CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Brett Harrison, former FTX U.S. president and CEO of Architect, explains the new company’s focus on investment tools for digital assets and traditional markets.

Chapters:
00:00 - CNBC Crypto World, Sept 25, 2023
0:27 - Bitcoin falls
0:45 - The headlines
2:03 - Brett Harrison of Architect

For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi 

» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC

Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.

Connect with CNBC News Online
Get the latest news: http://www.cnbc.com/
Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC
Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC
Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC

https://www.cnbc.com/select/best-credit-cards/ 

#CNBC
#CNBCTV  

MicroStrategy buys $147.3M in bitcoin, bringing total held to $4.68B: CNBC Crypto World

Today, MicroStrategy scoops up more than $147 million in Bitcoin in August.

Hackers steal $200 million from a Hong Kong crypto exchange.

And former FTX US president Brett Harrison explains Architect, his new digital assets-focused company.

Cryptocurrency is in the red to kick off the week by noon.

Eastern Bitcoin traded around 26200 dollars and Ether traded below 15 90.

Aptos the token for Web 3 focus blockchain launched by Aptos Lab, was a bright spot this morning, rising more than 4 percent.

OK, let's talk about some of the top stories.

First MicroStrategy keeping to its promise of buying more and more Bitcoin.

Michael Saylor the company's founder and chairman announced on X that the software company bought more than 5400 Bitcoin in August.

He said that at average prices that comes out to more than $147 million.

The company has amassed more than 158,000 Bitcoin worth a little less than $4.7 billion since it started buying Bitcoin back in 2020.

Next up, Mixin, a Hong Kong-based decentralized network just lost hundreds of billions of dollars in a hack.

According to a post from the exchange on X hackers attacked a cloud service provider for the network early Saturday morning.

Mixin said initial verification showed about 200 million dollars were involved in that hack.

The network has now stopped deposits and withdrawals which Mixon says will reopen once a fix is confirmed.

For our main story today Brett Harrison the former president of FTSE US has a new company aimed at bringing more efficient infrastructure to both digital assets and traditional markets.

I caught up with Brett to learn more about his vision for that company and bringing these 2 worlds together.

Plus his thoughts on the FTSE bankruptcy.

So Brett most people know you from your time at FTX.

But you have a new venture called Architect.

Give us sort of a primer on what this company is and what you're building here.

So we are a financial technology company building infrastructure for trading across digital asset markets and regulated derivatives markets.

In addition we just recently received approval from the National Futures Association for our CFTC introducing broker license for regulated derivatives under the CFTC.

So we're a combined technology provider as well as a derivatives brokerage.

Explain that strategy of kind of crossing over to traditional equities and derivatives as well as crypto.

So the primary place where institutions enter any new asset class is through derivatives for various reasons including capital efficiency, the ability to go long and short.

And that's not just true in the digital asset markets.

It's true in the equity markets to fixed income markets.

Much of the institutional liquidity occurs on the derivatives markets futures and options.

And so what we want to do is not just bring the ability for people to trade in efficient ways and digital asset markets.

We want to bring a lot of that technology to their traditional asset markets as well.

You know in our view over the long term the line between what is a digital asset and what is a traditional asset will blur.

And it's important for technology to be able to support both in a unified way.

What are institutions doing right now in crypto.

I wonder if you could give us an overview of the appetite for digital assets.

It seems like that's slowed down and trading volume has stalled a bit at least on the retail side.

What are you seeing from your vantage point.

Obviously starting earlier this year you know volumes really came down in the digital asset markets.

And but more than that we're starting to see volumes from institutions shift to different market centers.

There's a lot of new players now that are entering the space both from the trading side and from the exchange side.

I mean you have exchanges like CBO who now they have their CBO digital exchange not just for spot but they also recently received approval for margins futures on Bitcoin and ether.

And that just sort of shows how in this kind of shake up given everything that's happened.

There are many traditional players now that are entering the space and looking to try to create structures that feel more like the regulated structures that we see in the equities and future space.

And that combined with kind of the growing kind of appetite for getting back into the space as you know things tied down from everything that's happened the last year.

I think we're going to see those volumes pick up in a big way over the next 6 months.

So our institutions moving into options and derivatives because there's not as much available on the spot side.

I just wonder what that's about or is it just they're looking for more alpha there.

So in the US, the primary place where institutions are getting exposure to the underlying asset is through the CFTC regulated futures and options markets, because those are the places that feel, from a technology and from a regulatory perspective, very much like the other assets they're used to Trading.

They don't have to worry about Taking custody of the underlying asset.

At the same time there are people who can trade in the Underlying assets on a market like coinbase or kraken and They might want to hedge their exposure using something like futures, or they might be engaging in some kind of arbitrage or basis trading strategy where they might go long future, short spot, or vice versa.

And so there's a number of different reasons why people are primarily transacting into the derivatives.

And obviously when we've seen recently the fervor over a spot Bitcoin ETF, there is much interest from institutions in finding different, whether it's in the equity derivatives or the futures derivative side, to be able to engage in the market of digital assets.

What would the impact of a spot Bitcoin ETF approval be at least on the institutional side.

I think first it would significantly increase the exposure that institutions would be able to get and would want to get to the underlying digital asset markets.

I mean as we know the primary place that people get access to for example the S&P 500 liquidity would be through something like spy as an ETF.

I mean people are not picking individual stocks as much these days.

And the same thing would be true for an ETF on something like Bitcoin.

I think that in addition, it would probably increase volumes as a whole across the spot digital asset markets as well.

I mean, think about the authorized participants in the ETF markets who would be creating and redeeming this ETF to match the institutional demands and the retail demands.

And as a result of that activity they would end up kind of buying and selling the underlying spot asset to be able to create those and facilitate those creations and redemption.

So I think as a whole it would probably do a lot to kind of bring interest in volume back to the digital asset markets.

It also seemed to help Bitcoin prices and it has sort of stalled out as the Fed appears to be holding rates higher for longer.

And the macro picture really has been affecting crypto prices.

It seems like more than some of these idiosyncratic news stories.

What's driving prices and what crypto needs to see to see any sort of sustainable recovery.

So yeah we saw a bump in prices after it looks like for example Grayscale won their their lawsuit and also the kind of mixed results on that Ripple lawsuit at least showed that there was appetite to consider digital assets like Spot XRP as not an investment contract in certain circumstances.

I think people need to see more regulatory clarity, more kind of courage from Congress to be able to push through actual legislation, either to enable regulated stablecoin issuers or to actually put in place a broad framework for how digital assets are going to be regulated under some combination of the SEC and CFTC to really see that next bull market in the US.

However, still outside the US, the sentiment is much more positive in places like EU Hong Kong UK where there is significant appetite for creating regulatory regimes that clearly spell out how actors in the market can either be brokers or traders or facilitators of digital asset trading in general.

And I think that kind of combination of the global positive sentiments will eventually bring this market back.

What was your experience working with regulators and trying to get the approval that you announced this week.

So for us you know we had a very what we thought was a productive time working with our person at the National Futures Association on this particular application.

I think that in this market, the important thing is to walk through the front door, to work with regulators, to have those conversations, to be able to actually bring regulated businesses to the US.

I think long gone are the days of trying to engage in businesses in the trading and markets world while looking for either no action or trying to kind of get around the rules.

Ultimately in order for something like a new asset class like digital assets to thrive there will need to be actors in the space that are that have significant kind of financial and regulatory experience that are working directly with regulators and either the SEC the CFTC or other government agencies to be able to kind of bring clear kind of protected activities to either retail or institutional participants.

And that's what we're trying to do as well.

Our regulators more skittish in the wake of what happened to FTSE.

I wonder if that came up in any of your conversations.

I mean I think for people trying to do new digital asset activities.

I think the kind of the appetite for creating other new market structures or letting people list new kinds of assets, definitely waned in the wake of the FTX Celsius collapses and everything else that's been happening over the last year.

What we're doing obviously is we're starting not in a digital asset space from the regulated activity side, but we're working with the kind of vanilla regulated futures and options on things like commodities, stock indices, currencies, and these kinds of activities are just this very clearly defined path for how 1 gets licensed to be able to offer those sorts of market instruments to participants.

Really interesting that you're you're doing both that you're sort of going at the traditional equities future side as well as crypto.

It's almost been a year since that really started to unravel.

Sam Beckman Freed your former boss heading to trial in a couple of weeks here.

What's your feeling on the FTX bankruptcy.

You know with the trial coming up you know it's It's sad and it's disappointing on a personal level.

I mean, thinking about all, not just the hard work that we try to do on the FTX US side, all the colleagues, all the customers that were affected, but mostly the fact that even though a year later this is still going on, this trial is still going to happen and that Sam hasn't yet been able to take responsibility and to receive accountability for his actions up to this point.

And the fact that it's sort of dragged on this long to the very bitter end with this trial I think is not as a result.

We haven't really been able to get closure in the industry So I think all of us, you know watching what's going to happen unfold over the next, you know 4 to 6 weeks are looking forward to some closure on this whole ordeal

You recruited some at former FTX colleagues.

Is that right to to build and work at Architect?

There's a 5 different employees that used to work with me at FTX US that are now working with us at Architects.

Well we're excited to hear more about it going forward.

We'll be back again tomorrow with a lot more.


Speaker 0: Today, MicroStrategy scoops up more than $147 million in Bitcoin in August. Hackers steal $200 million from a Hong Kong crypto exchange. And former FTX US president Brett Harrison explains Architect, his new digital assets-focused company. Welcome to CNBC's crypto world. I'm Kate Rooney.

Cryptocurrency is in the red to kick off the week by noon. Eastern Bitcoin traded around 26200 dollars and Ether traded below 15 90. Aptos the token for Web 3 focus blockchain launched by Aptos Lab, was a bright spot this morning, rising more than 4 percent. OK, let's talk about some of the top stories. First MicroStrategy keeping to its promise of buying more and more Bitcoin.

Michael Saylor the company's founder and chairman announced on X that the software company bought more than 5400 Bitcoin in August. He said that at average prices that comes out to more than $147 million. The company has amassed more than 158,000 Bitcoin worth a little less than $4.7 billion since it started buying Bitcoin back in 2020. Next up, Mixin, a Hong Kong-based decentralized network just lost hundreds of billions of dollars in a hack. According to a post from the exchange on X hackers attacked a cloud service provider for the network early Saturday morning.

Mixin said initial verification showed about 200 million dollars were involved in that hack. The network has now stopped deposits and withdrawals which Mixon says will reopen once a fix is confirmed. All right. For our main story today Brett Harrison the former president of FTSE US has a new company aimed at bringing more efficient infrastructure to both digital assets and traditional markets. I caught up with Brett to learn more about his vision for that company and bringing these 2 worlds together.

Plus his thoughts on the FTSE bankruptcy. So Brett most people know you from your time at FTX. We'll talk a little bit about that. But you have a new venture called Architect. Give us sort of a primer on what this company is and what you're building here.

Speaker 1: So we are a financial technology company building infrastructure for trading across digital asset markets and regulated derivatives markets. In addition we just recently received approval from the National Futures Association for our CFTC introducing broker license for regulated derivatives under the CFTC. So we're a combined technology provider as well as a derivatives brokerage.

Speaker 0: So you're registered now with the CFTC. Is that correct.

Speaker 1: That's correct.

Speaker 0: Yes. And not just crypto. So you're you're doing both. Explain that strategy of kind of crossing over to traditional equities and derivatives as well as crypto.

Speaker 1: So the primary place where institutions enter any new asset class is through derivatives for various reasons including capital efficiency, the ability to go long and short. And that's not just true in the digital asset markets. It's true in the equity markets to fixed income markets. Much of the institutional liquidity occurs on the derivatives markets futures and options. And so what we want to do is not just bring the ability for people to trade in efficient ways and digital asset markets.

We want to bring a lot of that technology to their traditional asset markets as well. You know in our view over the long term the line between what is a digital asset and what is a traditional asset will blur. And it's important for technology to be able to support both in a unified way.

Speaker 0: What are institutions doing right now in crypto. I wonder if you could give us an overview of the appetite for digital assets. It seems like that's slowed down and trading volume has stalled a bit at least on the retail side. What are you seeing from your vantage point.

Speaker 1: Obviously starting earlier this year you know volumes really came down in the digital asset markets. And but more than that we're starting to see volumes from institutions shift to different market centers. There's a lot of new players now that are entering the space both from the trading side and from the exchange side. I mean you have exchanges like CBO who now they have their CBO digital exchange not just for spot but they also recently received approval for margins futures on Bitcoin and ether. And that just sort of shows how in this kind of shake up given everything that's happened.

There are many traditional players now that are entering the space and looking to try to create structures that feel more like the regulated structures that we see in the equities and future space. And that combined with kind of the growing kind of appetite for getting back into the space as you know things tied down from everything that's happened the last year. I think we're going to see those volumes pick up in a big way over the next 6 months.

Speaker 0: So our institutions moving into options and derivatives because there's not as much available on the spot side. I just wonder what that's about or is it just they're looking for more alpha there.

Speaker 1: It's a combination of both. So in the US, the primary place where institutions are getting exposure to the underlying asset is through the CFTC regulated futures and options markets, because those are the places that feel, from a technology and from a regulatory perspective, very much like the other assets they're used to Trading. They don't have to worry about Taking custody of the underlying asset. At the same time there are people who can trade in the Underlying assets on a market like coinbase or kraken and They might want to hedge their exposure using something like futures, or they might be engaging in some kind of arbitrage or basis trading strategy where they might go long future, short spot, or vice versa. And so there's a number of different reasons why people are primarily transacting into the derivatives.

And obviously when we've seen recently the fervor over a spot Bitcoin ETF, there is much interest from institutions in finding different, whether it's in the equity derivatives or the futures derivative side, to be able to engage in the market of digital assets.

Speaker 0: What would the impact of a spot Bitcoin ETF approval be at least on the institutional side.

Speaker 1: I think first it would significantly increase the exposure that institutions would be able to get and would want to get to the underlying digital asset markets. I mean as we know the primary place that people get access to for example the S&P 500 liquidity would be through something like spy as an ETF. I mean people are not picking individual stocks as much these days. And the same thing would be true for an ETF on something like Bitcoin. I think that in addition, it would probably increase volumes as a whole across the spot digital asset markets as well.

I mean, think about the authorized participants in the ETF markets who would be creating and redeeming this ETF to match the institutional demands and the retail demands. And as a result of that activity they would end up kind of buying and selling the underlying spot asset to be able to create those and facilitate those creations and redemption. So I think as a whole it would probably do a lot to kind of bring interest in volume back to the digital asset markets.

Speaker 0: It also seemed to help Bitcoin prices and it has sort of stalled out as the Fed appears to be holding rates higher for longer. And the macro picture really has been affecting crypto prices. It seems like more than some of these idiosyncratic news stories. What's your take on where markets are. What's driving prices and what crypto needs to see to see any sort of sustainable recovery.

Speaker 1: So yeah we saw a bump in prices after it looks like for example Grayscale won their their lawsuit and also the kind of mixed results on that Ripple lawsuit at least showed that there was appetite to consider digital assets like Spot XRP as not an investment contract in certain circumstances. I think people need to see more regulatory clarity, more kind of courage from Congress to be able to push through actual legislation, either to enable regulated stablecoin issuers or to actually put in place a broad framework for how digital assets are going to be regulated under some combination of the SEC and CFTC to really see that next bull market in the US. However, still outside the US, the sentiment is much more positive in places like EU Hong Kong UK where there is significant appetite for creating regulatory regimes that clearly spell out how actors in the market can either be brokers or traders or facilitators of digital asset trading in general. And I think that kind of combination of the global positive sentiments will eventually bring this market back.

Speaker 0: What was your experience working with regulators and trying to get the approval that you announced this week.

Speaker 1: So for us you know we had a very what we thought was a productive time working with our person at the National Futures Association on this particular application. I think that in this market, the important thing is to walk through the front door, to work with regulators, to have those conversations, to be able to actually bring regulated businesses to the US. I think long gone are the days of trying to engage in businesses in the trading and markets world while looking for either no action or trying to kind of get around the rules. Ultimately in order for something like a new asset class like digital assets to thrive there will need to be actors in the space that are that have significant kind of financial and regulatory experience that are working directly with regulators and either the SEC the CFTC or other government agencies to be able to kind of bring clear kind of protected activities to either retail or institutional participants. And that's what we're trying to do as well.

Speaker 0: Our regulators more skittish in the wake of what happened to FTSE. I wonder if that came up in any of your conversations.

Speaker 1: It didn't come up in ours. I mean I think for people trying to do new digital asset activities. Absolutely. I think the kind of the appetite for creating other new market structures or letting people list new kinds of assets, definitely waned in the wake of the FTX Celsius collapses and everything else that's been happening over the last year. What we're doing obviously is we're starting not in a digital asset space from the regulated activity side, but we're working with the kind of vanilla regulated futures and options on things like commodities, stock indices, currencies, and these kinds of activities are just this very clearly defined path for how 1 gets licensed to be able to offer those sorts of market instruments to participants.

Speaker 0: Really interesting that you're you're doing both that you're sort of going at the traditional equities future side as well as crypto. I do want to ask you about FTSE. It's almost been a year since that really started to unravel. Sam Beckman Freed your former boss heading to trial in a couple of weeks here. What's your feeling on the FTX bankruptcy.

Almost a year later.

Speaker 1: You know with the trial coming up you know it's It's sad and it's disappointing on a personal level. I mean, thinking about all, not just the hard work that we try to do on the FTX US side, all the colleagues, all the customers that were affected, but mostly the fact that even though a year later this is still going on, this trial is still going to happen and that Sam hasn't yet been able to take responsibility and to receive accountability for his actions up to this point. And the fact that it's sort of dragged on this long to the very bitter end with this trial I think is not as a result. We haven't really been able to get closure in the industry So I think all of us, you know watching what's going to happen unfold over the next, you know 4 to 6 weeks are looking forward to some closure on this whole ordeal

Speaker 0: You recruited some at former FTX colleagues. Is that right to to build and work at Architect?

Speaker 1: Yes. There's a 5 different employees that used to work with me at FTX US that are now working with us at Architects.

Speaker 0: Fascinating. Well we're excited to hear more about it going forward. Brett thank you so much for joining us. And we'll see you soon. Brett Harrison.

Speaker 1: Thank you so much.

Speaker 0: Founder of Architect. OK that's it for Crypto World today. We'll be back again tomorrow with a lot more. We'll see that.

See all CNBC Television transcripts on Youtube

MicroStrategy buys $147.3M in bitcoin, bringing total held to $4.68B: CNBC Crypto World