Ten Questions: Exclusive with Blake Richman VP Finance of Vertalo
Exclusive with the Vice president Finance of Vertalo
Now E-Crypto News reached out to Blake Richman who is the Vice president of Vertalo which is a complete management system for any asset portfolio that traditional investors and non-traditional alike can sign up for and connect to real-world tokenized assets. Here is what he had to say.
What is your greatest nightmare scenario when it comes to the crypto space?
Dismissive and burdensome over-regulation that halts development of the technology. At Vertalo, we’ve witnessed several other countries outright ban digital currencies, and we may see the same approach taken to digital assets in similar jurisdictions. In the US, our regulators have been much more measured and disciplined in administering guidance and enforcement actions. They’ve taken their time to fully understand this stuff, opting for the scalpel rather than the hatchet, and they’ve only acted in ways that protect consumers and investors, which deserves a lot of appreciation and respect.
How can that scenario be averted?
Founders, entrepreneurs, and investors have a lot of responsibility as well – actively interfacing with and educating regulators, building legitimate technologies, and understanding the impact is critical at this stage. 2017 was demonstrative of new types of capital market activity, a demand for such, and the innovation required to satisfy that demand. However, it also revealed the greed and recklessness that all too often harms the consumer and investor. We’re very fortunate in the US to have very clear laws around traditional securities and commodities, and it’s very possible to innovate within those boundaries.
What is the singular most unique contribution that Vertalo is making to the crypto space?
Enablement and connections. At Vertalo, we’ve seen too many rent seeking and gatekeeping business models that put the technology on a pedestal, making it prohibitively costly, and sacrificing usability features for the less tech-savvy users. Vertalo seeks to make this technology accessible to everyone, serving as the connective fiber for this ecosystem. We are all working towards the same goal in this industry, and at Vertalo, we find that it’s easier to work together to that extent. This ethos is evident in our platform, business model, and company culture.
Will there ever be a world that offers strictly digital assets?
At Vertalo, we believe that it is certainly possible – in the historical context of dematerialized record keeping, we’ve moved from paper to electronic, quite rapidly…in under a century. Using digital assets for recording ownership of a parcel of land in an undeveloped country is not only valuable for those with access to the registry, but it can also improve enforcement of property rights, which is a fundamental economic catalyst for heightening individual productivity, which drives state-level economic development and the associated benefits: higher rates of education, particularly among women, lower child mortality rates, access to water and energy infrastructure, access to healthcare, etc. There are plenty of residual systemic inefficiencies to address in developed countries as well, most of which can drive significant downstream effects. As we continue to apply the technology, experimenting successfully or otherwise, we gain additional insights that provide the basis for further study of impact. Vertalo is early in this game, but as the broader field develops, the case for a strictly digital asset world becomes more and more clear.
What kind of solutions are we seeing that may change the world in the next decade for digital assets management?
There are several key gaps in the ecosystem. The largest, which I believe we’ve built an elegant solution for, is the pairing of identity to blockchain address. Ensuring investor eligibility and suitability at the time of trade involves jurisdictional regulation, securities law, and token-level embedding of regulations. This is further complicated by regulations for Broker Dealers requiring them to determine investor suitability for each individual offering, which essentially precludes the standardization of identity/eligibility. Vertalo has discovered a way to solve this, putting that control in the hands of the issuer, as well as individual broker dealers. That was an exciting problem for us to solve. Another commonality shared by a number of existing problems is the usability of the technology. As an industry, we are currently asking too much of the common user, and it’s vitally important to the adoption of the technology and the proliferation of its benefits to provide a familiar and intuitive user experience. At Vertalo, we’ve spent a lot of time solving that problem as well.
Are we seeing a shift from digital assets holdings by individuals with individual security options to a decentralized one where the blockchain is key to storage and retrieval of security details?
It’s a blend of both. It’s very important to remember that securities are not bearer instruments like Bitcoin. The funny thing is if you want to steal a security, you need to tell the issuer. We’re certainly seeing a shift in how people think about self-sovereignty and direct ownership, but varying technical proficiency isn’t something we expect to ever fade away completely. As such, at Vertalo, we’ve architected solutions for less blockchain savvy users to use keyless custodial wallets, as well as sophisticated users to leverage their own wallets and storage/security solutions.
What way is next for brokers and all the middlemen in the digital asset management ecosystem
I’m still in the camp that there will always be a role for broker dealers, custodians, exchanges, and transfer agents, etc, but this technology provides access to new lines of business and heightened efficiency driven from existing ones. Finance and the surrounding capital ecosystem is really simple, but it’s also very big, and very clunky in its execution. Many of these service providers, while they may touch a piece of securities transactions, tend to serve as more of a smoothing factor than a useless intermediary. This helps things look like they work the way they should, rather than the way they actually do. There’s been a lot of attention paid to this recently (ie Cede & co, Charles Schwab and fractional share ownership, DTCC, etc), partially driven by the rise of direct ownership under most digital currency and asset models. What way is next? Heightened value driven from the use of the technology and emergent business models enabled by it.
How can we make sure that digital assets can be bought by just about anybody?
Financial literacy and inclusion are so critical to economic productivity at the individual level and economic development at the state level. That said, we are not in a mature state on the individual level. Risks to the average investor and consumer, particularly when you look at private markets and the key feature of information asymmetry, are very present and very real. I don’t think accreditation standards are quite where they need to be, but it’s incredibly important to systemic stability to protect the average consumer and investor. There’s been a lot of talk over the past 12-24 months about readjusting these standards, which I applaud. It’s also important to remember that private markets are just that….a market. There are buyers and sellers, and for sellers, you’re also incentivized to find the right buyers that provide value beyond the dollar. This creates a bit of buyer competition for top quality investments. I don’t see that model changing too significantly.
Will digital assets change the way we do everything?
You’re still going to need to pack your own lunch pail and put your pants on one leg at a time. Perhaps your smart-fridge will eventually recognize you’re running low on bacon and will execute a smart contract to pay a grocery delivery service, which is one example of a small transaction that could be automated. I’m still a believer that we maintain our humanity – messy, strange, and clumsy from time to time – but we can drive additional efficiencies with the way we live, opening new opportunities.
If you have three wishes concerning the crypto space and a genie who could grant them what will your wishes be?
I’d wish some parts of this industry would stop with the BS, the hype, and the signaling – just develop and deploy sound scalable software
I’d wish financial education was included in more curriculum around the world
I’d wish people were nicer to each other on crypto twitter – we run an E.L.E. policy at Vertalo – everybody love everybody. It’s hard enough to change the world, harder from any other position.