KKR & Co. LP (NYSE:KKR), Bitcoin – US Dollar (CRYPTO:$BTC) – CrossTower Tackles NFTs, Lending and Institutional Asset Management in Crypto
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Today’s conversation is with Priya SouhagHead of Strategy at CrossTower, a Web3 and financial ecosystem. The following text has been edited for clarity and brevity.
Benzinga: Hi Priya, nice to talk to you. Tell me a little more about yourself.
Priya Souhag: I started in private equity with KKR & Cie Inc. (NYSE: KKR) then I worked for Ernst and Young, where I was a management consultant.
I focused on very traditional asset managers, as well as strategy and distribution of off-the-shelf products to high net worth clients.
Tell me about your foray into crypto.
In 2017, EY launched a crypto campaign, which has become one of its most successful ventures.
Some of my clients include Coinbase Global Inc. (NASDAQ: COIN), Gemini, Genesis, Kraken, eToro and Cboe Global Markets Inc.– property (BATS: CBOE) ErisX.
Working with them, I’ve seen a lot of different types of projects from a risk and regulatory perspective.
Eventually I was approached by a small company – Capco – and they basically wanted me to run their practice. It had about 10,000 people and was once owned by Fidelity National Information Services Inc. (NYSE: FIS).
There, I led a team of 23 people which later grew to 40. I was the only girl in the team. And we did all the digital assets. So tokenization, as well as bond issuance on distributed ledger technologies (DLT), for example.
So, in recent years, there has been more interest in crypto from high net worth individuals and institutions. Can you tell us a bit more?
At Capco, I was trying to help CrossTower determine its target operating model for lending.
CrossTower said I was expensive, and so eventually they brought me in-house, where I became the chief strategy officer.
We have four pillars of business – exchange, lending, asset management and NFT – with our exchanges focused on institutions in the US and retail in India.
We acquired half a million customers after going live in September.
Tell me some of the things you focus on at CrossTower? Loans and asset management. What is all this about?
After China expelled the miners, there was a vacuum. So we’re prosecuting minors in places like Texas, Wyoming, New York, and Pennsylvania. We basically provide them with asset-backed loans.
For the asset management industry, we have algorithmic trading models and artificial intelligence and machine learning.
We have delta-neutral and momentum trading strategies that provide our clients with exposure to Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), Solana (CRYPTO: SOL) and DeFI.
We leveraged a proprietary Algo trading model designed by our portfolio managers so that we could capture upside and downside momentum and hedge that exposure.
What is your most important activity at CrossTower?
Loans and asset management. They are fine.
However, we see the biggest opportunity in India, among retail, with NFTs. We are a market that is in a unique position because we don’t give everyone access to mints and we just drop their products. We’re selective in what we list, so we’re actually one of the few people, maybe the only ones, who take anything from ideation to actualization.
It’s a white glove service, and we offer a consulting branch that takes everything you have and turns it into entire NFT projects that have an entire metaverse and token economy component.
We work in partnership with several blockchains and also build a whole community of developers.
What excites you the most?
Metaverse and the huge lending component that exists with the artifact collateral. For example, many art dealers like Christie’s and Sotheby’s want to guarantee the digital form of a Picasso, and they want to be able to take out loans in return.
NFTs are a gateway to these metaverses, and that remains unfazed by us. We achieved approximately $16 billion in sales in 2022, and our compound annual growth rate is, for Web3, 40.3%.
What do you think of this market decline?
When it comes to exchanges, you will see consolidation as many are not built to last. They are not designed to stand the test of time from a regulatory process and oversight perspective.
There will be some who will survive. Those who survive will prosper.
In terms of VC, silver has also slowed. In crypto, you need that money to build.
Who’s on your team?
One of our co-founders actually created what is BATS Global Markets and is a formerNasdaq Inc. (NASDAQ: NDAQ) man. The other is an ex-CFTC and Guggenheim. So we have the expertise in-house.
A last remark before closing?
How people consume and why they consume is different.
Celebrity-based NFTs are highly sought after in India. This is not the case in the United States, where people want to support artists locally.
A huge game we’re starting to see is NFTs and MFTs (music fungible tokens) securitized to artists’ intellectual property as well.
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