EKMH Innovators Interview Series
An interview series spotlighting global tech influencers, disruptors, visionaries, and of course, innovators.
Financial and regulatory technology company Securrency started 2020 announcing a $17.65 million Series A funding round led by strategic investor WisdomTree Investments and joined by Abu Dhabi Investment Office, RRE Ventures, Strawberry Creek Ventures, Panthera Capital and Monex Group.
New York-based Securrency develops institutional-grade blockchain-based financial and regulatory technology to support global digital securities transactions and facilitate global liquidity, including operations in the United Arab Emirates within the Abu Dhabi Global Market. Securrency’s mission aims to enhance capital formation and stimulate global liquidity by deploying state-of-the-art technology that is convenient, efficient and interoperable. Using compliance tools that establish a universal interoperable framework for automated enforcement of applicable rules and ready visibility by regulators, Securrency seeks to contribute significantly to the establishment of fair, liquid, and efficient markets worldwide.
Who can readers meet at the cross section of institutional-grade blockchain-based financial and regulatory technology and American Football in the UAE? Securrency Chief Strategy Officer Patrick Campos. Readers, don’t miss this eloquent interview with a leader, on and off the field. Via email Campos discussed a variety of exciting topics including how to prep for a successful Series A, development and adoption of Securrency’s off-chain identity and compliance framework, atomic swaps, universal interoperability, teamwork, his multiple roles in the Emirates American Football League… and the Steelers. Our interview follows.
EKMH: Congratulations on your recent $17.65 million Series A funding round led by strategic investor WisdomTree Investments. What advice do you have for platforms readying themselves for a Series A?
Patrick Campos: Thank you very much! It was a long and arduous journey, but it ended as well as could be imagined. WisdomTree is not just an ideal strategic partner for Securrency, but is also a great organization led by a fantastic group of people whose expertise are perhaps even more valuable to us than the funds they invested.
It is difficult – and probably somewhat misleading – to attempt to provide “one size fits all” advice to startups looking to raise capital. I’ve always hated the canned, simplistic roadmaps that tell you that you have to look like this, your presentation has to be this long, you have to show this, you cannot raise capital without revenue, etc.
I would say the most important thing is to look in the mirror and make a realistic assessment of what you are and where you are, then narrow the list of targets down to folks who are likely to find you attractive. Then you must speak directly to those audiences. Obviously, you need to have either a great product or great technology (these do not always go hand-in-hand!) and you have to have a team that can be trusted to execute. If you do happen to tick a lot of the conventional boxes – simple product, early and scaleable revenues, great team – then you can work the well-trodden VC trail and cast a wider net.
But if you have a transformative technology that requires time not only to deploy but for a market to mature around it, you may need to look for more patient money and strategic partners who are able to walk a narrower and more winding path with you but who can also deploy your technology to make that road shorter. That is more of a sniper shot than random spraying of the target area in terms of your capital-raising approach.
Finally, I would add two other notes. First, be open with your team and make sure that everyone is prepared for the hardships that lie ahead. Many people love the idea of being entrepreneurs but few actually have the stomach for the struggle, and it’s better to identify the deserters early than to have to deal with those issues further down the road. Second, it may sound harsh to say, but when you take money from an investor, you have in many ways become an indentured servant. Be prepared to defend the things you absolutely must but also be humble enough to know that, when someone has invested in your company, s/he becomes just as much a parent of your baby as are you. If this scares you (and it should) make sure you find investors who are like good parents: patient, helpful, understanding, but definitely unhesitant to say what you need to hear, even if it is not what you want to hear.
EKMH: Please share more about Securrency’s roadmap for software and platform development. How will your protocol take users into the future?
Patrick Campos: Because Securrency is a financial markets infrastructure company, the focus of main effort is on the development and adoption of our core technology. Of course, we are developing downstream applications that will be productized, and much of this is being done in parallel with the core platform development, but the primary objective for us is to become, in a very real sense, a multi-jurisdictional utility. When I talk about our “core,” I’m speaking primarily of our unique off-chain identity and compliance framework – what we call the Global Identity Mesh – to automate regulatory compliance for digital securities as they move across systemic and even national borders. Another key part of our core is our ability to leverage this Global Identity Mesh within our InfinXchange, which is basically a rich API library that allows simple connections by market participants into a framework of financial services – essentially a set of rails to allow seamless movement of digital value, all within a transparent and auditable compliance framework. This is perhaps less like building a railroad than it is like building the network of switches and signals that make it safe and convenient to move things across the railway system. We are spearheading some initiatives to create standards that are not dependent on a particular blockchain, so not so much like a protocol as it is a multi-jurisdictional framework to streamline the global movement of value without sacrificing transparency and compliance. So we think we are making the future both safer and more convenient for investors, financial services providers, and even individual consumers at some point.
EKMH: Please share a CAT-20 update. How does Securrency utilize multiple blockchain platforms to not only innovate but also improve its multi-ledger capabilities, strengthen network security, and ensure validated identity and multi-jurisdictional compliance?
Patrick Campos: Our Compliance Aware Token framework is, of course, blockchain-based, so any token created with our framework is more or less a smart contract that resides on some distributed ledger at any point in time. However, we call this a “framework” rather than a “protocol” because it is something of a shape-shifter. Effectively creating a token with our framework allows that token to move outside of its native blockchain environment and even across non-blockchain environments without losing those compliance characteristics.
By “move” we mean, in reality, an atomic swap in which the token is burned and then automatically reissued on a new ledger with its core internal governance intact. Equally critical are convenience and transparency, and this is where our off-chain architecture really stands out as unique and powerful. The first part of convenience is optionality: simply put, our framework does not require existing market participants to rip out old legacy systems and move things on-chain, nor does it require them to choose between using public ledgers or building extensively and expensively on private permissioned ledgers to harness the efficiencies of digital assets.
Legacy systems, public chain applications, and more compact, purpose-built bespoke blockchain systems can live side by side and interoperate with each other through this open framework. The second part of convenience is simplicity. Our Rules Engine is a plain-language abstraction layer that allows companies and their lawyers or other advisors to rapidly create policies, audit them, and update them in real-time without having to reissue the tokens that are governed by those policies. This system also creates a high degree of transparency, as the policies associated with a token (we call them “recipes”) can be easily viewed by compliance officers and regulators to ensure accuracy. You don’t have to be able to read code to read the recipe. You can also save and reuse a recipe. These rulesets can encompass many different jurisdictional rules, so the token can be simultaneously compliant with regulations in multiple jurisdictions. We think this is remarkably convenient and remarkably transparent.
“Legacy systems, public chain applications, and more compact, purpose-built bespoke blockchain systems can live side by side and interoperate with each other through this open framework.”
EKMH: Worst case scenario: when does Securrency deploy or recommend disaster recovery?
Patrick Campos: To be honest, this is why we have super-smart tech guys – and I’m not one of those. I will have to defer to my genius teammates to answer this one in detail, but I will say these two things. First, being ledger agnostic is, in itself, a form of disaster-proofing. If, for example, tokens created with our framework reside on a particular ledger that is compromised, we can very quickly move those tokens and all of the policies associated with them onto a different ledger. We know from direct discussion with central bankers and regulators that this sort of resiliency and protection of value is incredibly important to them. Second, Dan Doney, our CEO, not only managed critical government systems of great national security significance but was also involved in tracking how bad guys misuse systems, so it’s safe to say that he knows a thing or two about these issues.
EKMH: The New York-based company has established operations in the United Arab Emirates within the Abu Dhabi Global Market. What advice do you have for leading diverse and global teams?
Patrick Campos: I have personally been living and working outside the US for many years and in many different capacities, so my advice is, first and foremost, to understand that talent knows no borders. What is critically important is establishing an accessible central philosophy around which you can unify talented people from many different cultures and backgrounds. The Golden Rule is universal. Merit-based advancement is universal. Giving people a sense of ownership of their achievements is universal. Respect is universal. If your organization reflects those principles, you can operate anywhere.
EKMH: How will universal interoperability unlock the power of blockchain technology in the financial markets? What is the ultimate desired network effect of these pools of liquidity?
Patrick Campos: As I noted above, universal interoperability allows for optionality and collaboration. It minimizes the “silo” or “walled garden” effect that really restricts capital formation and the movement of value. This has the effect of pushing opportunity out to the very edges, which will hopefully expand the global economy and positively impact people all over the world. The “network effect” of liquidity pools is a concept we have been championing for quite some time. Simply put, linking venues within a common identity and compliance framework allows them to “see” each other in unprecedented ways. We don’t believe that this is a binary choice between, for example, centralized exchanges and decentralized trading methods. These can coexist and interoperate in a way in which the whole becomes greater than the sum of its parts.
EKMH: What problems in the blockchain and security tokens sector continue to keep you engaged in the sector (and awake at night)?
Patrick Campos: In the “keeps me awake at night” category, I would say security and adoption. Security is clearly of paramount importance when you are dealing with the movement of value that represents the livelihoods of so many millions of our fellow humans. This is an awesome responsibility, and this is why we believe it is so important to work with regulators and the incredibly experienced people in the institutional financial services space who tackle these important issues on a daily basis.
Adoption is another issue that every technology company faces. In our case, I would say that it’s more than just winning as a company, but ensuring that the markets do not congeal around the wrong ideas is important if we are to realize the tremendous societal benefits of increased liquidity driven by better and more efficient compliance. I suppose there is a bit of hubris in saying that, but we maintain that we are open to working with all of the brilliant players in this space. We simply believe that an open framework, optionality, and collaboration is the best model for the markets of the future.
EKMH: Lastly, which books top your “Must Read” list?
Patrick Campos: Well, I imagine I’m supposed to name a few business or technology titles here that will be helpful to your readers, but I confess that I’m not an avid professional reader. If I were to recommend one book in this category, it would be Peter Thiel’s Zero to One, which I find to a be a counterintuitively practical book with great insights. A colleague of mine at a previous start-up gave me that book several years ago and I thank him for it.
My reading list generally consists of books on history, philosophy, and metaphysics. I love fiction, but I’m a harsh critic, so I tend to choose carefully . . . and even then my favorites tend to be books like Marquez’s One Hundred Years of Solitude or Rushdie’s The Moor’s Last Sigh, which turn out to be beautiful, poetic musings on, well, history, philosophy, and metaphysics. So there is a great big non-answer, I guess.
EKMH: Bonus question: How do you balance your role as CSO and your multiple roles in the Emirates American Football League?
Patrick Campos: Ssshhh! My colleagues will likely tell you that I don’t balance it all that well, but I can’t help it.
I love football and I love coaching football. It is, in my humble opinion, the greatest sport in the world and the one that best combines human athleticism, strength, aggression, and intellect. No coach in any other sport has as much second-by-second intellectual engagement during a game as does an American football coach, so that is quite appealing to me.
I particularly like coaching American football in the UAE. We have such an incredibly diverse group of residents here, that I have coached players from over 50 different countries, ranging in ages from 8 to 50. You asked earlier about leading global and diverse teams – this is the ultimate form of that concept. I have on my men’s team right now, for example, quarterbacks from England, Ireland and the US, running backs from Egypt, Cameroon, and Syria, wide receivers from Canada, Lebanon, and South Africa, and an offensive line consisting of a Turk, a Hungarian, an Englishman, an American (Texan, no less), and an Iranian. And yes, the Iranian lines up right next to the Texan; the Texan, who is a 40-year old man, has taken the Iranian, who is an 18-year old high school student, under his wing. And I haven’t even begun to describe the defense, with its Mexicans, Russians, Algerians, and others, all led by a larger-than-life lawyer from Tennessee.
My wife and I got involved with the league back in 2012 so we could create an American football experience for our son who was 11 at the time, and since then I have had the absolute joy of coaching him and working with other young athletes and seeing how this sport, more than any other, helps to mold their character and build their confidence. He is now a freshman at Tulane but I’m still coaching kids and adults. I have also taken our teams to play in places like Shanghai, Singapore, Nur-Sultan (Astana), Düsseldorf, Amsterdam, Madrid, Cairo, Kiev, Bucharest, and lovely Antalya. I would like to think that the intellectual side keeps my mind sharp while the mentorship part enhances my empathy. Hopefully, that contributes positively to my role as CSO of Securrency (if any of my colleagues are reading!).
EKMH: Best play of all time?
Patrick Campos: Without a doubt, Franco Harris’ Immaculate Reception. Here we go, Steelers!