Oliver Linch started his legal career with leading law firm Shearman & Sterling, after which he became Chief Executive Officer and General Counsel of Bittrex Global, the global cryptocurrency exchange. He has over a decade of experience as a financial regulatory lawyer, having advised major investment banks, exchanges, and leading financial institutions on regulatory matters across the UK, EMEA, and North America.
As part of one of the world’s top-ranking law firms, Oliver specialised in various areas of financial regulatory advisory work, such as financial market infrastructure, payment services, and special economic zone and legislative drafting.
Dedicated to regulatory best practice in financial services, Oliver is an active member of the Financial Markets Law Committee’s Finance & Technology Scoping Forum and the AIMA Anti-Money Laundering Working Group. Oliver is also a Senior Consultant to the Adam Smith Institute, and heads up the ASI’s Fintech, AI, & Emerging Technologies Policy Unit.
Oliver is frequently quoted in the media on matters of legal and regulatory policy across the digital assets and fintech space, and is often highly sought to be interviewed for TV or podcasts from around the world.
He received a double first in Jurisprudence and a Master’s in Law, both from the University of Oxford."
Outside work, Oliver enjoys cricket, travelling, and cheese — often all at the same time. He tweets at @OliverLinch.
[00:00:00] Hello everybody and welcome to the Crypto Hipster podcast. This is your host Jamil Hasan,
[00:00:06] the Crypto Hipster where I bring you founders, entrepreneurs, executives, thought leaders,
[00:00:11] artists all around the world of crypto and blockchain. And today I have an amazing guest.
[00:00:17] I'm really looking forward to this interview. This man is the CEO of a very popular exchange around the world.
[00:00:25] He is the CEO of BitTracks Global, his name is Oliver Lynch. Oliver, welcome.
[00:00:31] Hi there, we're pleased to be here. Thanks for having me.
[00:00:34] You're very welcome. So let's yeah, it's an honor.
[00:00:39] So let's kick things off and I ask you first what's your background? And is it a logical background for what you're doing now?
[00:00:48] Sure, well as much as anything in the crypto world is logical. I like to think so. So I'm a lawyer.
[00:00:55] Hi background but I'd like to say I'm a lawyer in recovery. So I spend over a decade in financial regulatory law covering the whole gamut really.
[00:01:06] So traditional financial regulatory financial services, banks, broker dealers, financial market infrastructure and exchanges and brokers.
[00:01:15] And in the second part of what I did was advising on Pintec and you sort of you take financial traditional financial market infrastructure and Pintec and matched them together when you sort of get crypto.
[00:01:29] And so for the past few years, I've been general counsel and CEO of BitTracks Global.
[00:01:36] We announced at the end of last year that we were ceasing operations. And so I'm spending my time now undergoing an orderly one down of a of a crypto exchange, which is.
[00:01:48] It's just appointingly novel right where we're so used in the press and public consciousness per crypto exchanges to be the focus of scandal or people losing money.
[00:02:00] And so I'm really proud that we're showing that there's a better way of doing it. There's a better way of doing everything including shutting up shop.
[00:02:08] So we're in a process of giving everyone back all of their funds and really showing an orderly one down or something that can be achieved.
[00:02:16] So that's what I'm spending my time doing. I've also just become the new head of financial futures markets unit at the Smith Institute, I'm sure you and all your listeners will know they're in Smith Institute as one of the premier.
[00:02:35] Think tanks in the UK and they're really focusing now historically, they've been focused on more socio economic issues. They're really focusing now on Web 3, FinTech and the opportunities that act on a board to really help grow the UK's standing as a hub.
[00:02:55] And it's kind of thing, which is what the UK says it's wanting to do.
[00:03:00] Interesting. I was part of a I was I was a Celsius customer so I understand with the with the one down bankruptcy process is all about more than everybody know again.
[00:03:13] You know, but you know there is growth. There is development in the markets and recently the FCA and the London Stock Exchange made a couple announcements right regarding exchange trading notes.
[00:03:31] What are those announcements all about? How's that going to help build UK's then financial system? What is that?
[00:03:39] Yeah, it's big news. So the UK for some years now has said that all financial instruments which is the UK equivalent of securities and the EU equivalent of securities as well.
[00:03:56] We call them financial instruments but we mean derivatives and exchange traded products and things that aren't just spot.
[00:04:04] The UK said all of those in relation to crypto were banned for everyone right completely unacceptable no matter how sophisticated high net worth large corporates.
[00:04:15] All the people that normally get exceptions from those kind of things, there were no exceptions and the you know that the market said.
[00:04:23] You know this puts the UK's real outlier because the EU on their neighbor does allow them.
[00:04:29] I think you can get a license in the EU and under Miffed and you can allow them for certain categories of users and the UK said no we're not doing that.
[00:04:40] And this was in a world where everyone looking increasingly to the institutions to really drive progress in the crypto sector.
[00:04:48] This was holding the UK back quite a lot and I think to the surprise of many the FCA last week said okay actually we're going to change our mind.
[00:05:01] We're going to allow sophisticated investors high net worth and large corporates to trade these instruments.
[00:05:13] And so that's where you get CTS, crypto ETFs exchange trade notes and you know for the first time this there's for a while there's been disconnect between what the government say they want which is UK to become a up the crypto and for digital assets in general.
[00:05:30] I want the FCA to regulate to say they want which is a very cautious conservative fat down frankly for the first time we're actually seeing those interests align and moving towards the policy driven government side of things is actually that there is a there is a safe way to do this.
[00:05:48] Yes, we need to put protections in place.
[00:05:51] I think those people that the seller will now open it up to retail their wide of the mark. I mean maybe one day but but that's somewhere in the future.
[00:05:59] Those protections are still very much in place, but this is the FCA I think getting on board with the idea that if the UK is really going to cement its place in the financial sector is more generally not just in in FinTech and digital assets but more generally it can't be this outlier that just has no note note.
[00:06:20] I'm so they changed the mind right this is a stark and abrupt shift right.
[00:06:30] What caused that shift and why is it now going to be a positive things positive thing for the UK.
[00:06:39] I think a number of factors will have gone into the decision to change the mind. I think the fact that you know the story of the crypto winter the last few years in general has been the strength of the maintain strength or even strengthen in of institutional interest in crypto right.
[00:07:00] The fact is every major bank now has a plan to quit the desk even once that say they don't every fund manager knows that they have to be offering some kind of crypto exposure to their clients.
[00:07:11] Otherwise they're going to be seen as stuck in the mud every market maker for a potato is now really engaging with crypto and what they want to do is bring 20 30 years worth of trading experience and modeling and risk and amount of testing management.
[00:07:26] All that experience that they've got in traffic they want to bring that over to the crypto sector and the fact is despite all the scandals you know you mentioned so it's earlier and that's really the least of the scandals from back in 2022 right despite all of those scandals the one thing is very clear is that digital assets are not going anywhere they're here to stay.
[00:07:48] And if you don't I think there's an increasing awareness that if you don't create a path for good actors to behave well all you really do is clear out of path for bad actors to behave in a various way.
[00:08:03] And so the UK in taking the step is not really loosening the network at all not loosening its protections at all what it is is creating a path way for compliance and that's what so many in the industry both in the traffic and in the digital assets sector want to see.
[00:08:22] And so that's why they'll be treated by this announcement because it's saying it's not a sticky fingers in the air and say no approach anymore it say okay this thing is real digital assets are real distributed legacy technology is important how do we make it work for people.
[00:08:41] I want to get into that comment you said i'm going to do that after this next question about the good actors versus the bad actors let's talk about the good actors first.
[00:08:54] For years you know everybody's like institutions are coming institutions are coming they're kind of becoming in the US obviously black rock and fidelity and all the others you know this past January had a or proof for a spot pickling ETF right.
[00:09:08] The institutions are here right but is it all that everybody expected it to be that the institutions arrived you know how has their appearance affected the overall market and then the market in the UK as well.
[00:09:24] So I think the question is a good one because it demonstrates the lack of patients that we're in industry have right it's really easy to get into that.
[00:09:38] We have achieved as say we meaning the entire sort of crypto community sector what everyone a call us we have achieved in in a couple of years what it took traditional finance decades to achieve.
[00:09:54] And the fact that there isn't a single magic panacea you wave your wand and then everything everyone's a billionaire right actually is an indication of just how powerful people know that crypto can be and they're impatient that their team is really succeed.
[00:10:14] So yeah the institutions are coming the institutions in many ways are here right but as you say the big shift for them ETFs that's three months old less than three months old right that like I've lost counter of the number of articles over the years and said oh you know Bitcoin instead or this this thing that happened didn't magically solve all of the problems and and and lead to a world.
[00:10:44] The sun trying to rainbows and I know that this stuff is hard right it's difficult conceptually it's difficult people are still getting ahead around that the US which I know we're going to talk about in a bit still hasn't figured out at a basic level what most crypto is right so are you going to solve the world's problems in three months no you're just not and I appreciate into you as I appreciate the cleanness but I'm a realist here and basically in the world of finance.
[00:11:14] Nothing gets treated in three months.
[00:11:19] I agree so let's let's talk about that comment about the good actors versus people are assuming our institutions and we'll get into that versus bad actors.
[00:11:32] Bad actors for the past week right bad actors nothing new but as bits of bad actors you know regarding meme points you know I don't even follow the meme coin frenzy but the markets tanked over the past day because we need speculative excess wiped out but you said it clear in the path for bad actors and there are do it there is crowdfunding going on which is more like stealing right now so how do we get into that?
[00:12:01] Right now so how do we clean that out so that's the bad actors go away or will they ever go away and the good actors can be more confident about entering.
[00:12:12] So I think there are a few points to make here the first is a little bit right but I'm going to make it anyway which is that the number of bad actors in the digital assets world is relative to the number of bad actors in traditional finance very small.
[00:12:31] Right but everyone loves the story about meme coins or about some stupid dog or about whatever it is and no one really wants to say stories when major financial institution is find or banks are a find or there's an investigation into traditional finance that just doesn't make headlines in the same way so I'm not I'm not the person that says oh you know don't point a finger at me when you've got problems with your own.
[00:13:00] I like well two people can be wrong okay but this also gets some perspective here in some context here.
[00:13:07] The second point I've made is look at the progress that's been made in the digital assets sector in the past three years right which is a very short period of time.
[00:13:17] The amount of work that has been done on a voluntary basis by the community by the sector itself as it grows up as it goes through this shift in focus from stupid rockets to the moons type stuff to actually just being yet another part of the wider financial institution wider financial markets has been enormous and you know I don't know.
[00:13:47] I don't want anyone to staff us on the back and say good job but I also don't I do want people to acknowledge that has happened and is continuing to happen.
[00:13:57] And the third point I'd say is a lot of that has been driven by initiatives within the financial digital asset sector but it's now being accelerated by actual engagement from governments and from regulators who for far too long have just sat there and said well look if we ignore this stuff maybe it will go away and we don't need to worry about it.
[00:14:17] Actually this comes from my point earlier which is the US is a classic example of the number of institutions.
[00:14:25] Bitrix being one of them but said look we want to do the right thing but we literally do not know how and you won't tell us how as so bitrix in the US which is not very well bit bitrix in the US ended up saying all right well look we just can't operate in the US anymore because you simply won't create a framework.
[00:14:47] Within which we can operate so is it is that the is that institutions for that the financial providers for just that the is that the exchanges for or is that governments regulators policy makers failing to do their basic job of providing a framework whereby people can actually provide services and the result is clear to see it's really clear to see.
[00:15:11] And the losers are in that case US citizens who not only now don't have access to the services that people around the world are having and are enjoying and are getting the benefits of because too many institutions are just saying right I don't want to touch us.
[00:15:27] Not only are they suffering that way but they're also suffering because the only people who are increasingly large number of people who are operating in the US are doing so without all of those protections and guardrails
[00:15:39] that decades of experience in the traditional finance sector have built up.
[00:15:44] So you know you're just creating a bad situation and over time making it worse.
[00:15:53] I was just thinking the same way yesterday.
[00:15:55] Yeah I grew with you 100% you know you said earlier it's said a little bit about about derivatives.
[00:16:03] And I don't know if you know about my background but I was at AIG for 11 years.
[00:16:08] So I know the dangers of institutions becoming bad actors when you can't even see what's happening in your institution as a possibility.
[00:16:18] So you know and then when I write about you know these etn's in UK being only available to professional investors.
[00:16:27] So professional investors or quote professional investors are not you know have that been in crypto and are not native.
[00:16:37] How do you define what a professional investor is in crypto because it may not be who you think it should be.
[00:16:47] Well so thankfully the UK has a pretty good framework for this and they over many years.
[00:16:54] Including going back to when they were part of the EU which is where this terminology comes from have built up a pretty good explanation of what that means where it gets difficult is in more the sort of on the peripheries right.
[00:17:08] So so for some purposes the UK has a system of self certification.
[00:17:13] And in some cases it doesn't in crypto is going more down they doesn't apply route.
[00:17:18] So there will be some people who will sort of assume that they fall into a category but but won't or assume won't fall into a category but do.
[00:17:28] So there's going to be an awful lot of people out there that are just going to need to go and take legal advice on this.
[00:17:33] It's not really difficult but you do need to work through the logic and work very carefully because you don't want to find yourself on the wrong side of the line that's for sure.
[00:17:47] I know in the US, the FINRA put together a comprehensive qualification exam.
[00:17:55] I was one of the first 200 people to pass it.
[00:17:58] I didn't pursue a financial career but is there some kind of qualification, you know like a Fender equivalent in the UK where people can take exam and say hey you know I'm a professional qualified investor or advisor.
[00:18:15] So the system works quite differently in the UK.
[00:18:18] It's much more about status and you know one of the one of the major categories that people are going to be relying on relying on is the requirement to be a large corporate.
[00:18:31] And those take into account things like number of employees and revenue and and and that kind of thing so it's much less focused on passing exams and much more focus on your status and your experience.
[00:18:45] Got it. Okay, so in addition to the ETNs and in addition to the FCA stock exchange regarding these notes.
[00:18:54] One of the regulatory concerns and solutions are coming down the pike in both the UK and the US.
[00:19:02] So in the UK there's two big things going on. There's the stablecoin regulation which is you know progressing really well and I think it has some problems and there are some things that need some work on but it's getting there.
[00:19:19] And then there's the wider regulatory framework for utility tokens.
[00:19:24] That seems to have taken a bit of a backseat at the moment.
[00:19:28] I think it is an important component and I know a lot of people are asking for that to be accelerated as well.
[00:19:35] The US on the other hand a man is a story of people pulling in all sorts of different directions.
[00:19:42] So we got the Bitcoin spot ETF that was big news next in the pipeline is apparently the E spot ETF.
[00:19:51] That could be in the next couple of months. I think it was going to drag out a little bit longer than that because I think the politics behind it which essentially goes to the classification of ETH is good upset a lot of people in a lot of different ways.
[00:20:06] So I wouldn't be surprised if that drags on for some months and maybe even into 2025.
[00:20:14] You've then got the perennial question, like the one that nobody has solved or even really tried to solve which is the fundamental characterization of crypto other than BTC and maybe ETH.
[00:20:32] And so you've got a bunch of cases, most high priority XRP case.
[00:20:37] But you've still got this problem that the US has had in the very beginning which is that it tries to view crypto through the prism of traditional finance.
[00:20:48] And so you get this unedifying discussion as to what is crypto is it a bit like a security, a bit like the modesty and the relevant.
[00:20:57] The answer of the best answer is actually no it's none of those things. It's crypto and it's its own class of assets and the only way to make sense of that the only way to regulate it the only way to allow people to engage with it safely is to regulate it on that basis.
[00:21:16] And actually engage with it on its own terms and say look, this is not analogous to all look closely analogous enough to traditional financial categorization.
[00:21:29] So you just got to have to deal with it because it's important and it's not going anywhere.
[00:21:37] So you see other countries in the world like Hong Kong, like Singapore, like changing their 100 year old laws to, you know, to adapt right.
[00:21:53] So you know what lessons are they learning from the US and the UK were that where they are, but they are making the they're making the adaption.
[00:22:01] Are they seeing that we're failing like what are these seeing that has making them, you know, make those moves quickly.
[00:22:10] Well, I think there's a bunch of reasons why they're doing it and until that list I would have places like to buy with Varra.
[00:22:18] I'd had Japan, career and all of these places are they're competing. They're trying to become a hub for this access to trying to cement their status.
[00:22:29] Even the UK, even the EU with mecha is trying to compete right no one ever accused the EU of being nimble right but even the EU has managed to do it.
[00:22:41] And the reason is they recognize that there's an entire sector here that is going to become increasingly important.
[00:22:48] Possibly to extent that the people just haven't quite realized and they want to be in the door.
[00:22:55] The US has not done that and it's pretty clearly signal it has no interest in competing.
[00:23:01] It has no interest in trying to grab a piece of the sector.
[00:23:05] In fact, if you look at the remarks of people like Jack Enzler, they want nothing to do with it.
[00:23:10] They don't want a piece of this sector.
[00:23:13] So that's why there's a complete difference in approach.
[00:23:17] There's people that are looking to an opportunity, looking to see how they can allow people to do it safely and in a meaningful way around the world.
[00:23:28] And then there are those jurisdictions, the US chief among them, that just say, we don't want anything to do with this.
[00:23:36] And I think it's very disappointing.
[00:23:38] And this is a pointing as a whole because I think the idea that you could do really achieve what you want to achieve in financial sector without the US.
[00:23:50] If you really think that the future of crypto and I do, you know, five, 10 years from now, whatever it is.
[00:23:55] Is that crypto should be another component of the wider financial services industry so you'll get the securities guys into the services guys and the commodities guys and the crypto guys.
[00:24:04] And you'll just like part of the same thing.
[00:24:06] So I think you can do that without the US is quite naive.
[00:24:09] The US still has the best infrastructure, has the universities, has the entrepreneurs, it has the technology, it has all of these components.
[00:24:19] So it's tempting to sitting here outside the US to think, well, we'll just pull down the shutters on the US and pretend it doesn't exist.
[00:24:27] Unfortunately, that doesn't work.
[00:24:30] And so I think it is incumbent upon the US whether that's Congress or the regulators or whatever it may be and I know US lawyer.
[00:24:40] But whatever it may be, they need to figure it out because without it two things.
[00:24:46] One, the sector as a whole, including US banks and US persons are not going to get what they want.
[00:24:53] And two, going back to this issue of bad actors.
[00:24:56] Again, this is the mantra if you don't create a path for good actors to behave well or you really do is create a path for bad actors behaving very easily.
[00:25:06] Yeah, we've seen plenty of that.
[00:25:12] So what do you think is going to be, or maybe they're lobby, but what do you think was going to be the tipping point to have the US come on board finally.
[00:25:22] Yes, there's a big point.
[00:25:26] Well, look, that's, that's the big question. I know we're suddenly going out of time here.
[00:25:32] I'll give you some suggestions as to what it might be and I think first amongst them is politics.
[00:25:38] I think lots of lawyers sit around and scratch their beards and look very serious about these things as if we were all engaged in a genuine attempt to come up with some kind of legal analysis.
[00:25:55] And the lawyers certainly are engaging in a genuine attempt. So the problem is the lawyers don't run the country the politicians do.
[00:26:01] The lawyers don't make the laws, although by shunting it off to the courts, unfortunately that's what's happened to happen.
[00:26:12] Having to create laws by case, which is just a really bad way of engaging with the the challenge that crypto setting in this reality is until the politics are sorted out and maybe once we're out of the election cycle this year, that can happen.
[00:26:28] But until this and direction, some policy direction, someone said, look, this is what we should be doing. Now let's go out and achieve it.
[00:26:37] I just don't think it's going to there's going to be that as you say in flexion point.
[00:26:43] It was going to be an interseer because I think there's 26 or 27 countries having their.
[00:26:50] So I think it's going to be a really interesting year.
[00:26:56] So I want to thank you very much for your time today. I enjoy speaking with you. I'm looking forward to seeing more growth and development in the UK.
[00:27:06] And I have one last question. How can people find out more information about you, about the work you do about this FCA London Exchange announcements or even, you know, I was going to say, be a customer biterex, but you're winding down.
[00:27:22] So how can they find a more recent? Yeah, I can't become a customer biterex anymore. But thank you.
[00:27:29] Of course, to everyone that has in the past and it's been a pleasure serving you in that capacity.
[00:27:35] If for some reason you want to hear what I have to say about things, you can find me on ex or Twitter or whatever was supposed to call it these days.
[00:27:43] I'm at Oliver Lynch and you can find me on LinkedIn as well Oliver on the school.
[00:27:49] Awesome. Thank you very much for your time today. Thank you very much indeed. It's a real pleasure.