Eqonex Limited (EQOS) on Q4 2021 Results - Earnings Call Transcript
Operator: Good day, and thank you for standing by. Welcome to the EQONEX Fiscal Year 2021 Financial Results and Business Updates for the First Quarter of Fiscal Year. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. . I’d now like to hand the conference over to your speaker today, Christian Arnell. Please go ahead.
Christian Arnell: Thank you, operator. Hello, everyone, and thank you for joining us today. The company's annual results were released on June 30, and the business updates for the first quarter were released earlier today. Both are available on the company's IR website, as well as PR Newswire services.
Chi-Won Yoon: Thank you, Christian. Hello, everyone. And thank you for joining us today on our first earnings call as a listed company. We're extremely excited to join the ranks of respected, cutting edge, financial and technology companies listed on the NASDAQ. We completed our listing in October last year, which was a watershed moment for the sector, with EQONEX becoming the first full digital asset ecosystem to be listed on NASDAQ. As a company, we are committed to upholding the highest levels of transparency and corporate governance. Our vision is to bring digital assets to the world. And we are developing a complete ecosystem to deliver on that promise. The statement is much about making these assets more accessible through education and innovative product offerings, as it is about working with regulators to make them available to the world. We have built a platform that global regulators and traditional finance are accustomed to, one that uphold similar standards that you see in world's leading financial exchanges. This means that we will only list digital assets that have had the integrity of their developer network, technology and security fully vetted.
Richard Byworth: Thank you, Chi-Won. The transformation of the digital asset space following the pandemic over the last 18 months has been meteoric. We’re all witnessing a dramatic evolution of the technology’s implementation, the infrastructure institutions’ use and the overall maturity of the space, as regulators start to put proper frameworks together. We've invested heavily in building an ecosystem, which addresses many of the pain points that the industry is currently experiencing. Regulation, reputation, governance, oversight, security, and fairness are the pillars on which we've built this business. This approach has been validated based on the large clampdowns by regulators that we're seeing across the industry. Our ecosystem approach has been designed to facilitate adoption at any level. If an institutional client is comfortable in dealing with the nature of these digital bearer assets, then our Exchange, OTC desk, Access Trading platform and custodian can provide direct access and supporting infrastructure. If the need is synthetic representation or some other derivative, then again our Exchange Access Trading platform and soon to launch Investment Products Business can provide our clients with derivatives, synthetics, listed and structured products.
Paul Ewing: Thanks, Richard. Before getting into the detail, I'd like to start, a few formalities by reminding everyone that our financial results are reported in U.S. dollars, and under IFRS accounting standards. I will also focus the review on the financial performance from continuing operations. However, it should be noted that we did record a $5 million gain during the year on the sale of distributions business which has been classified as a discontinued operations in the financial statements. Year ended March 2021 was an eventful year for EQONEX as we began our life as a listed company, launched revenue generating products such as Exchange and significantly strengthened our balance sheet. All combined, we’ve built a solid foundation, with a financial framework needed to continue driving growth into fiscal year 2022 and beyond. To commence the review, I'd like to provide a brief overview of our revenue model, which will give more context of our financial results and how we generate revenue. Our revenue model can be split into three broad categories: Volume-based revenues, asset-based revenues and advisory-driven revenues. Our volume-based revenue is generated by The Exchange and trading businesses. Exchange operates a tiered commission structure, which is charged against volumes traded. Our trading business is composed of OTC, Access Trading and our risk management desk, all three charge fees on a transactional basis. OTC charges a spread on trades executed, Access Trading charges 2 basis points in the volume executed via the platform and the risk management desk charges a fee to manage the risk of liquidated positions on The Exchange. Asset-based revenues are generated by Digivault and Bletchley Park Asset Management. Digivault charges fees based on the value of assets held under custody, as well as the charges on the platform. Bletchley Park, our asset management business charges fees based on the value of assets held under management on a monthly basis and an annual fee based on the performance of the fund. And finally, advisory-driven revenues relate to our capital markets business. Capital market mandates are generally structured to include a monthly retainer fee and then a success fee based on the percentage of capital raised. That was an overview of the revenue model. I'll now take a look at the actual revenue generated in the fiscal year ended March '21 in more detail. The revenue for the fiscal year was $0.3 million compared to $0.5 million in the prior fiscal year. While our revenues dropped slightly year-over-year, fiscal year '21 was pivotal as it saw us rolling out products, positioning our business for future revenue growth. Revenue during the year was for the most part generated during the final quarter and was the result of increasing revenue generating volumes on The Exchange. Exchange revenue we saw for the fiscal year was $0.2 million. We publicly launched The Exchange in July. And during the initial months, the focus was on onboarding clients and generating volumes. Once we achieve these goals, we offer fee incentives which trigger the flywheel for future volume and revenue growth. As a result, average daily volume from March '21, the final month of the fiscal year improved to $15.9 million, providing us with a springboard into the fiscal year 2022. The balance of revenues in fiscal year '21 which generated in the main by the trading business, and most specifically from OTC. Whilst other business lines did not generate material revenues during the fiscal year, they're well-positioned to do so in fiscal year '22. Specifically the asset management business has seen assets under management increase in the final quarter of the year, where we also began to apply fee from the new investments into the fund, following a zero fee structure offered to the original seed investors. And while custody revenues were minimal during the fiscal year '21, our custody solution provides an extremely valuable service to The Exchange, which again, helps to attract clients. I'll now put some context to the losses from continuing operations. As previously mentioned, the year ended March '21 was an eventful for EQONEX and some of the events which are non-recurring, non-cash accounting entries, but together have some fair value adjustments significantly inflated the loss from continuing operations by $94.2 million to $130.8 million. A key component of this was a non-cash charge associated with the listing on NASDAQ and the increased fair value charged related to the employee share option plan. Taking this into account, and on an adjusted basis, which we believe provides a more meaningful view of the core business performance both past and present, the adjusted EBITDA for the year was a loss of $33.5 million, which compares to a loss of $32.5 million in the prior year. With regards to the ongoing cost base, salaries and associated expenses made up a material component and amounted to $14.9 million during the year, which is a marginal increase compared to that of the prior year. Our headcount as of the end of March was 157. Moving now on to balance sheet, we significantly strengthened our balance sheet throughout the year, which puts us in a robust position to finance growth going forward. A strong balance sheet is a result of a number of initiatives performed during the year. Firstly, we raised funds prior to going public and the completion of the listing itself brought more funds to the Group. Following the listing, we raised gross funds of $38.6 million in January, which was quickly followed by the redemption of warrants that were held by former 8i investors, which added an additional $17 million. As of the end of March '21, we had cash and cash equivalents of $52.1 million, and $2.4 million of other liquid assets, of which $0.6 million was available for working capital purposes. We also had net assets of 61.1 million, which compares favorably to net asset liability positions in the prior year. It's also important to note that we have no interest bearing debt compared to the prior year, where we had $10.7 million of interest bearing debt outstanding. That concludes the summary of the financial performance of the core business during the year ended March 2021. And now I’d like to turn our attention to the first quarter of the new fiscal year and take a look at our revenue performance. As previously mentioned, revenue generation really began to pick up in the final quarter of the year ended March '21 and this continued to accelerate into the first quarter of the fiscal year 2022, with the revenue for the first quarter amounting to $2.5 million, significantly more than the entire full fiscal year of $0.3 million. The revenue and the cost was almost exclusively generated by The Exchange. So breaking this down a little further, on a monthly basis, the revenue rapidly trended up from $0.3 million for the fiscal year '21, $0.6 million in April, $0.8 million in May and $1.1 million in June. The Exchange revenues during the first quarter were $2.4 million, compared to $0.2 million for the entire prior fiscal year. This was the result of a significant increase in trading volumes, which grew month-by-month to an average daily volume in June, reaching 176.9 million, an increase from the 15.9 million we experienced in March. The remaining parts of the business, including the trading business, asset management and custody didn’t contribute materially to revenues. However, we continue to see fee paying investments into the asset management business, which now has assets under management of $21 million heading into the second quarter, compared to $9.6 million at the end of March. Digivault saw assets under custody increase from $11.1 million at the end of March to $54 million at the end of June. Revenues will be further complemented as the year continues with the launch of the Borrowing & Lending Business and Investment Products. It should also be noted that given we have already built the majority of our core business lines and the supporting infrastructure that we expect to benefit from significant fixed operating leverage. What this means is, we anticipate a significant improvement in margins as revenues grow over cost base and will increase at slower rates. After June 30, the Group had cash and cash equivalents and liquid assets of $42.1 million. I'll now pass back to Richard for some closing comments.
Richard Byworth: Thanks, Paul. So, in conclusion, 2021 was a pivotal year for EQONEX and the underlying business. We went from private company to publicly listed. We completely transformed our balance sheet. We're moving in order and putting us in a position to rapidly scale our business. All of our core business lines are now either operational or in the final stages of being rolled out. Volumes, assets and revenues are all increasing as traction with our key targets and institutional clients grows. The high performance team of professionals from crypto, finance, tech and consultancy that we've assembled are excited and energized as the company has transitioned from build to delivery and execution. On top of all of this the regulatory focus that we've always had is starting to pay off with moves by global regulators against many of our incumbent competitors. The fiscal year that began last quarter is set to be yet another transformative year for the company. And we look forward to delivering increasing value to our shareholders. This concludes our prepared remarks. And I'll now hand the call back to the operator to begin the Q&A session.
Operator: . Your first question comes from the line of Owen Lau from Oppenheimer.
Owen Lau: So, Richard, you're on the ground in Hong Kong and I want to get your thoughts about what we have seen and what we have heard about the “crackdown” of crypto mining and crypto transactions in China. Isn't that severe as we've read here in the United States, and how does it impact your operations? Thank you.
Richard Byworth: Thank you, Owen. And yes, indeed, the clampdown from China is indeed as severe as reported. We have many mining contacts onshore in China that have upped their operations and moves offshore, or are currently exploring offshore options to be able to do so. However, we've never been actively involved with onshore China in terms of facilitating business, as we see this as an issue for capital controls. And so in terms of our business, it doesn't actually impact us at all. In fact, with these miners moving to other jurisdictions with which we have contact, it actually means that it can open up business for us in the longer term.
Owen Lau: That's very helpful. And then could you please talk about maybe the retail and institutional adoption of digital assets over the past two months and going into July? When you talk to your clients, have you seen any deceleration, no change or even acceleration in the adoption? Any color would be very helpful. Thank you.
Richard Byworth: Yes, it's a really grand valid question, Owen, given, obviously, the moves that we saw in middle of May. So actually, over the course of the last few months, we've seen institutions moving into the space. Obviously corporate have been triggered by what we saw from Tesla earlier in the year, even though they've now to some degree made a U-turn on that position. We can continue to see larger participation from family offices, starting to see venture capital firms enter into the space, as well as traditional hedge funds starting to carve out strategies because of the very unique alpha that is available in crypto, most hedge funds. Obviously, we've seen a lot of scaling of assets as some of these larger institutional hedge funds are looking at these pockets of alpha and saying that they want a piece of it, and they're starting to try and understand how they can access it. Many of them start with the futures space that we see listed on CME, obviously something that they can access easily, and trade through listed products that basis contango, that is an interesting arbitrage trade. In terms of overall adoption though, through this sell off and the drop in volumes, what's been very interesting is actually this is only just being continuing. We've seen some very large hedge funds announce their interest in getting into the space as well as banks continuing to make moves into the space as well. So actually, while it feels like the prices has pulled back a long way, and obviously volumes are lower, what we are seeing is a lot of positioning, and in fact the pullback to some degree has probably triggered people to say, okay, now we're not -- we're not going to be buying the stock, so we can move into this market and start to get involved.
Owen Lau: Got it. Just the final one for me. There are still many crypto exchanges out there, many of them are private. Could you please remind us your value proposition and how can you attract more volume to Exchange? Thank you.
Richard Byworth : Thanks, Owen. Yes. Again, good question. We have taken a very regulatory focused approach. The Exchange is always -- in our view, we want to make sure that we're positioning it for the longer term future the way that we see this industry panning out. We take best practices from traditional finance, and obviously the traditional exchange, exchange space. Obviously as we know, NASDAQ itself is a regulator of markets and making sure that activity on those markets is fair. And even we try and implement the same sort of standard of an exchange like NASDAQ. So thinking about what is being listed on The Exchange, making sure that we have quality control. So when we look at a project, we're thinking about things like security, making sure that, that development is being put into the protocol, that there's viable utility around the circle if it's more of a utility-based project and also the credibility of the underlying theme. And these are some of the things that we'll look at when listing it, so we have about 12 different things that goes to listing committee. A listing committee is made up of internal experts, but also we have law firms globally participate in that listing committee. And in terms of driving volume to The Exchange, more and more as institutions come into the space, almost directly touch the asset. As I mentioned, many of these are using the CME future or listed products on U.S. exchanges, but actually more of the juice is in the actually underlying futures on these 24 hour exchanges like ours and the spot product directly where you are not paying so many fees as you would necessarily in the listed product. So as those more institutional focused players come and get involved, then we are obviously a very attractive venue for them. But also, when we look at the asset management space and we're allocating through our asset management vehicle to other crypto funds, what we've notice is that as they're obviously trying to scale their assets, they want to move into more reputable exchanges. And so actually they're coming to us and coming in onboarding. Because they've had a number of issues on different exchanges, and this is causing them issues in terms of raising assets. So broadly that very white hat, a fair exchange approach, plus always trying to create a standard around the things that are listed on EQONEX is a very important factor. In the longer term, we want people to look at EQONEX and say, "okay, I'm thinking about investing in this asset, is it listed on EQONEX, if it isn't, then I'm not interested.” And that's the sort of standard that we want to be bringing to the market.
Operator: Thank you. Your next question comes from the line of Kevin Dede from HCW.
Kevin Dede : Gentlemen, thanks very much for taking the questions. Thanks for hosting the call. Richard, you alluded to new customers, I was wondering if you could talk to that and some of the new coins that you've introduced and whether or not you've seen that reflected in Exchange? Granted, it's early days. But I was wondering if maybe there was any read on that. Or maybe you could give us an indication of what to expect, given that most volumes still be driven by Bitcoin?
Richard Byworth: As I mentioned earlier, the sort of the new onboards that we’re seeing are in the institutional space, venture capital companies, high frequency trading firms, traditional hedge funds, and crypto native hedge funds, hedge funds that only look at crypto strategies. But actually one part of the institutional landscape that I didn't mention are prop shops. We're seeing more and more interest from those types of players coming in again, from traditional space, where you look at things like futures and options coming into crypto. And obviously, loving the volatility and loving the alpha that is available in this industry. Talking about new assets being listed on The Exchange, we have actually just in the last two weeks listed three new assets. Matic, which is the asset for the Polygon blockchain, which is a blockchain designed to improve transaction times on the Ethereum blockchain that we just added. That’s very interesting project like the last. We’ve also, just as of yesterday, listed Chainlink and The Graph, two different solutions to the oracle program around blockchain. So it was interesting to launch them in partnership. So, sort of as adults, respectively, so people can take upholding duties on which is the best solution around making oracle programming. So maybe for listeners -- problem. For listeners that aren't aware of the oracle problem, the oracle problem is really trying to take real life events and basically have solutions on a blockchain. How do you connect a blockchain to something happening in the real world? That’s the oracle program. The oracle being the designator to what the outcome of that thing is in the real world. So, I'll stop there and go to any more questions.
Kevin Dede: Right. Okay. Thanks, Rich. Can you talk a little bit about -- I mean, I know your emphasis on development is to be straightforward with exchanges and work with them in promoting transparency and building a framework. Can you talk to some of the progress that you've made, I guess, primarily with the Singaporean regulators? I know, that's the sort of the big lever.
Richard Byworth: Yes, sure. So, the Singaporean regulator, MAS, we've been working with them since actually late 2019. They approved us to operate under an exemption for their Payment Services Act in middle of 2020 with a view that they were going to be granting licenses. I think it was originally planned six to eight months afterwards. They still haven't granted any licenses. And we are equally -- we haven't been granted a license, either if anybody else, so including in that places like DBS, the Singaporean Bank. But it's also worth noting that we've been working with them for some time to think about how derivatives are going to be traded under that licensing. For our global approach, I think an important point is, we were the -- I mentioned in the opening comments that we were the first standalone custodian to be approved under the FCA's new AMLD5 framework. It is a really important framework around money laundering, that's been introduced across all of Europe. The FCA is actually one of the first regulators to implement a registration program for that. And as I mentioned in the comments that they have not actually approved anybody since. So, this is providing us a lot of reverse inquiries people that are looking for regulated custodian to operate outside of the U.S. Elsewhere, we regulated our asset management business in Hong Kong on the Type 4 and 9. We also have -- we've moved that investment management business to Switzerland, where we all operate under FINMAs, self-regulatory organization program called . We have -- for our capital markets business, we operate FCA regulations there for -- as an appointed representative for corporate finance and securities distribution. Our structured product vehicle, our insurance vehicle for the Investment Products Business is licensed in Luxembourg, and our first product will be approved by BaFin shortly we hope, and that will be listed on Xetra. So that's probably a fairly good summary of the overall licenses for the ecosystem.
Kevin Dede: Richard, thank you. Another question on sort of the Investment Product Business, you're -- I think you mentioned the tracker refund. Can you give us a little bit more insight on, I guess, when you expect that to come online? I think you mentioned it, it went by me really quickly. And how you expect to market it?
Richard Byworth: Yes. Sure. So this is a product we're super excited about. We've put the application into BaFin earlier last week. So, we imagine that we will see that product being approved in the coming weeks, which remain that, that will be listed probably in August, maybe September, depending on the timing from that regulator. The marketing and distribution around this is actually a really cool component of the team that's been put in place to launch this. They actually came out of UBS where they did this with UBS's structured products and certificate business. It was very successful. So, we're working with a lot of distributors around Germany in order to really make sure that everybody understands the key differentiators of that product versus what is out there. As you said, I skimmed over it quite quickly in my opening comments, but it's worth noting that, just for Bitcoin alone, there are north of $30 billion of listed ETPs, many of which have very inefficient creation, redemption profiles, many of which have very high fee structures. But most importantly, I don't think any of them guarantees you where your coins are coming from, and that they've been checked from a KYC and AML perspective, which is the guarantee that everyone will have with our product, because as it comes through the EQONEX ecosystem, and goes through chain analysis for checks on those coins.
Kevin Dede: I think, final question for me, Richard. Given the transparency, the regulatory attention that you provide to your customers and their understanding of that compounded by 42 plus million -- well, I imagine that might be a little bit less now given that was June 30th. But regardless, given those two, in combination, how do you see your ability to leverage them in acquiring other exchanges that might not have the ability to address a regulatory framework as well as you have where the capital continue to execute in what might be a consolidating industry?
Richard Byworth: Kevin, can I just ask you to clarify? You are talking about M&A propositions within the exchanges?
Kevin Dede: Yes. Exactly, yes. But given the regulatory position and your cash balance, which I think raises your profile, given some of the other lesser known exchanges. I'm just wondering if you could clarify your intentions there.
Richard Byworth: Yes, there are many, many exchanges across the world. As you rightly mentioned, I think pretty much every exchange in the UK is now effectively not approved by the FDA. So it's going to be very interesting to watch how that plays out. They've obviously got this nine month extension, but there will likely be quite a few exchanges. And actually, there's already been a few exchanges in the UK that have been rejected. We are looking at -- always looking at opportunistically the M&A space. The one thing I'll say is, when we look at these players often, they've brought on clients without any kind of KYC and AML check. It really requires a lot of work to go through that. And in fact, you clean up their client base. So if they're in a situation like many of those that got rejected fully by the FCA are, where they're effectively have to shut down their business, it means that they're likely to lose all the viable clients pretty much immediately. So I think that we're obviously looking at M&A from the perspective of regional opportunity. There's a lot going on in Southeast Asia, where some of these exchanges, they're small, they're not really at the point where they can scale significantly. And so I think that's an area that makes for an interesting M&A point of focus.
Operator: Your next question comes from the line of Hunter Diamond from Diamond Equity.
Hunter Diamond: Congratulations on the quarter and the recent results. So some of my questions are asked. One of the questions I had was just, Richard, maybe you could give an overview of sort of upcoming catalysts. And what you view sort of investors should be monitor in the next couple quarters or years, exchange volume growth, growth in asset management, quarterly results, how you sort of the company could reflect the fair value and what would the catalysts be?
Richard Byworth: Yes, sure, Hunter. Thank you. So I think obviously, the key metric for people to look at is The Exchange and the volumes there. We do obviously anticipate that growth to continue, maybe not in such a sharp trajectory but we do see it continuing as we continue to onboard clients to make up for obviously the declines in volume that we've seen in the industry since that mid-May point. I think, as I mentioned before, that the Investment Product Business is an important one to keep an eye on. We do see that as being a very significant business in our future. So when that first product gets listed, I would say is a very critical milestone for us. As I said, that's the Bitcoin tracker product. So once that launches, we're likely to follow that with this new other products as well, which I mentioned around yield, around taking advantage of that cash and carry product. But also looking at things like some degree of leverage as well, which will be the first time that's been introduced around crypto assets on listed exchange.
Hunter Diamond: Great, perfect. And my second question, you mentioned during the call and I agree, team is key for earlier stage enterprises, who is working there, the technology team, the sales team. Can you comment a little bit -- I know there was a recent technological hire, any more -- you brought on and why you feel it's the right team? And then the second part, I'm not sure how much there is IP or things that exchanges can use to sort of build a competitive advantage patents, or anything like that. I don't know if it's sort of just getting to the market, getting the volume and getting the customer relationships or the things that Gemini or you, other exchanges use this sort of patented technology? But just in terms of the team, I guess, additional color. And then how you view IP in this industry, if you view it as a something that company should focus on?
Richard Byworth: Thanks, Hunter. Yes, so we've made some very interesting hires of late. And what I -- we're always seeing the growth of the company from the very early stages. We're always evolving and having people grow with the company. And as they grow with the company, then we're obviously hiring more and more people to improve on the structure that we have. I think one particular hire that was very important was one we announced in the last couple of weeks with our new CTO. So Chris Ashe joined us from Mox Bank, which is a virtual bank in Hong Kong, part of the Standard Chartered Group. Prior to that he built Tandem in the UK. It was very interesting that Chris, if he took that organization, Mox Bank from 25 men development team to 250 men development team, move them from doing releases every two weeks to doing two releases a day. So the speed of features and products being rolled out just became very, very fast. And actually I had this conversation with Chris a couple of days ago where I said when do you think we'll be able to do moving at that sort of speed? And he anticipated somewhere between the next one to two years which would be phenomenal. So that's very exciting. We're very focused on growing the sales team. Now we obviously have a very solid product offering in every part of the ecosystem. I mentioned before that with that formats around fund, we want to make sure that, that is really capitalized upon and that we get that out there in front of investors that really haven't had many options to access the offer that's available in this space. We think that the product we've built is extremely differentiated. And again, talking about people, Thomas Chladek, who is our portfolio manager running that fund out of Switzerland. He came from 20 years of experience in the traditional fund -- hedge fund space, 12 of those were Lombard Odier, the private bank. And so not only was he well reputed within the traditional hedge fund industry, but actually coming to crypto he's really helped many of these crypto funds get to the point of investability for institutional investors and help really upgrade that process. So that now we've -- the selection of 350 funds that we've met with over the course of the development of that fund, he's basically bought like Deutsche Bank, UBS, et cetera. So yes, people is core to what we do and the quality is just improving week by week.
Hunter Diamond: Great. Thank you. And then just the question on the IP. I don't know, R&D, how much that is a focus of crypto exchanges or it's more sort of marketing the product and patents and such things. Is that something that's sort of you view as critical in this industry? Do you view it’s more sort of getting to the market, building these relationships, getting the volume?
Richard Byworth: So for example -- it's a good question. I mean, generally the sort of the crypto mentality is that everything should be open-sourced and so on. But we do have patents and one particular piece of IP that we are in the process of looking to patent is the EQO Token actually, because it is so differentiated in terms of its design. So that's a good example of one of the innovative products that’s been designed for The Exchange that as you say, we're looking at patenting and having an IP.
Operator: Thank you. Your last question come from the line of John Todaro from Needham & Co.
John Todaro: Have you guys seen demand for added services on top of the custody business like staking or other yield products? And then as a follow-up to that, given your regulator relationships, any insight into how regulators are looking at crypto assets that are up for staking yield, including your own? Any comments there?
Richard Byworth: Yes, thank you. This has not been a core focus of the conversations that we've had with regulators at this point. As you pointed, EQO indeed itself has staking rewards in it daily. This was something that we cleared with legal counsel in Singapore to make sure that they were comfortable with that being listed under the Payment Services Act as a viable crypto asset. To your question about products and services on top of the custodian, absolutely, we do get this question from users and clients all the time, so they want to be using a highly secure custodian, but actually generating yield on those assets through either staking or through borrow and lending transactions. So, I mentioned previously in the comments that we're building in prime services model by integrating digital with our Borrowing & Lending Business, and access the trading UI that effectively integrates to about 20 different exchanges to provide a prime services offering. And that will indeed provide that functionality meaning that you can leave your assets in the secure, safety of digital, but actually get a yield on those assets as well.
Operator: Thank you, this concludes today's conference call. Thank you for participating. You may all disconnect.
