Mike Belshe (BitGO) - On The Brink #375
Mike Belshe (BitGo) on FTX and the impact on crypto market structure
Host: Matt Walsh, Castle Island Ventures
Guest: Mike Belshe, co-founder and CEO of BitGo
Intro
BitGo started in 2013 with the mission of delivering trust in digital assets. Their focus has always been on security. They pioneered the multi-sig technology & today, also provide MPC (Multi-Party Computation) services.
BitGo also provides custody services. Last year, they had $65 billion of assets in custody. Today, that number is down because the asset prices have come down.
As the crypto ecosystem evolves, businesses would want to participate in this as crypto will move-on from being a retail-driven space. With that, there will be need to custody assets with banks & other such institutions, which will require high level of transparency & safety.
BitGo has also been building in the ‘market structure’ area, which has been hard. There need to be checks & balances in place so that a single party like SBF, Madoff, etc. don’t mess things up.
What was going on with FTX & Alameda?
Alameda was a hedge fund & its common for hedge funds to take crazy risks. A completely isolated hedge fund can have contagion on the infrastructure when they blow-up (E.g., Bill Hwang) but the infrastructure is supposed to manage/mitigate that risk & not carry that risk. It was hard to figure that FTX customers’ funds would be used straight for Alameda’s risks. That’s absolutely criminal.