[Due Diligence] The Cefi Apocalypse - Part 2: The Recipe for Cefi’s Success and Failure | George Aliferis, CAIA

In this new episode about the Cefi Apocalypse, we find out how key players in the industry managed to forget any notions of risk. And how so many investors follow them. To do so, we look at the technological, cultural and macro trends that preceded it. And on the technological side, the starting point has to be Bitcoin and its origin block in January 2009.

In conversation with Hirander Misra, CEO and co-founder of GMEX Group, FinTech Entrepreneur and Blockchain influencer.

🎧 Listen on podcast platforms https://pod.link/the-fintech-files/

This podcast is produced in partnership with Financial Markets Insights by The Realization Group-  bringing together the best minds in the financial and capital markets industry to deliver high-quality thought-leadership content."https://www.therealizationgroup.com/insights/financial-markets-insights/

ABOUT THE GUEST

Hirander Misra is CEO and co-founder of GMEX Group, a London-based company that offers consultancy, technology and operations expertise to exchanges and other markets.

GMEX addresses end-to-end regulatory and contract environment needs for Issuance, Trading, Clearing and Settlement, across exchanges and across all asset classes including Traditional, Digital and Hybrid Assets.

HIGHLIGHTS

▶ How the Cefi collapse resembles the Great Financial Crisis of 2007-2008

▶ How tech, culture and macro converged into a powerful alchemy that made Cefi possible

▶ The role of regulation and standards across Cefi, Defi, Tradfi

TO GO FURTHER

Learn about market-neutral yield strategies on Defi: https://bit.ly/Defi-Invest

GMEX Group https://www.gmex-group.com/

YouTube episodes on Cefi & Defi: https://youtube.com/playlist?list=PLXTR2SfmGn35w-THFsOGE8PaCCkJaNlnA

TIMESTAMPS

00:00 The Billions episode about Bitcoin 

01:32 The origins of crypto and mount Gox 

02:08 A history of operational failure 

03:06 The message in the block - and the repeat of 2007 

05:45 Opacity, complexity 

06:38 Looking for yield 

07:38 Banking backlash 

09:21 Lower barrier to entry and risk practices 

09:49 VC impact 

10:50 Conclusion and next episode

About The Cefi Documentary Series

Cefi or CeDeFi (for Centralized Decentralized Finance) is a new type of financial player that encountered great success from its origin in 2017-18 to its near-collapse in June-July 2022.

Cefi platforms gathered 10s of billions of dollars in assets very rapidly, mainly from private investors, but following the collapse of the Terra chain and the bear market that took hold of crypto in 2022., all platforms ran into trouble. These platforms include Blockfi, Celsius, Voyager, Vauld, Babel.

As we publish this in September 2022, Blockfi had to be rescued but continues to operate normally, but the rest have suspended withdrawals and are at various stages of life support, or bankruptcy process (Celsius).

The collapse of Cefi matters for the future of investing, because it’s the first time that savings are at risk and because Cefi was an unfortunate attempt at bringing together Defi and Tradfi.

In this series we will be exploring Cefi along with various guest experts and the goal is to learn lessons about the future of investing.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit investorama.substack.com