Working with traditional bankers and accountants is the best reminder of the value of crypto
When I joined the crypto movement in 2017, I was fascinated above all by its independence from centralized systems. But coming into the operations side of things, as the operational head of a crypto fund, I was never under any illusions that I’d truly get to enjoy such independence in my own work.
My job is to provide a link between the fund and the “rest of the world,” so I actually have to work with traditional financial systems and services more closely and more carefully than I ever did before.
Although I’ve succeeded in finding good companies and good people within traditional finance, it has not been easy. Like many others in the same position inside crypto firms, I’m having to learn this stuff on my own: building bridges, creating new paths and shaping the industry as we go.
There is no guidebook yet. However, in the hope that other business people might feel less lonely in this awkward border zone between two different worlds, I’m going to describe three of the biggest obstacles and how I overcame them.
#1 Lack of even basic crypto awareness
Established and reputable TradFi firms have told me that they’re happy to work with crypto businesses like ours, and they have quoted hundreds of thousands of dollars to do so, only to then admit in the same conversation — and with no shame whatsoever — that they know nothing about crypto. They’ve even asked to hire “cryptocurrency consultants” at our expense.
Needless to say, it’s not fair that clients should have to pay for a service provider to gain knowledge that will soon be taken for granted and sold on to the next ten clients after us.
On the other hand, we have to accept that crypto is still new to a lot of people and we have to be ready to educate without getting annoyed. I’ve had one administrator ask me, after a year on the job already, whether USDT was a stablecoin and whether there could even be more than one stablecoin. Answering such questions directly is much better than paying for unnecessary consultants.
The worst thing would be to be aloof and create some kind of arrogant DeFi vs TradFi mentality.
#2 Dealing with dinosaurs
When you work in crypto, you get used to working with an energetic and global crowd. In a single week we might make investments in India, Canada and Lithuania. It’s not about countries but about people. Of course, that’s one of the beautiful things about working with crypto currencies.
But then you walk into a room of Swiss fiat bankers, as I’ve done many times, and they seem to be invariably old, uniform and stuck to archaic ideas, to the point where everything becomes a bit surreal.
The last Swiss bankers I met wanted to sell me bitcoin. I just had to fill out a paper form, they said, and then wait two days for my order to be completed, or even longer if there was a public holiday by which time the exchange rate would of course no longer match what we agreed.
How to handle such situations? Again, zen-like patience is the only answer. It sometimes helps if I imagine that I’m talking to my father. But more practically, it’s about ensuring that our day-to-day business is conducted purely through crypto, and fiat services are arranged so that they only ever come afterwards, when things need to be settled or audited. There can be no mixing of the two, even though life would be so much more straightforward if they could at least be done in parallel.
(Imagine for instance, if auditors could check our DeFi holdings directly using any of a number of available DeFi portals and the inherent transparency of the blockchain itself, rather than asking us to account for all our DeFi activity in spreadsheets at the end of the year!)
#3 Taking the reward without taking the risk
Here’s where I totally lose my zen spirit and any notion of one day writing an uplifting guidebook. I can deal with anybody in traditional finance, no matter how little they know or how old-fashioned they are, so long as they recognize where they fit into the picture.
If they think that just because they hear the word “crypto” they can charge triple their normal fees in order to capitalize on a bull-run, then we in the crypto fund space need to agree en masse to just walk away. Anything else will create unfair inflation from which we’ll all suffer, not just with financial services but also with lawyers, PR and more. A simple landing page will now be quoted to me at the same price as a fully-fledged web portal.
I’ve made sure to find out the true, up-to-date value of services by asking contacts in non-crypto spheres and then I’ve fought mercilessly to bring outlandish quotes back down to that level. I haven’t always succeeded and sometimes I’ve had to start from scratch with a new provider, but that’s when I calm myself down by reminding myself that it’s okay…
…This is all just temporary
Relax, I tell myself. Things will get easier, especially if we continue to share knowledge and work together. It’s already happening. USDC is now a legal settlement layer for banks, for example, opening up a natural gateway between DeFi and TradFi. The SEC is now led by a blockchain expert, a bitcoiner sits on the Senate banking committee, and the big picture is that the economy is moving towards greater security, transparency and convenience thanks to blockchain. Everything else is just a little bit of short-term hassle.
