s brand marketing or performance at etoro, we’re lucky enough to actually be able to run ads on Facebook and Twitter in the main platforms, because globally were more widely recognized as a broker. So that’s what most people know us for overseas, but in the US for crypto only right now. So we’re able to take advantage of that relationship with those publishers. Outside of that, you know, it’s it’s the typical stuff, when you’re marketing to a niche industry like we are. It’s thinking about where are these people most often? So you go to Twitter, okay, well, we can’t necessarily run ads on Twitter. You know, you can post organically as much as you can. But what’s next so what’s next is podcasts, advertising or YouTube advertising. natively within the videos with the publishers. But there’s also the influencer sponsorships. And you’re seeing that get more and more popular now, whether they’re through networks, like what block works group is doing or whether the brand reaches out individually to individual influencers, which is my preference and what we do. So that’s one of the easiest and arguably most affordable ways to get wider reach within your niche.

Rob McNealy – RobMcNealy.com
So say, a community project. Now how what would you say is the best thing for a community project that may not have that Ico backing that big bankroll that we had with a lot of these products? You know, two, three years ago? It was interesting. I mean, you saw people throw money, like really big amounts of money at ridiculousness. As far as marketing goes, I saw and it seems like ROI to me has always been an important thing. I was just you know, curious. What would you recommend? For like, you know, these community projects that don’t have that, how would you deal with those kind of projects instead of something that was really had a big bankroll? And, you know, maybe VC funding, for example? Sure.

Brad Michelson – eToro
Well, I think that you got to think about it in some degree, similar to a brand selling a product. So who is where is your product for sale? Okay, so we’re thinking about crypto exchanges, right? So, you might want to spend a lot of your time getting more familiar with the marketing and PR teams of those exchanges so that you have better like co branding opportunities and relationships with those people. You can have them add your brand and your token into more marketing materials and therefore, expose the token brand to more people that way. And, you know, marketing is really just a game of eyeballs at the end of the day, whether it’s consciously or subconsciously The more people see things, the more they’re aware of a brand, the more opportunity there is for them to purchase or participate within the brand. So that’s probably a place that I would start with first because, you know, when people see people shilling, like non top 10 assets now, people just assume it’s some sort of, whether it’s a bot network or whatever else it is. I see this in my replies all the time. But if you can integrate organically with a provider of your services, it makes it a lot easier for you.

Rob McNealy – RobMcNealy.com
So one of the things that I’ve seen and it was interesting, as someone whose US based your US based is that crypto is like a global thing from day one. You know, and so the exchanges are global, the projects are global. The, the basis for many of these projects are global in nature. How do deal with that as a project, like for instance, marketing. You know, a lot of times, you know, US base industry might be just mostly focused on that, you know, the the US, for instance. But how do you deal with the global niss and the messaging globally for any kind of crypto project?

Brad Michelson – eToro
This is a challenge that I think most crypto companies discovered really early on and when you look at when we keep going in 2017 2018, but it really was a craze, you know, people are not for people that are relatively new in this space. It’s not that people are playing up what it was like during the the boom, it was as exaggerated as it sounds when people talk about it. So there are all these projects that you know, started out us base or started out UK base and then suddenly they had to hire like a community team in multiple regions of Asia because suddenly that catches on and one of their exchanges over there. And then all of a sudden, maybe a market dries up. And they have to ditch those and only really focus on two regions. I recently had a call with someone who’s a part of a fairly large defy project. And they were saying that over the last year, they’ve cut teams in certain regions of the world. And they’re really just focusing in the US and a couple other places right now, because that’s where their customers are at the moment. And really, that’s what it comes down to. It’s where the majority of your users in the case of a token project, where’s the majority of your volume? And what can you do with those people to increase the brand awareness or your volume if that’s what your KPI Your goal is there?

Rob McNealy – RobMcNealy.com
Yeah, it’s been interesting as a project right, and you know, I’m not here to shill #TUSC all day, you know, I love #TUSC but it’s interesting because it’s really we’re US based, ee’re not an IC O, so we’re not a legal security. So we’re one of probably a couple dozen projects that eventually be able to legally be traded on us exchanges. The problem is it’s really hard to get on a US exchange. So most of the exchanges we’re on at least right now are in Asia. I mean, there’s just seems like we’re the most of them are right now. But it’s interesting having to go through and negotiate with all these different in that and it’s different by which country in Asia to their the way they interact, the way they negotiate, or in some cases don’t negotiate. And it’s an interesting kind of trying to navigate that, like, I mean, I got a background in business. I got an MBA for whatever that’s worth these days, but, you know, but it’s like International Business one on one day one. Yep. And it’s like, I got to go read a book on you know, negotiating in Asia and because I just never had to do that before. So it’s been pretty fascinating. And it’s actually been really fun too, though, because I’ve met some amazing people. Around the world through my project. And so I think that’s what I really like about doing this. But it’s also sometimes really frustrating is, you know, not understanding some of the, you know, just the more cultural nuances just because there’s so many you have to be worried about something. And you know, it’s interesting, because in a typical American, right, you just kind of think all Asians are the same. Well, they’re not they’re very, very culturally very different from one another. And so, only time ago I did I used to work for a Japanese country company. And back when I was a corporate Guy 20 years ago, and you know, I get how the Japanese work because I work for a Japanese company I worked for an ally Japanese were but they think and act and do business very differently than say people in China do. It’s just totally night and day and, And to me, that’s been very fascinating. But is for you guys even like with etoro? Are you essentially then hiring different marketing people or ground teams in each country that you think you’re going to have a big presence in?

Brad Michelson – eToro
So basically, the way it works with us is that we have regional offices. So, for example, I work in the US office, I run the US marketing team. But there’s a completely different marketing team in the UK, for we have one region that’s most of Europe that there’s one team working on. There is a team in China that only works on China, etc. So we’re a little bit luckier because we’re at the scale now where we can have all these regional teams. But it’s not that easy for everyone else. So it’s kind of a little bit about prioritization based on business goals.

Rob McNealy – RobMcNealy.com
So do you guys all coordinate though, all the different marketing teams around the world to so you still have a similar message or really staying on the consistent? You know, focus when you’re doing the marketing, or is it is it then just regionalised? Like, is there one central brand messaging and then it’s just, you know, regionalised in a certain way, that makes more sense for those places?

Brad Michelson – eToro
Yes, kinda. So basically, there’s like a central brand to etoro That’s managed globally, or at HQ, we just call it globally. There’s like a brand book basically with the way we like to talk about things, the colors, we use the gradient styles that we do in our graphics and things like that. But every region is a little bit different, right? So the coffee is going to differ. You know, the way that the UK talks about crypto would be different than we do. There are things that we’re allowed to do that they’re not allowed to do, for example, we like to throw incentives to customers to have them come in, but in the UK, they’re not allowed to do that legally. So there’s a lot of differences and they really leave it up to us to make it our own, which is a really fun part of the job.

Rob McNealy – RobMcNealy.com
Well, and your experience, at least, you know, coming from the more traditional side of marketing to the crypto, what would you see what are some of the the horror stories that you’ve seen out there in the marketing of crypto?

Brad Michelson – eToro
Yeah, I think a lot of it goes back back to how there was a lot of like amateurism at the beginning and it wasn’t like, purposeful negligence or anything like that. It was that most of the people, most of the personalities were just people, right? They, they had never taken a sponsorship before, they had never done any of these things. So sometimes you’d like sign a deal with someone for six months. And then two weeks later, they’re like, sorry, I decided I don’t want to do this with you anymore. I signed with your competition. So stuff like that is really annoying, but it happens from time to time. And, you know, you’re not going to burn a bridge. So it’s whatever it is. Other times it’s, you know, you if you think back, you can probably think of at least a couple companies that partnered with a project that ended up being a scam of some sort, right, like whether it’s listing a token or whatever it is. So I think that a lot of the differences between then and now is just maturity and growing into like a respectable industry.

Rob McNealy – RobMcNealy.com
So what would you say your best advice would be to new companies say, VC backed project, what would be the best piece of advice you could give them in the beginning?

Brad Michelson – eToro
Invest in your brand and your brand’s voice. So that applies to social media, the way you talk about things, the way you present the values of the company. Because at the end of the day, the way that our community works is that if you don’t follow the simple rules of, of the the basic tenants of centralized currencies and whatever way you want to interpret those things, digital currencies, you’re really never going to take off, right? Because you’re not going to be able to capture the attention of the influencers, who might share your content and bring more attention to your brand. It’s a lot more of an uphill battle. You don’t need necessarily to invest in a paid media. A team or a paid media agency, which is kind of backwards to a lot of people’s experiences. So having a strong brand team, which includes a strong UX asset on board, and then making a product that’s easy to use, I think we’re finally approaching the days of no longer having to deal with apps or daps, or platforms that you need to read like a manual for because the first time there were a lot of exchanges where you kind of had to read steps on a forum or whatever to complete a purchase or a trade. And thankfully, those days are now appeared to be behind us.

Rob McNealy – RobMcNealy.com
Thank goodness.

Brad Michelson – eToro
Yeah, right.

Rob McNealy – RobMcNealy.com
So Brad, where can people find out about more about you?

Brad Michelson – eToro
You can find me on Twitter @BradMichelson.

Rob McNealy – RobMcNealy.com
Well, I appreciate you coming on the show today. And anytime you got something interesting, you want to talk about, you’re more than welcome to come back. Sounds great. appreciate you having me. Thank you. I am Rob McNealy, this is the Rob McNealy program. Check us out on the web at Rob McNealy calm and we will catch you next time.

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Brad Michelson – Crypto Marketing & eToro Video