Building Global Payments: Trust, Complexity and What Really Matters with Leone Parise, Trace Finance

[00:00:04] This is the Crypto Hipster Podcast. This is not a traditional interview show. These are perspective driven conversations with founders, builders and independent creators shaping what comes next.

[00:00:26] We go beyond headlines, beyond hype and beyond price to explore ownership, freedom and opportunity in the digital economy. Where builders talk freedom, not price.

[00:00:48] Welcome back to Crypto Hipster. Today, I'm joined by Leone Parise. He's the co-founder and CTO of Trace Finance. Leone's journey spans technology, crypto and the challenges of building financial infrastructure across borders. Rather than focusing on products or announcements, today I want to go beyond the company and understand the builder himself.

[00:01:16] What shaped Leone and what he saw that others did not and what he's learned along the way. Leone, welcome to Crypto Hipster Podcast. Hey, thank you for having me. Hello everyone. I am Leone. I am the CTO of Trace Finance and co-founder. So, for the first question, I always wanted to be an entrepreneur. I always wanted to build something by myself.

[00:01:44] I started my career as an engineer. I did computer science and worked for Brazilian companies up to 2013. After that, I got my first job remotely. It was not even a thing to get to remote jobs at the time. But in 2013, I got my first one. It was a US startup at the time.

[00:02:13] And we had like a boom of startups that collect geolocation data, like Foursquare or Yelp. So, he went to build a competitor of this type of networks. And I worked on the iOS app for them.

[00:02:37] After one year and a half, I got to another app called Stop, Bread and Think. Another startup that did an app for meditation and Headspace. You had the Headspace and this Stop, Bread and Think. This is the other app that worked for another year.

[00:03:00] And after that, I joined Trust Wallet. It was a very interesting way. So, I joined Trust Wallet. We had only... When I joined, we had only five engineers. Binance was very small at the time. Binance was like the employee, I don't know, 250 something at the time.

[00:03:28] It was in 2018. And there is where I learned everything about crypto. Because when you create a wallet, when you work on a wallet, you know, you have to know about everything that is happening in this space. So, I saw the beginning of Defies. I saw NFTs. I tend to say that that time was more exciting than today.

[00:03:57] Because today is much more like institutional, on-ramp and off-ramp. I don't see too much stuff happening and being created. Today is much more like, oh, there is a new shiny blockchain that has more TPS and less gas. And you say, yeah, okay, whatever. Like, it's not having anything new for me.

[00:04:22] But at the time, I got the Binance Smart Chain launch. So, I was in an event in Binance Smart Chain launch in Berlin. And there is where I met Bernardo, the CEO and co-founder of Trace Finance. So, it was a very interesting event. And there, I was with another Brazilian at Binance. And we were talking.

[00:04:52] And then I got another Brazilian like, hey, Brazilians, Brazilians. I think he didn't see any other Brazilian in Berlin at that time. It was in the ETH conference in Berlin. And he was, hey, Brazilians, Brazilians. And then I met him. We exchanged phones and I met him in this event. So, it was a very exciting time to work with blockchain technology at the time.

[00:05:21] And after one year, he said, hey, I want to build a WISE for businesses. I want to build a company that do cross-border that. And I was like in the blockchain space. I was not so excited about the idea, you know.

[00:05:44] But when he introduced me how they do the operations, I realized, okay, there's a lot of space to improve here. Because in blockchain, like everything is so fast, so automated. And in the TradFi space, everything is so manual. Everything is so labor-intensive, so slow, you know. And then is where I realized, okay, there's a lot of room to improve here.

[00:06:13] And I joined him one year after to fund Trace. Got it. So, let's see. Before you started at TrustWallet, right? You were in TradFi, right? Then you joined TrustWallet. There was a time there where you had a transition of wanting to go from just working on technology to building, you know. What was that moment?

[00:06:41] What was it like when you made that realization that you wanted to do that? Yeah. So, my first contact with Ethereum, for example, is I tried to create a mining rig in my home. So, I put like 20 cards for myself. I had like a huge rig in my living room, you know. Like burning GPUs to mine Ethereum at the time.

[00:07:09] And I got some friends that they also joined me in this adventure. And I had like around 50 cards in my living room, you know. The noise was unbearable. The heat was, man, there was no way I could stay in that living room. And after 60 or 70 cards, the energy of the neighbor, it went down, you know.

[00:07:39] So, this was my first experience. And because I could get stable energy and some cards, they start to burn. I decided, oh, I need to get into this tech, you know. So, this is where I started to try to find somewhere to work with blockchain technology.

[00:08:04] And I was searching for this type of job, but Trust Wallet found me. It's something the other way, you know. And when, like I was used to receive using Swift. I was used to receive my payments using Swift. And it usually took like a week to get the money.

[00:08:29] So, the contractor, he said like Swift on Monday, I would get the money like on Thursday or Friday. Like it was the norm in Brazil. And when I joined Binance, I was receiving in BNB. So, the salary was in BNB. I exchanged to BTC. I sent the BTC to another because Binance didn't have any presence here in Brazil at the time.

[00:08:56] So, I had to send to another exchange. And then I exchanged to Brazilian reais. The whole process was 20 minutes. So, it reduced from a week to 20 minutes to get the money. That's where I realized, okay, this is a new way to move money around. I need to be in this space. AI wasn't starting.

[00:09:26] So, this is a point in my career like AI wasn't starting at the time. But there was no GPT. And blockchain was much more exciting to me as a career to develop. So, when I joined Trust, we had like only 200,000 users. And then I saw that in two years and a half to scale to 15 million users.

[00:09:55] I never saw a project scale this way. And I was part of that. So, I'm very lucky to be like one of the, I don't know, eight engineers that work in a project like that. And having this contact and vision with like every type of blockchain integrations and smart contracts and projects and protocols and whatever that was being created at the time. That was great.

[00:10:24] So, now, you said the industry is more boring than it was back then. And I agree with you. I think it is too. So, why do you stay? I stay because I truly believe that blockchain is the future of how you move money. It doesn't matter if it is through Bitcoin or a stable coin.

[00:10:53] It doesn't matter like the blockchain underlying. Like the client, they don't care. You know? They just want the money like instant on the other side. As we are talking right now, like I think you're in US and Brazil. It should be this way. You know? It shouldn't take like days to receive.

[00:11:15] And the other thing that I think will be very exciting is like AI agents with blockchain. Like blockchain is AI native by default. So, because an agent can call a CLI, create a wallet, receive money, send money, sign transactions. And there are so many SDKs around. There are so many documentation around.

[00:11:43] So, it's much easier for an agent to operate a blockchain than try to integrate with a shadow bank API that, you know, they didn't update their documentation in two years and everything breaks when you try to integrate. So, I'm very excited for this new thing that I think will be the revolution of the compute for everyone.

[00:12:12] And money movement should be prepared for that. Makes sense. So, now that you're building Trace, right? What's harder, like what's harder about building financial infrastructure than people, than most people, especially ones who are on the outside, realize?

[00:12:40] Yeah, so, from a tech perspective, building a wallet was much easier. Because when you build a fintech, like from my perspective, there is so much that is not tech that is related to the fintech that is really hard. That I cannot solve myself.

[00:13:06] For example, I could build a new type of wallet myself from scratch. But I cannot build a fintech, a one-person fintech myself. Because you have regulations, you have partnerships, you have compliance. You need more people that has this complementary knowledge that is audited in tech, that is outside tech. You have relationships.

[00:13:36] You need more people. There's no way you can go around that. So, this is the thing that I didn't expect when I was starting this business. I thought, oh, I just need to integrate with the bank and bam, I have a product. But no. Like every customer, we need to understand their money flows. We need to understand their licenses.

[00:14:05] We need to understand the customers of the customers, the businesses. We need to also, after that, get all the documentation required to open the bank account, to convince the bank to do the business. You know? And we need to analyze everything. The regulation changes like almost every month. You need to adapt the system to the new regulation. You know?

[00:14:32] And as you add more countries, the things get much more complex. So, the complexity, it increases as you expand. So, this is completely different than a wallet that you add another blockchain. You just need to, you know, configure the node, configure the signing, cryptography algorithm. You need to increase the payload. And that's it.

[00:15:01] It didn't increase anything. Just add another one. But for FinTech, this is the thing that I think is the most difficult to build this type of business. Let's dive into that a little bit more. So, you talked about regulatory, talking about complexity, talking about relationships. So, you're dealing, you're dealing with trace finance. You're dealing with money that's moving across borders and institutions and different regulatory environments.

[00:15:29] And you're constantly growing and building and expanding. But you said the relationships are the most important thing. So, how do you build trust into something that gets seemingly more and more complex? Yeah, this is another thing that is very interesting in how we got here.

[00:15:53] So, for the first customers, Bernardo was the first, has the relationships, right? And we moved out to Sao Paulo. So, before going to, before funding trace, man, I was living in a, a, a, a, heaven. I was living near the seashore. Every day was sunny. I was doing kite surf every day while I was working with Binance, you know. I'm married in this city.

[00:16:22] Like, it's in the northeast of Brazil. It's like the Caribbean of Brazil. The water is green. Every day is good weather. Every day. And then, when I decided to go to build this, I said, okay, we need to go to Sao Paulo. Sao Paulo is the financial capital of the Latin America. There's no way that I need to move. And then, in 2021, I moved to Sao Paulo. And I'm here, living here since then.

[00:16:55] So, he opened a lot of doors with VCs. And VCs is one way to start to build this type of trust. Because if you got, like, if you raise money, someone is trusting you with that money. So, people see that as one way of having trust. And after that, you start to get into events. And then, start to get known.

[00:17:24] And then, having the meetings and getting customers. Like, all of our customers, they are B2B. You know that B2B. You need to, you know, shake hands. You need to get to the dinner. You need to talk a lot before closing the deal. And, we were, like, in the media. And, media was building this trust. Like, this team, and so on.

[00:17:51] So, there is no way to build this trust out of nowhere. That's another thing that I realized. You know? Like, okay, I don't know. I'm going to create an open source fintech. And then, try, no, there is no way. You know, you need to build trust, like, using media. You need to build trust with other players. And, after getting one big customer. Like, we got a deal local at the time.

[00:18:19] That was another thing that built a lot of trust. Because, you know, the exchange market in Brazil is so broken. It's so nonsense. That no one knows the rule. So, most of the banks, like, you start an operation. And then, you start with $50 million monthly. And then, man, you got a new customer. And, you want an increase to, I don't know, $100 million.

[00:18:49] $150. So, instead of asking the same documents, they act more. They increase the complexity of the operation. Because, they are more afraid. Because, they're not moving more money. Right? So, that was the thing with the local. Like, they were expanding the operation in Brazil. And, every new volume, the bank stops, helps everything. Oh, I need more documentation. You know?

[00:19:19] Like, almost all of the banks is the same. And, we convinced a bank at the time to do the operations for us. And, because we have, like, four or five customers, we have a pretty decent volume of the bank. We were the largest, like, partner of the bank. And then, we have more power to convince the bank to build, to do the operations for the local.

[00:19:48] And, we have more documents, and don't need to ask for more documents or bother him, as he scaled with us. So, this was a huge differential. So, we had the tech that the bank didn't have. And, also, we have this operational flow that was better than the other. So, this is the other thing. Like, you can have the best tech, but if you don't have the best operations, you will fail. You know?

[00:20:19] Yeah. This is the, this is, like, you can have the best APIs, the best interface, the best everything. If you keep asking for more documents, you keep asking for more information for every operation that the customer close to you, you will fail, eventually. You move to another one that has the worst stack, but the operational flow is smoother. Because, this is what you want. Like, you want to be bothered.

[00:20:49] Like, you want to keep it open, keep the business live, keep the rails of that country, the money flowing, and don't be to be, you know, bothered about any new volume that he brings to the table. Right? So, this is what we deliver very well. And to continue to do the expansion, we close the deal to get a banking reserve. Right?

[00:21:19] So, this is another thing that having our own infrastructure, we don't need to do partnerships with other banks anymore. Because even with partnerships, there is a very tricky relationship. Even for us. You know? For example, there is new regulation.

[00:21:40] You know that the, the, the, the, the PCC, the, the US government that they declared that PCC and CV, that is two factions here in Brazil, they were terrorists. Right? Because they also have presence in the US, they have presence in other countries, and they were classified as international terrorists. Right?

[00:22:02] So, anything, anyone that did any type of business with people from these factions, they would be considered terrorists. Or, they're financing terrorism. Because of that, we know that they have a lot of business here in Brazil for money laundering. And one type of business that they have most is gas stations.

[00:22:32] Because with gas stations, they have a lot of people that they pay in cash. You can, you know? And they don't have only the gas station. They have the gas distribution. Like, they have the whole, the whole supply chain. Because this way, they could avoid taxes. They could optimize the money laundering. And they also make money. With this type of business. You know?

[00:23:02] And these are huge businesses. They have, like, internet cable. They have fintechs. Here. They have fintechs. And after that, a lot of banks, they just said, hey, we are halting any crypto operation, for example. We are halting that. And then you have a flow with crypto. And then you need to find another partner that can do that.

[00:23:31] And negotiate another price and everything again, you know? And depending on the price of the other partner, the operation wouldn't stand. You cannot make money, you know? Because, so, this is the thing that you have in Brazil, right? Not only the regulations, but this is, it was a foreign.

[00:24:02] Like, Trump decided that, and affected the business here in Brazil. Affected the banking system here in Brazil. Because the bank became much more afraid of doing any type of business to customers that they don't know. And then, they closed their door also to any external customer. Because they don't know. And they are much more, they're not willing to take that type of risk.

[00:24:29] So, the risk appetite changes with these flows. So, it sounds to me, it sounds to me like you're really passionate about this. And I think maybe you're a better man than me because I would have stayed kite surfing. I would have stayed on the beach and kite surfed, you know? Instead of having to go on down this, this, this, this, this, like, you know, rabbit hole. Finding out who the, who the criminals are.

[00:24:55] You're like, so, like, you know, um, wow. So, there comes a point, you know, where, where, where, where, I guess, you know, what, what, what is your passion? What, why aren't you kite surfing? That is the best question. Why aren't you kite surfing?

[00:25:15] Yeah, so, I, I think this is a opportunity to do something that is so different, you know, that very few people can do. Because it's complex. If it was easy, everybody was doing that, you know? I really enjoy building complex stuff. This is something that I always, always seek for the next thing, you know?

[00:25:45] And with Trace and this financial world and the complexity that you see, it's something that keep me working, you know, keep me always researching.

[00:25:58] And, uh, man, uh, all the trips that I did, uh, all the people that I met, even having this opportunity to talk to you, uh, and exchange experience and, and talk, and, and, you know, and talk to people from different parts of the world is, is for me more exciting than the kite surfing, even though I enjoy kite surfing a lot.

[00:26:23] So, this is the thing that keeps me moving, you know, that keeps me, like, it is not the money itself. It is not the shares. I don't care. So, uh, it is what the day to day, like, it is stressful, I can say.

[00:26:45] Um, but it is rewarding at, uh, at the end, you know, the experiences of, of what you have or what you do, uh, and people that, for example, I, I say that today I am a better programmer because today I program with the minds of my employees.

[00:27:11] You know, like, I just discussed the matter. I discussed the problem. I put the culture that I want, the, the, the quality bar that I want, like they follow what I would do, you know? And then I just put the problem and they work on, on that. So, instead of having two hands, now I have 20.

[00:27:38] This is another thing that I had to learn along the way because I didn't have any experience with, uh, managing people and building culture and, and, and having, uh, this type of conversations. This, this, this, this, this, another, um, another thing that for me was a step up, you know, because most programmers that cannot, uh, they don't want this type of, of shit.

[00:28:07] Like, uh, they just want to build, you know, type in, and that's it. Like most tech people, they don't want to talk to anyone. I, I have a lot of employees that they had this way, you know, they leave me alone. Don't talk to me. Just, I just want to do my work. And, uh, having this shift is, uh, it was very interesting for me because it was a challenge for me also, you know? Uh, improve my communication skills, for example.

[00:28:35] Uh, uh, so, this is, uh, the other thing that for me is very, is, is, is what keeps, keeps me continue, you know, with that and all the chaos, man, there is no single day that is, uh, boring when you are a founder of a fintech. This is another thing. I agree. I agree.

[00:29:00] So what do you think, what do you think, what do you think had to change the most in you in order to become the leader of the company today? Cause you named a few things that are, that are like really great, like desire to work with people and, and, uh, lead and build. So what do you, what, what part of you had to change the most over the past few years? Uh, I think was the communication skills, but don't be afraid, for example, to go to a company.

[00:29:30] Go to an event and talk to an event and talk to strange people. I was very shy as any other tech guy in programming. Uh, that's why, like, I, I like to be alone. And going to events and meeting people and, you know, interrupt the, like there is a small group, you interrupt the guys and, Hey, I'm Leonie and so on. And, and, and, and, and, and, and, and, and, and, and, and, and, and talk to them and, uh, build the conversation.

[00:30:00] Uh, that was for me, something that it changed a lot. Like improving these type of skills, you know, by myself. So, um, I use some, some, some tools myself. Uh, you know that here, here in Brazil, uh, shrooms is very, uh, is illegal, right?

[00:30:25] So I used to take like shrooms every 15 days and that helped me a lot to improve my communication skills. I don't know exactly how, I don't have the science behind it, but I can, I'm sure that it helped me a lot to break these fears and change my mind. And he, and he will write my own brain. So this helped me a lot. Uh, I, I always say that to everyone, like, guys, you need to be educated on that.

[00:30:54] You don't know what you're missing. You need to do this type of stuff yourself and try by yourself and see how you change. And I change a lot. Like this, you wrote my brain completely. You know, I was, uh, man, I, I, I used to take that, like, since, uh, two thousand 20, I did a lot of research. And then, uh, there's a funny story that I always talk to our VCs.

[00:31:20] Uh, I decided to leave Binance and fund trace with two guys that I didn't know. I was knowing only by phone. I met Bernardo only once. My wife didn't want me to join. After a six gram of mushroom trip, I said to my wife, Hey, mushrooms told me to fund trace. She went fray and said, Are you crazy?

[00:31:49] You need to stop taking that. You're going to leave Binance to fund a company with two guys that you don't know? Because the merchant told you to do so? And I said, Yes. Yes, I want to go. And then because that trip, it somehow broke the barrier of fear. And I decided to go. And it was the best decision of my life.

[00:32:20] That's the best mushroom story I've ever heard. Dashie will be proud. Yes. Yeah, man. So, uh, yeah, man. Uh, this is a hobby. Like it's a very strange hobby of mine. I, I even cultivate myself. Uh, I have books about it and how you can do it at your, your home. Uh, so I don't have plants. I have mushrooms here.

[00:32:42] Uh, and, uh, it is something that I, I always, when I go to a founder's event, I always take some, uh, of those mushrooms, uh, and then I distribute, you know, to all the founders. Hey, this is a little gift from me. Try yourself. And everybody is really happy to receive that. I don't know if, if they go and take, uh, most of them they do because after that they

[00:33:07] talk to me about their trips, but, uh, I always give as a gift here, you know? So, it's very, so this is something that, uh, uh, answer your question, like change a lot, uh, uh, in my, in my brain and my, um, my personality. Like just change it. Uh, uh, and the other thing is to build culture.

[00:33:36] This is all the really hard thing to do because I always say that you need, you have like, I don't know, 50% of the time you are explaining what you have to do. And the other 50, you have to convince the guy to do. So, so this, you know, 50, 50. So the second one is really the hard part because you have one on one.

[00:34:03] You have, uh, uh, I don't know, you, you, you can still distribute shares if you're, if you're employees, uh, you have to exchange like, uh, how good the company is going. You have to, you know, always to keep them, uh, uh, up and, and try to do the best of the work. You did this work of convincing, uh, people to, to, to, to do the best, you know?

[00:34:33] Like there is a, this is the very hard part. You can hire a really good employee. If you don't do that, they won't be performing, uh, as well, you know? So this is the other thing that, um, first I had to prove myself. I was a very good programmer to them. And then the first, uh, uh, I did a lot of, uh, uh, all of the work in the first version. And then they just say, okay, this guy is really good.

[00:35:00] And then they, they, they, now they, they start to listen to you more. So this is, this is the first thing, like build this type of trust. Hey, uh, uh, I know, uh, uh, what I'm doing. So man, follow me, you know? And then the second thing is when you do a, when you, you introduce him to a problem,

[00:35:24] you have to let him to build their, his own understanding and the solution to the problem. Do not impose the solution yourself, let him build. And then you discuss if it is not that what I want, I discuss him. And then I convince him that is not the solution that he wants.

[00:35:51] So, you know, so this is the thing that, uh, you need to, you build as you, as you work, you know, like, uh, you, you build this language with people, you know? Uh, uh, because if it was easy, like, Hey, uh, work, work, work. And then man, slash, uh, uh, it is not this way.

[00:36:21] We know that, you know? So, uh, uh, yeah, this is the, the other part to learn as a founder, as a leader, like to build leadership. This is a very hard problem, you know, much more difficult than, uh, create any type of program. Now it's AI, you know, it's so much harder. Yeah. Great. So I have one last question. I want to thank you for that answer.

[00:36:50] I love the mushrooms are going to be memorable. I'll tell you for years from now, I'd be like, I thought we were really about mushrooms. Um, if you could, if you could sit, if you could sit down with the younger version of you, you know, on the day that you decided to, to leave finance and join trace, you know, knowing everything that you know right now, you know, what's, what's one thing that you would tell your younger self? Buy Bitcoin.

[00:37:21] Excellent. Sell everything and buy Bitcoin. Bitcoin. I knew Bitcoin the first time in 2010. It was the first time I knew Bitcoin. I knew about the technology and it was like pain. I know it was, man, it was, uh, but I was very young, man.

[00:37:41] Uh, I didn't know, uh, if that would work or not, but yes, uh, if I understood better the protocol and, and, and how it works. And the real value of, of the math of how they solve this problem, you know, of trust and, and, and money movement and, and supply. Right. I would go all in. I wouldn't buy a new car.

[00:38:11] I wouldn't, you know, spend money on other stuff. I would go all in Bitcoin in 2010, 2011. I would go, you know, and keep that and try to keep the, the, the coins. This is the, the most difficult part. But yes, I would say to myself, Hey, buy Bitcoin and keep it. And you're, you're a thinker later. That's a great, that. Yeah. Highchurch 2020.

[00:38:39] So, um, I wanted, I enjoyed our conversation. Thank you very much for your time today. I enjoyed you very much. Thank you, man. Thank you.