Forbes: When FTX collapsed back in November, your CEO Mike Novogratz said that Galaxy had about $76 million locked on the platform. Have you been able to recover those funds? And more generally, I'd be interested to know your experience of trading with FTX and how you did due diligence on them.Having been in the industry since 2017-2018, you knew all these people when they were five-six-person shops.
We have an extensive exchange risk committee that we go through, and there is a very thorough exam that questions everything from legal to custody. We did a lot of vetting but you just can't protect against fraud.
Forbes: Has the collapse of FTX and other bankruptcies throughout the year forced you to change your approach to risk management? After an initial vetting, how do you do ongoing risk management?We have a number of ways. We have, at a minimum, an annual vetting. But in reality, any time we hear a rumor or something that we want to learn more about we may cut balance or leverage. Clients who want to deal with us have a credit limit.
Forbes: What's one or two pieces of advice that you would give to retail traders performing due diligence on trading platforms?From a retail perspective, and keep in mind, we are not a retail business, I think that having a couple of venues that you trust and understand so that you can move back and forth is important. Being able to be nimble in this environment—and it's not even the safety as much as it is business disruption.
Forbes: There's a lot of altcoins that are surging well past Bitcoin. I'm curious what you're seeing, because I wonder if we're going to have the same hype cycle happen over again. The activity on these platforms is not commensurate with the gains that we're seeing.There's always that component of things. It's allegorical to the internet bubble, when you saw things that just didn't make sense financially in 2000.