Government Relations: Banking & Bitcoin Legislation

Thank you, George. Appreciate that. I'm Stephen Pollock. I'm excited for this panel today. Thank you all for being the first ones up this morning. We're really excited for the conference this week, and excited to introduce the panel here. We're going to get kicked off. We have a lot to talk about. To my left is John Riggins, CEO of Moon Inc. I have Khing Oei, CEO and founder of Treasury. And I have Garry Krugljakow, head of Bitcoin strategy at Aifinyo AG.

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Thank you, gentlemen, for joining us this morning. We have a lot to talk about. It's really interesting that we have a cross-section of Bitcoin companies from all corners of the globe, from the Netherlands and Germany to Hong Kong. I think we can really dive in and get a cross-section of the regulatory environment, where we are today, where we've come from, and where we're headed in the future.

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Let's start off here. We have Bitcoin companies from all over the globe. Can you give us a quick update on what's been going on in your business, any innovation, anything new you've been working on, and then an update on the regulatory environment that you operate in? Let's start with John, and we'll work down the line.

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Sure. John Riggins, CEO of Moon Inc., listed on the Hong Kong Stock Exchange. You can think of Moon as the Bitcoin treasury company for Greater China. We see a Hong Kong Exchange-listed company as the best way for mainland China eventually to get access to a Bitcoin proxy. We're building a Bitcoin balance sheet and then building a Bitcoin business tied to our existing legacy business of telecom, so SIM cards and data, and we're adding Bitcoin card products into the mix. We're adding Bitcoin on our balance sheet as a treasury asset and also as inventory for our products, and giving first Hong Kong and then China exposure to Bitcoin through that Hong Kong company.

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Good to be here. Khing Oei from Treasury in Amsterdam, the Netherlands. We're preparing a listing on Euronext Amsterdam, which would make it the first Bitcoin treasury company on a main exchange in Europe. We raised capital last year, about $150 million, backed by the Winklevoss twins, Nakamoto, and a couple of other institutional investors. We're preparing our listing in Amsterdam. If you think about the regulatory environment, it is all fairly new for the Netherlands, anything Bitcoin or crypto related, so there is a lot of education that needs to go on as well.

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My name is Garry. We have done the first Bitcoin treasury in Germany, a market that you would think should have had one way back because, for instance, we host a long-standing Bitcoin meetup outside the U.S. But funny enough, no one was crazy enough to go down that path. In terms of regulatory concerns or updates, I think MiCA is doing a good job. One thing for Germany, but also probably the Netherlands and other jurisdictions, would be harmonizing that and maybe finding better ways where it is clear what the pros and cons are of being in Europe versus outside. In general, more capital markets understanding of the treasury models is something I'm personally very passionate about.

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Excellent. Garry, we'll stay there with you. You just touched on this a little bit, but the next question is: how have you seen banking relationships evolve with your corporate Bitcoin accumulation strategy across Europe specifically, and then we'll come down the line to Asia and John? How does openness from banking partners connect to broader adoption?

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The good thing is that Aifinyo has certain banking licenses, including a payment institute license. Talking to the regulator was never really a concern. I always thought this was a big advantage over just going with some shell company. On the other side, even then, talking with investors and shareholders, they still cannot really grasp the idea of Bitcoin sometimes. You really have to start with first principles, which is crazy, especially with financial professionals, people that should know this better. That was extremely surprising.

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On the other hand, being in Europe, Germany is one of the largest capital markets in the world, I think fourth or fifth, and there is way more potential there. If you start offering capital market products that could be high-yielding, for example something like Strategy's STRK, in Europe we have something similar by Strategy. It was only available for institutional investors. I think it would make a lot of sense now to start thinking about how you can place certain private credit, or public fixed-income yielding products, backed by Bitcoin. That is something I think we will see happening very soon.

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Khing, what are you seeing? I know you guys are both in Europe, Germany and the Netherlands. Compare and contrast.

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The thing about treasury companies is you need to deal with all the institutions around you: the regulator, the exchange, banks. You need to bring Bitcoin and basically institutionalize it. I think what we're seeing is that MiCA, as Garry mentioned, has been a very positive element. At least there is a regulatory framework, and all these institutions know that it is there, it is coming, and they need to deal with it.

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We're certainly seeing in the Netherlands a lot more pro-digital assets behavior, especially by the banks. That is certainly developing, driven also by this regulatory environment. To be clear, as a treasury company, you don't actually have customers, so you don't fall under MiCA. Still, the fact that it is there is very positive. From our side, what we're doing is also working on a lobby group to make sure that all these people sit around the table, compare notes, compare risks, issues, and concerns. That is very important because, again, a lot of it is about education.

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Exact same in Hong Kong, right? No differences?

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It's totally different. It's interesting to be sitting at Moon because we have also seeded some of the first and largest treasury companies around Asia, in Korea with Bitplanet and in Thailand with another company. We've seen from the front row the different dynamics of working in other markets outside Hong Kong.

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The main thing about operating in Hong Kong is the Hong Kong Exchange, not necessarily the SFC or other regulators, especially dealing with exchange listing rules when it comes to doing something a little bit innovative, like building a treasury strategy. We're seeing similar things in Korea and Thailand. We sell products into those countries. The main thing you deal with there is capital controls, which is not as much of an issue in Europe, where everything is more meshed together and built together.

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We feel like each of these companies has developed a moat based on being a first mover there. We feel like that's the position we're in with Hong Kong. We can all work together to play to the strengths of each country when it comes to the products we offer and the services we can help each other with. That's the plan for Asia: to have a network of these companies leading treasury business in each market and playing to each other's strengths.

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Fantastic. I guess the next question would be regarding Bitcoin exposure through public equities in your region. Are regulations and legislators making it easier or more difficult for traditional investors to gain exposure? What are you seeing, and how is that changing? Is it getting any easier or more difficult?

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I can kick it off. The interesting thing is that in Europe, most people don't know this, but as a European resident, you cannot buy the IBIT ETF. You cannot buy Bitcoin ETFs. That is already a huge constraint for getting easy Bitcoin exposure in your brokerage account. You can clearly open an account on an exchange, but it's different. That is why a Bitcoin treasury company itself has real product-market fit. It is easy access in your accounts, easy for taxes, and regulated access.

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Away from that, we don't necessarily see a huge amount of encouragement for people to buy the asset. Switching to the institutional side, we're certainly seeing a slow but steady increase in institutional interest in the space. It's very similar there: it is actually not that easy to get access, so an equity is a solution there as well.

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Germany is funny enough in love with fixed-income products because of pension funds and funds, and you have some of the biggest in the world based there. There is already natural interest on the capital markets side of things. Regulatory-wise, funny enough, it is actually not as bad as one would think. Germany has some fairly broad rules about listing requirements. There has been a basically Bitcoin-focused listed company in Germany around for almost ten years. It is an exchange that happened to have a balance sheet of half a billion euros worth of crypto assets, and they are publicly listed. So the regulator already knows this model. It wasn't called a Bitcoin treasury or a DAT, but the model is not new.

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That was the easier part. The hard part is structuring the right financial products, issuing anything but common equity, and raising the threshold for how many shares you can raise in a given amount of time because of corporate governance or corporate law. Those are the trickier things. The regulator does not understand why they should, and maybe they should not have to. They definitely don't really care that much. If on one side we say we are similar to any other publicly listed company, but at the same time ask them to change the rules for us because we have Bitcoin on our balance sheet, that unfortunately is not going to work with them.

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We have to adhere to the old traditional rules, which are fairly good in Germany at least. It's not hard to get listed, especially if you have an operating company and know the process. But understanding corporate law and then making it easier for non-European investors is the tricky part. For example, it is extremely hard for a U.S. investor to buy European shares in general, but that has more to do with the American regulator not wanting people to take their money or take the business somewhere outside the States.

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John, easier or more difficult?

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Generally, it's easy for investors in Asia to access Hong Kong Exchange-listed companies. I think close to 5% of our investors now are on Futu, which is the Robinhood or E-Trade super app in Asia. We've seen investor growth from a lot of different countries. It's nice to be in Metaplanet's neck of the woods also. We hear from a lot of Metaplanet investors saying, let's get some exposure to what is kind of the Metaplanet in Greater China.

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The story for investor access in Hong Kong is the Stock Connect listing, which gives mainland investors exposure to Hong Kong Exchange-listed companies. That's the end game for us: reach the thresholds that allow institutions in China and retail in China to access Moon with RMB. That is the next piece of exposure that hasn't really been tapped into yet. I think that is the biggest demand that still exists untapped, and that's the endgame in Hong Kong.

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We have just less than ten minutes left. This is not meant to be a trick question, but it would be interesting if you could name a piece of legislation or regulatory change in any country that would most help your business in the next 12 months, and please explain why that would be important. John, let's go back to you, then Khing, then Garry.

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For Moon, we're hitting that Stock Connect long-term trajectory, so that would be the biggest thing for us that could happen in 12 months. Then, to Garry's point on listing rules and how you operate with raising funds and issuing equity, some easing up of that for treasury companies around the world, including in Germany and Hong Kong, would be on that list too.

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For me, looking at the European landscape, the first country in Europe to actually buy Bitcoin on its balance sheet through its sovereign wealth fund is Luxembourg. That in itself creates a huge amount of positive momentum around the space. From there, you see the regulator and the different ministries acting in concert. If anything, as always, putting your money where your mouth is is a big positive for us as well in the Netherlands.

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To my point earlier, access to the U.S. capital market for non-U.S.-domiciled companies would be the single biggest driver of growth and access to capital that wants to be invested in those types of businesses and industries. But due to local U.S. regulatory constraints, that is not going to be easy. Also, exchange rules, like if you cannot hold a certain ISIN in a U.S. brokerage account, you have to open local brokerage accounts in Europe. Especially if you're American, that's extremely difficult. That would make a massive difference.

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Gentlemen, you are doing great work. You're really pioneers in the industry and within the countries and regions where you are operating. I know it is very difficult at times. For our last question, as you look at your time and what you've been working on, and all of these things we've been talking about, what's one thing you know now about running your business that you wish someone had leaned over and whispered in your ear before you began? What's something you've learned that you wish you would have known? Khing, if you don't mind, would you kick us off, then Garry, then John to finish?

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Sure. Just going with my own background, I've been in traditional finance for a long time, and I had a few startups. On one hand, you're in a traditional finance business, and you need to work with regulators. Everything is super important. It's got to be pristine. But secondly, you're running a startup. You're starting with a lean team. You have to make decisions quickly. You're going to move very fast.

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With all of that, sometimes those things can conflict a little bit, because the regulator has its own timeline. There might be 20 business days before you get an answer. In the meantime, you're running 100 miles an hour with your team. That conflicting startup and super-institutional dynamic is something I hadn't fully grasped beforehand.

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I guess the level of knowledge about Bitcoin comes as a surprise. There are some people you would never imagine to be Bitcoiners who end up telling you they have been a Bitcoiner for years but never talked about it with anyone. Then at the same time, on a board level, you have the extreme opposite: a board member who thinks this is amazing, but then ends up saying, actually, I thought it was a hype, and because the price went down 15%, 20%, 30%, or 40%, I think it's gone.

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That spectrum of people is still surprising, and you still have to encounter and engage with it on a shareholder level and every other type of level. But it comes naturally. You need to have diamond hands when you're in this business as well, and patience. I think patience will reward a lot of companies that are still going strong.

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I would echo both of you. One thing that surprised me a little bit was how much education we would be doing with the exchange and regulators in Hong Kong, including with some of your previous colleagues at BP and at Hong Kong LegCo, talking about how this development and others have been positive in other markets.

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We came out of the gates a little bit hot, announcing our first Bitcoin purchases and strategy, and had to slow down a little bit. But that also allowed us to develop more of a strategy around our actual business and add Bitcoin products into that traditional business line, which is something regulators wanted to see. We were able to do that successfully and also develop a moat around our business as Greater China's treasury company because of that.

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It turned out to be okay, but the education factor is important. These sorts of conferences help a lot. The Bitcoin conference coming to Hong Kong every year is a benefit. The education piece matters.

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Fantastic, gentlemen. Great being with you this morning. Let's give a hand for these gentlemen.