FinanceFeeds Podcast Ep. #13: YouHodler’s Ilya Volkov explains why FTX is not a Lehman Brothers
The 13th episode of the FinanceFeeds Podcast is out, featuring Ilya Volkov, CEO and Co-Founder at YouHodler, the Swiss-regulated crypto-native FinTech company.
YouHodler is an EU and Swiss-based brand founded in 2017, offering a wide range of crypto to fiat services.
The platform supports over 50 popular cryptocurrencies and tokens, with user’s digital assets safely guarded with Ledger Vault’s advanced custody and Fireblocks security options.
“FTX did not hold systemic risk”
Ilya Volkov’s career prior to YouHodler includes leading the European factoring company and the FX brokerage firm Libertex Group.
In addition to his chief executive role at YouHodler, Ilya Volkov is a Board Member and Chair of the West Chapter of Crypto Valley Association, a non-profit that works to develop the blockchain/crypto community-based in Switzerland and beyond.
The interview with FinanceFeeds Podcast host Nikolai Isayev covered a number of topics, including the elephant in the room currently overshadowing everything else in crypto: FTX.
While the collapse of FTX triggered a confidence crisis within the space, the YouHodler CEO does not agree with the claims that FTX is crypto’s Lehman Brothers.
“They did not hold any systemic risk”, he said about the digital asset exchange company led by Sam Bankman-Fried as he pointed to the industry’s growing pains and the cause of the collapse: bad risk management.
“Crypto is not a revolution”
“The crypto industry is getting mature by going through these ups and downs related to crashes of market participants”, Ilya Volkov continued, adding that the ecosystem will grow to learn that crypto itself is not a revolution, but an evolutionary step in the development of the financial industry.
“We should all respect the traditional rules and learn from the past, from the traditional industry […] To me, guys who just failed recently, simply didn’t respect the rules and didn’t pay much attention to the traditional risk management approach. They were betting and maybe at some point leveraging their balance sheet, they were betting with customer funds.”
Ilya Volkov reiterated that despite all the emotions in the last few days, this is not a real crash nor it is a Lehman Brothers. “It’s just a big player who made big mistakes with simple things.”
The YouHodler executive agreed with Kraken CEO Jesse Powell’s tweet that also puts blame on the regulators in the United States.
“US lawmakers & regulators have some accountability too. You drove this business offshore because you refused to provide a workable regime under which these services could be offered in a supervised manner. Enforcement wrongfully focuses on convenient, on-shore good actors.”
Ilya Volkov added that regulatory inefficiency in the US pushed businesses offshore, where they were able to do pretty much anything. In the hopes that regulators learn from the FTX collapse, he suggested they introduce smart and simple rules without “reinventing the wheel”.
He applauded the Swiss approach to crypto regulation and welcomed the European Union’s upcoming MiCA rules, which may bring positives to the space despite being restrictive at some point.
YouHodler operates similarly to cashback
In these jittery times, businesses within the crypto space have been coming forward to put clients’ minds at ease in regard to their exposure to FTX and overall risk-taking. Ilya Volkov took the opportunity to remind listeners that YouHodler always has a conservative risk management approach.
The firm started as a lending business and progressively added more services including a conversion/exchange service, trading and a rewards/staking service, covering all major coins and tokens as well as fiat currencies.
Celsius Network comes to mind when talking about crypto lenders nowadays, but Ilya Volkov explained YouHodler’s business model is different from the bankrupt lending giant.
YouHodler’s crypto lending operation is similar to cashback, he said: “We generate our revenues in-house from our fees and commissions and payback part of this revenue to customers. We always keep the system balance: we earn a certain amount and pay a share of it. We are very conservative with risk management.”
YouHodler expands ahead of Web3 banking solution
The conversation moved on to YouHodler’s geographical expansion, with new offices in Milan, Italy and Paris, France beside the existing ones in Cyprus and Switzerland, and recent regulatory approvals, namely in Italy. The firm is also in the process of regulatory approval in Spain and is in the process of obtaining a DASP license in France.
In the city of Lugano, Italy, Ilya Volkov noticed that consumers struggle with their crypto apps in order to buy, for example, a burger at McDonald’s. Too many steps required he argued, and YouHodler will soon have the solution: a web3 banking platform that combines different instruments, tools, and services.
The web3 solution would connect fiat to crypto on different networks and leverage YouHodler’s position within the space, holding all the pieces from the puzzle: combining non-custodial and custodial wallets into one application with all the networks, and the benefits of DeFi and CeFi.
The banking solution will feature payments, savings, and custody at its core, and will include lending and trading. “Long story short, we have a very bold vision to build web3 banking and, at the same time, we’re humble and conservative”.
The podcast explored the role of the Crypto Valley Association, an organization for industry professionals that is expanding across the globe, having launched in Latin America, and is about to open in the United States and Germany. Ilya Volkov also spoke about living in Switzerland and Elon Musk’s Twitter takeover.
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