0:03

Dina Ben , welcome to the Havring Report podcast

0:06

. Thank you both for doing this tonight . It's a

0:08

pleasure . Glad we could finally make this happen

0:10

. Dina , if you don't mind , you just provide us a quick

0:12

introduction for yourself and your relationship

0:14

with Ben .

0:15

I am from PRL Purvis Threadman

0:17

Limited . We are based in Toronto

0:19

, our head office . We're a Canadian privately

0:22

owned , employee owned brokerage

0:24

, insurance brokerage . We have

0:26

four offices across Canada , including

0:29

Montreal , vancouver and Calgary

0:31

, with 160 plus

0:33

employees to date . Our brokerage writes

0:35

various types of businesses

0:37

, including emerging industries and

0:39

crypto , of course , and AI

0:42

and tech in general is

0:44

a big part of this business . Ben is

0:46

our trusted partner . He is our expert

0:49

in crypto , ai space

0:51

and various other spaces as well . He

0:53

is our gateway to London , so he

0:55

is based in London . Their brokerage is

0:57

our partner in terms of reaching out

0:59

to the Lloyds markets . When we are placing

1:01

business in Canada , because there are no Canadian

1:03

markets , he is really the person

1:06

, the market , that we rely on .

1:07

That's a great intro . I love that . I think we should

1:09

do this more often . I used to hear that intro

1:11

more often there , dina .

1:12

That's great , it's true , you know

1:14

it .

1:15

Ben , it sounds like there's a lot of weight on your shoulders

1:17

, man .

1:18

I don't know if I'm going to live up to this . This

1:20

is tough , Brad .

1:20

Is there anything you would add to that Ben ?

1:23

I mean no , I think Dina said it all . I mean we've worked with

1:25

Purvis Redmond for a long time now

1:27

. We've got a very close relationship with the

1:29

team there . It's been great to see the Canadian market

1:31

develop and come into its own from a

1:34

crypto perspective . Obviously , we've had quite a number

1:36

of events Great big consolidations in the crypto

1:38

market , coin-based making a big move into

1:40

it . So it seems like it's the renaissance

1:42

of Canadian crypto I think is upon us . Yeah , it's

1:44

been great working with Dina and the entire team

1:46

at Purvis Redmond to help them place

1:48

their clients in the crypto industry into London . Are you

1:50

?

1:51

seeing a lot of Canadian action right now , even

1:53

though it's a bear market .

1:54

Yeah , I think more broadly , I think we've

1:56

seen our submission count

1:58

increase , if anything , through the bear market

2:01

. I would say that the interest for

2:03

crypto asset insurance has not really

2:05

waned whatsoever , I think the only thing that

2:07

has changed as the people actually buying

2:09

it right . So the interest is still there . But because

2:12

everybody's tightening their belts , there's been

2:14

pressure to delay buying

2:16

insurance until you actually needed or looking to

2:18

structure your risk transfer in a different way

2:20

. To the digital asset team . We were at permissionless

2:23

in Austin , texas , in September

2:25

and we were just blown away by

2:27

the relentlessness of the space . Right

2:29

, it doesn't matter what's going on in the world . People

2:32

are still building , people are still really

2:35

believing in the technology and pushing

2:37

the space forward every chance that they get

2:39

. We're , incredibly , still bullish

2:41

on the entire market . I think what

2:43

we've found is the people

2:45

that are in it for the long haul are still

2:47

here and they're still building and the

2:50

price will do what the price does . It

2:52

doesn't really change the underlying use case

2:54

and the technology and the thing that really

2:56

makes me believe in this space , and so there's

2:59

been no change from my standpoint .

3:01

How did your paths cross ? How did

3:03

you become so passionate about the insurance

3:05

side of digital assets ?

3:07

Great question , and actually this crosses over with Purpose

3:09

Redmond actually . So I got my start

3:11

in Canada . So I'm from Toronto , originally from

3:13

a little town called Aurora outside of Toronto

3:15

. I was working as a broker in Toronto

3:17

and actually I got the chance to work with

3:20

one of Dina's colleagues . His name's Mert

3:22

. He was my old boss and he kind of showed me the ropes

3:24

of insurance and he was an absolutely incredible

3:26

, incredible mentor and we still got a very strong

3:29

friendship , you know , 12 , 13 years later

3:31

.

3:31

So I got to know you Ben .

3:33

Yeah , exactly yeah . So I moved over to

3:35

London eight years ago

3:37

, so in 2017 , I actually got

3:39

quite sick in 2017 and I ended up

3:41

taking about six months off work . I was

3:43

working at an underwriting company in London

3:45

called CFC and they were very kind to me that

3:48

they let me take the time off and I had some

3:50

surgery that I really needed to like

3:52

function and be a human and

3:54

that came with time off to recover

3:56

. During that time off , I remember just thinking to

3:58

myself you know , I'm going to be damned if this time

4:00

is not put to something worthwhile

4:03

. I just couldn't stand thinking

4:05

that this six months I would

4:07

just be on a couch and like watching movies and

4:09

just like doing nothing . So I put my mind

4:12

and kind of resolved myself to say , well

4:14

, I'm going to learn something , I'm going to learn one thing

4:16

and I'm going to put that to work

4:18

when I get back into my job . And just

4:20

so happened that I was on YouTube

4:22

and a video got recommended to me and it was

4:24

actually Don Tapscott , who's another great Canadian

4:27

blockchain figure in this space , and

4:29

he really kind of opened my eyes

4:31

to the potential of what blockchain could be and I remember

4:34

just that sent me down this rabbit hole

4:36

of crypto . Cryptography

4:38

, you know behavioral economics , macroeconomics

4:41

, like everything , psychology , you know . I

4:43

think if you really get the bug , you kind of just

4:45

go down this path and start realizing

4:47

all the different threads that Bitcoin

4:50

kind of leads down into , and so when I got

4:52

better and I got into , went back

4:54

to work , I vowed to myself that this

4:56

is the thing . I felt like it had given me

4:58

so much during that time and I wanted to give back

5:00

to the community . It really kind of lit a fire

5:02

in me and so I got back

5:04

to my job . I ended

5:07

up doing a bunch of stuff in crypto in the company

5:09

, ended up leaving and starting my own company called

5:11

Coin Cover . It's like co-founded that in 2018

5:13

. I left that to focus more on commercial

5:16

insurance and that's actually when I got back in touch with

5:18

with Dina and Mert and the

5:20

team at Purvis Redmond , because I was establishing

5:23

the book at SuperScript in London

5:25

. From the close connection we had with Dina and

5:27

Mert , I wanted to really work with them

5:29

and bring those solutions to the Canadian

5:31

market and so that's kind of been the last four

5:33

plus years and so , yeah

5:37

, that's kind of in a nutshell and all

5:39

the ups and downs that come

5:41

with with focusing on emerging technology

5:43

, but it's been . It's been an incredible journey .

5:45

So you mentioned Don , is it Don ?

5:47

Don Tapska .

5:48

Don Tapska yeah , Now did you reach

5:51

out to him or did you read his book ? How did you guys

5:53

?

5:53

cross paths , I watched a video on

5:55

YouTube and then I read his book and

5:57

that was a thing and I was like

5:59

, yeah , this is happening , this is gonna

6:01

happen , this is what I'm gonna do .

6:03

Yeah , no , it's cool to see different people

6:05

in this space and their entry points are like what

6:07

they kind of discovered in the crypto space

6:09

first . Now , were you into technology before

6:12

that or not on your radar ?

6:14

It's a great question and I think

6:16

anybody who knows me now and knows

6:18

me back then would think that it's the most

6:20

unlikely story for myself

6:22

, because I was like the worst person at technology

6:25

. Like , for some reason , like if a spreadsheet

6:27

would break in my vicinity , everyone would just

6:29

blame me because I know it

6:31

was like that bad , but I don't know what happened . Like something

6:33

just clicked , like I studied music

6:36

in university actually , so not even anything remotely

6:38

close to technology or insurance

6:40

, but what it did is it gave me the tools to

6:42

like really study a discipline

6:44

and like get passionate and like put the work in

6:47

. When I started going down that path , the

6:49

ability to kind of just like you know , go in a room and

6:51

practice and learn about something and just kind of do

6:53

that for hours Something just clicked and

6:55

kind of just made sense and started going down the path

6:57

. Kind of going down the path got me into other stuff

6:59

, like you know , dina mentioned like AI and thinking

7:01

about the future , where actually these technologies

7:04

mix quite well , and I actually

7:06

gave a talk at an artificial intelligence conference

7:08

in London on how web3

7:10

actually fixes a lot of issues in AI

7:13

and actually having the confidence those emerging

7:15

technologies allows for a much better and safer

7:17

future for the development of AI . I

7:19

think like that has kind of like led me down this

7:21

whole path . That's been eye-opening and it's just been incredible

7:23

to learn all this stuff . You know , I said this actually in my talk

7:26

we've never lived in a better , more prosperous time

7:28

in the whole history of humanity , and so it's

7:30

important to take a step back and actually realize

7:32

that the time that we live in now , even though there's a

7:34

lot of stuff going around in the world , we're still

7:36

in a time where we've got access to education

7:39

like medical , we can earn a living

7:41

and stuff and relative peace and freedom

7:43

. So there's a lot of things that are very

7:45

positive still today .

7:46

I always feel like the best time to be alive is the

7:49

present with , especially with this . You know

7:51

, crazy exponential growth in technologies

7:53

, learning about them and I think your backstory

7:56

of learning about them and kind of shifting gears

7:58

and getting a holistic view of different technologies

8:00

is very critical in today's world the crypto

8:02

space , the bitcoin space they need people

8:05

like you because you know you're going to help onboard

8:07

the masses . You know you're helping companies get off

8:09

the ground and go in the right direction , where you're

8:11

going to get global acceptance . Maybe we could shift

8:14

gears a little bit into that realm . You know

8:16

why is insurance crucial for companies

8:18

, especially in the emerging technology space .

8:20

Insurance is a way to transfer

8:23

risk . There are so many ways to manage

8:25

your risk for company , depending

8:27

on what , what you do , but at the end

8:30

of the day , to transfer the risk

8:32

, once you've done your homework and put your

8:34

house in order , is , of course , an insurance

8:36

policy , and with that comes different

8:39

kinds of building your company

8:41

, and it evolves with you . So what

8:43

you need to do is , every year , sit down

8:46

and just do a risk assessment and think

8:48

what's going to wake you up at night , what's going

8:50

to happen that can

8:52

cost you your company or makes

8:54

you lose money or impacts your employees

8:56

or your growth or your future planning

8:59

or your , your reputation

9:01

. So these are all kinds of things that you need to consider

9:03

when you're planning for your business every

9:05

year Continuity planning and

9:08

how to move the company forward

9:10

, or , if you're a company that could be

9:12

acquired , what would add value

9:14

to your company . Insurance comes into

9:16

play in every one of those points , at

9:19

different capacity depending on what the

9:21

business is and what people do . Emerging

9:23

industries tend to be a bit of a

9:25

great area for insurers because

9:27

they are new and every company is different

9:29

. They're not cookie cutter and their operations

9:32

and their aspirations

9:34

are not necessarily same as another

9:36

company . The underwriters have written we need to

9:38

understand what they do very well and we need

9:40

to make sure that , even if the products

9:43

in the market are not made to

9:45

cover their exposure , that we tweak

9:47

them to ensure that every client's exposure

9:50

is covered . But that goes to Ben's

9:52

point , that you need to understand your clients

9:54

. You need to understand that sector . You need to

9:56

do your homework as a broker to be able

9:58

to to get into the mind frame of your client

10:01

in order to do that . So every emerging

10:03

industry space whether it's green energy

10:05

, whether it's crypto , whether it was cannabis

10:07

at the point like every one of these emerging

10:10

industries tech , pharma you need

10:12

to really be in it and

10:14

be a specialist in it to place the business

10:16

in the best way possible for your client

10:18

.

10:18

Very well said . I think like it's so interesting

10:20

because people will think , well , so what

10:23

Like ? Why do I need this ? Like what's what's the

10:25

important thing ? Like you know

10:27

, great insurance like so boring , why

10:29

do I care ? Why ? Why should I spend all this

10:31

money on it ? And I think there's a few really

10:33

like interesting points that today

10:36

we tell our clients pretty much all the time

10:38

. So I think the first one is insurance

10:40

is the ticket at the seat of the table

10:42

that you don't really know you need until

10:45

you need it right . A lot of our clients have

10:47

requirements in their contracts with big web

10:49

two companies that say you need insurance

10:51

, and so they won't do anything until they're about to

10:53

win the contract . And then they try to like get it all

10:56

in place right when they need it . It often

10:58

takes longer than they think . There's a lot of different

11:00

elements that go into it , and so I think that's one

11:02

. It's it's being able to get those

11:04

contracts that open the door and allow

11:06

the company to get to the next phase

11:08

. It's often needed to get like

11:11

directors on the board . So you know . Number

11:13

two it allows your board

11:15

to attract big names that won't

11:17

get on to the company unless they've gotten

11:20

insurance policy in place . And then three , like

11:22

you know , again , a permission list . Vitalik Buterin

11:24

even mentioned risk management in

11:26

his keynote speech where he said founders

11:28

should be more interested instead of

11:30

figuring out how to increase yields from three

11:32

to five percent , how to manage not

11:34

yielding negative 100 percent Right . So

11:37

I think this whole idea of managing your downside

11:40

risk as a founder isn't actually

11:42

that intuitive , right ? These companies

11:44

are so interested in just hiring customers

11:46

, like worrying about their , like private key infrastructure

11:49

hiring , navigating the market

11:51

, like there's all the different pressures on

11:53

, and they're just so focused on

11:55

going forward that actually looking

11:58

at your risk as Dina said , looking

12:00

at your downside risk what could go wrong Is it natural

12:02

? Because people don't want to talk about what could go

12:04

wrong . People don't want to say , oh , what happens

12:06

if this fails ? Oh , this is super risky . But

12:08

actually , as we found out with FTX

12:11

, risk management and actually looking

12:13

at your downside is the way that

12:15

you have sustained growth and you

12:17

don't wreck yourself . In crypto speed are

12:19

already KT , right , you're

12:21

not trying to get wrecked . And actually looking at downside

12:23

risk and insurance is a way where you can actually

12:26

have that sustained growth . And I actually just wrote an article

12:28

on this where I said that the unlikely

12:31

spotlight for insurance

12:34

and insurance being an important thing

12:36

in the market is actually FTX , because

12:38

we've seen what having zero

12:40

risk management protocols and processes

12:42

look like and it looks like the downfall

12:44

of the biggest company in the space and the

12:46

precipitation of a big winter

12:48

right On that . We've actually

12:51

seen an increase in people caring about third

12:53

party risk aggregation issues

12:55

. So it kind of feels like now is the best time

12:57

to think about insurance and it's all on everybody's

12:59

kind of top of the mind with the conversations we're having

13:02

.

13:02

Just to add to your point , ben , it's also

13:04

financing doesn't come without insurance

13:06

. Whether you go to the bank , whether you go

13:08

to private equity , wherever you go

13:10

, you go to becoming public . In

13:13

all these directions , insurance

13:15

is an asset to have and

13:17

it for banks , of course , it's a must

13:19

. But when you start working with going public

13:21

or private equity , they do give it a

13:23

lot of consideration and it has a lot of weight

13:25

that comes with it . So it's one of the ways that

13:27

you're improving your business

13:29

planning by making sure that you have

13:32

it . It kind of works both ways .

13:33

Why is it like with the whole FTX thing

13:35

? Why is it so difficult for companies

13:38

to have a one-to-one asset

13:40

ratio ? They're always

13:42

drawing on users' funds . I usually tell

13:44

people , if they're starters and they're not ready

13:47

to take their own private keys , you can go to BIP

13:49

by talking about Canadian consolidation . A

13:51

lot of stuff is kind of consolidating with them . I'm

13:53

noticing lately . What are your thoughts around that ?

13:55

It's funny because the reason I'm laughing is because I actually

13:57

mentioned it in the article , and the reason why it

14:00

was so hard for companies like FTX or Alameda

14:02

or Celsius you know any

14:04

of the other ones is because it's boring . Oh

14:06

, it doesn't generate the yield that's attractive

14:09

, right ? The fundamental thing that they tried

14:11

to do was incentivize

14:13

people to use their systems , platforms

14:15

, business , because the yields are so big

14:17

, and people were expecting these higher yields

14:19

because the DeFi yields are so big right , you're

14:22

getting 20 , 30% being

14:24

a yield farmer in DeFi back then . And so

14:26

for these centralized companies to compete

14:28

, they had to get really creative

14:31

. They just took people's money and gambled

14:33

it elsewhere . What they did is they

14:35

traded short-term gain for

14:37

long-term exposure

14:39

for them and everybody that touched

14:41

their business . And so it's interesting to kind

14:43

of see how that played out

14:45

, where , actually , risk management

14:48

was the thing that killed every one of those

14:50

companies . That was the thing that killed

14:52

everything . And if you actually look at DeFi

14:54

, so like coded rules where everything is

14:56

transparent , we didn't have that problem , like

14:58

everything worked as intended . And

15:00

so there's this whole conversation that I

15:02

think we should have as a community where technology

15:05

started to bring more transparency

15:07

to financial services . I mean , there's a lot of things that

15:09

Bitcoin has done , but that's ultimately

15:11

what it was supposed to do , is supposed

15:13

to clean up what happened in 2008 . And all

15:15

we've done with those types of companies is just

15:18

replicate it even worse , because we've

15:20

had really opaque companies that

15:22

could do whatever they wanted with client funds

15:24

with little to no oversight , and that's what

15:26

happened . And so I think the

15:28

future is something where an on-chain

15:31

environment , where transparency is key

15:33

for a good functioning business in this space

15:35

, is going to be absolutely paramount .

15:37

Yeah , absolutely Like the downside of FTX

15:39

, like rippled through the industry , like what

15:41

regulatory developments have you seen

15:43

then ? Like after , since all that ?

15:45

great question . I think every key

15:48

jurisdiction has done something differently , but

15:50

they're all kind of coinciding

15:52

on the same type of point . So you're seeing

15:54

Hong Kong , you're seeing Vara

15:57

with DeFi and then Abu Dhabi with the

15:59

ADGM regulator . You're seeing Mika in the

16:01

EU . Uk just released the financial

16:03

promotions regime . Us is

16:05

doing what the US does . But I think there's

16:08

obviously there's going to be something coming down the pipe

16:10

in the in the future , and all of them

16:12

are stating that you need

16:14

to separate out custody from

16:16

an exchange . It's following in lines

16:19

with traditional financial institutions , where you

16:21

can't both custody assets and trade it . You have

16:23

to separate that out into two different companies

16:25

. So I think that's that's something that we're

16:27

going to see . Just from the insurance perspective

16:30

, I think all of them have mandatory

16:32

insurance limits , and so that's one of the things

16:34

that , like you know , dina , myself , we're

16:36

really excited about , because if you

16:38

want to take this space seriously , you want to be regulated

16:41

, you're going to need to be under it , you're going to need to

16:43

open up the books and talk about risk management

16:45

, and this is a conversation that's going to need to be happening

16:48

a lot more . I mean sorry I didn't mention Australia

16:50

. Australia is quite , quite big and they're going through the wrong

16:52

kind of consultation right now , and so the whole

16:54

world is going to regulate

16:56

this industry in some fashion . I

16:58

do still think there will be regulatory arbitrage

17:01

between the different jurisdictions that coincide

17:03

with the different companies , that an

17:05

exchange might gradually and

17:08

gravitate more towards the UAE

17:10

, while maybe a custodian

17:12

gravitate to the EU . We

17:14

don't really know yet how that shapes out

17:16

, but I do think that there'll start to be more consolidation

17:19

in territories and jurisdictions on

17:21

certain types of businesses .