Bitcoin, Custody, and Wealth Planning Explained

Legal disclaimer, bespoke group

investment advisory services are

2

offered only through bespoke advisory,

an SEC registered investment advisor.

3

Everything we share here is just

for information and education.

4

It's not investment, legal or tax advice.

5

Bespoke does not offer or solicit

investment services to the general public,

6

and as always, investing comes with risk,

including the possible loss of principle.

7

The North Star or real, really the crux

of this conversation today is, um, to

8

reveal to practitioners, specifically

estate planning attorneys, um, and

9

advisors that a client or a potential

client that they once had to say no to.

10

They don't have to say no to.

11

And so, um, Matt, I'm gonna be, you

know, wanting to talk to you about

12

the structure, the legal structure

component of that DDA, um, the custody

13

piece of that qualified custody.

14

Um, and so that's what today,

today's conversation is about.

15

And just to introduce this

conversation, you know, Bitcoin

16

has crossed this threshold right

into the world of wealth planning.

17

Um, what began as a speculative

investment is now showing up

18

as a real concentrated wealth.

19

And its calling or forcing, uh,

planners, trustees, and custodians

20

to confront a new reality that.

21

Challenges traditional systems.

22

And so for many advisors,

the result has been simple.

23

When a client walks in with

significant cryptocurrency or Bitcoin

24

holdings, the answer is often no.

25

And so today I'm with Matt McClintock,

CEO of Bespoke and Didier Lavallee, CEO of

26

Tetra to explore what has changed and why

the answer doesn't have to be no anymore.

27

So, as I said, hitting this

conversation from two core angles,

28

legal structured structures, qualified

custody for cryptocurrencies.

29

Um, so this convo is for folks to help

folks know that they can start saying yes.

30

Um, and I'll also say that, um, for

the listeners, as you're listening,

31

you might find yourself with questions.

32

We hope that you do.

33

And when that happens, please head to

the episode page on our website and drop

34

those questions in the submission box.

35

We use those to shape

our future conversations.

36

Okay, so let's get into it.

37

Why has the answer historically been no.

38

When a client or a person comes

in with $500 million of Bitcoin

39

that they wanna put into a trust,

40

it's, yeah, it's not even like, it's,

it's just been a record scratch, just

41

hasn't made any sense for people.

42

Um, I'd say it's, there's probably

a couple of issues at play, at least

43

from the experience that I've seen.

44

Um, I'd be really interested to, to dig

in with DDA as well on from, especially

45

from a Canadian and cross-border

perspective here in the States.

46

Um, we can have two issues that,

that, that create a gap in the middle.

47

One is the, the Bitcoiners

who over a period of, uh,

48

just a handful of years, they.

49

Achieve a shocking amount of

wealth, a shock, shocking level of

50

wealth was started as a experiment

in peer-to-peer transactions.

51

And cryptography has, you know, the, the

economic value of which was probably a

52

rounding error as far as their family

wealth that's concerned now becomes

53

the dominant asset in their wealth.

54

And so they're just not, they're just not

ready to think about it as a generational

55

asset that is worthy of planning.

56

Um, also on the Bitcoiners side of

the, the mindset, Bitcoin, just for,

57

for a lot of reasons that, that most

people in the Bitcoin space already

58

realize is Bitcoin is very much an

anti, uh, establishment type of asset.

59

Uh, it's designed for disintermediated

peer-to-peer transactions, and so it.

60

You know, it, it has an ethos and it

has a quality that seems to attract

61

people who, who kind of kick against

the notion that we need a central

62

intermediary to manage anything, uh,

uh, of our, of consequence for us.

63

So that's kinda the Bitcoin

side of the equation.

64

The, uh, professional side of the equation

in my, in my world, estate planning

65

attorneys, trustees, asset managers,

CPAs, it's one of those things that

66

Bitcoin and the broader crypto asset

space has up until very recently had

67

an exclusively negative connotation.

68

You know, there was the Silk Road

there, you know, there have been.

69

Cyber attacks, there's been ransom

attacks, the currency for which has

70

been Bitcoin or other digital assets.

71

And so there has been a stigma that

attaches to Bitcoin and to digital assets.

72

So traditional asset managers

and estate planning attorneys and

73

people like that say, well, this

is, this must be radioactive.

74

I don't wanna touch it.

75

when the Bitcoin ETFs became.

76

Authorized here in the United

States has, have, we seen the

77

Overton window shift very much

in favor of Bitcoin as legitimate

78

alternative asset class for people.

79

And so Bitcoin has gone from, uh, this

experiment in peer-to-peer cryptography

80

to, uh, a legitimate asset that now

has tens of billions of dollars in

81

ETFs, billions of dollars in treasury

companies, many billions of dollars

82

now held personally by, by individuals

and families around the world.

83

I'd say that we're probably less than 18

months into a serious conversation with

84

estate planners and the professional

services inter industry around Bitcoin.

85

I agree with, with

everything Matt has said.

86

I, I, you know, to me.

87

The types of individuals generally,

and we're generalizing here,

88

that have accumulated significant

wealth with Bitcoin, tend to not

89

trust the establishment, tend to

not trust government, I would say

90

by definition, tend to not trust

financial services companies.

91

Um.

92

You know, there's a very, very

famous case in Canada with truckers

93

and trucker convoys around COVID

where, um, you know, cross border

94

shipping and whatnot was closed.

95

The trucker community was,

uh, being heavily affected.

96

They essentially went to Ottawa,

uh, where our parliament is, is, is

97

located and, and, you know, basically

put their trucks in the middle of

98

the road and stopped traffic and,

and did a little bit of a protest.

99

And then there's a lot of the

digital asset community or the

100

crypto community that funded, um,

these truckers because they were

101

literally being de banked, right?

102

If you were associated with that

protest, if you were president, the

103

financial institutions were stripping

you of your, your bank accounts.

104

Um, and that, you know, kind of

reinforced a little bit the ethos

105

of, of the community where you.

106

You know, you can't trust the

establishment, you can't trust the banks.

107

There's significant stories in

the US around e-banking, under

108

the previous administration.

109

I would say, you know, those stories

affect many Canadians as well.

110

Um, you know, actually

close to home as well.

111

Uh, for, for me, my father

was an entrepreneur 38 years

112

with a financial institution.

113

He got de banked.

114

Um, and that had significant impact

on the family, the banking, the

115

wealth planning of the family.

116

We had to turn around, try to find

advisors and, and you know, it, I could

117

see how it impacted my parents and,

and you know, everything they did.

118

So those stories are really weird.

119

They're, uh, really very real and there's

an aspect of the community that's that.

120

I would say the other piece too, to

reinforce Matt's point, at least in

121

Canada, while we have had ETFs and Bitcoin

122

Posture towards the asset class has never

been positive, has never shifted, so.

123

Many scenarios where you have

individuals with significant amount

124

of wealth and digital assets that

actually might be diversified.

125

Meaning they might have stocks or bonds

or anything else where they have an

126

advisor at a one of the big five banks

up here in Canada and where they can't

127

get service because it doesn't pass

essentially, the compliance parameters

128

or the risk parameters of the financial

institution, even though you've had public

129

and I would say that continues today.

130

Um, so today's day, at least in Canada,

digital asset, generally speaking,

131

are treated in the same category as.

132

Adult content or weed.

133

Um, and therefore it restricts your

capability to get access to, you know,

134

financial services to some extent.

135

So unfortunately, the

stigma is, is still there.

136

That is changing.

137

We have a more pro digital asset

government who wants to be competitive.

138

The, the work in the US and the

momentum on the regulatory side, I

139

think is contributing heavily to other

countries and jurisdictions essentially

140

paying attention and saying, well,

you know, there's regulatory clarity

141

that's happening in the largest

financial market in the world, right?

142

We need to piggyback, we

need to be competitive.

143

We need to, you know, create a framework

and, and those types of frameworks

144

like we saw last week with the.

145

CFTC and SEC announcements

around the categorization of

146

digital asset, including Bitcoin.

147

Well, that's quite positive because

it brings legitimacy to essentially,

148

uh, bitcoin and, and the asset class.

149

So I think there's, there's quite

a few reasons as to where we are,

150

where we're today, but, um, I would

say I'm pragmatic and positive

151

because things seems to be changing.

152

Um, and organizations like Bespoke

and Tetra that have been doing

153

this for a couple years already,

uh, tend to be, I think, uh, in a,

154

in a really great position because

we understand the ecosystem.

155

We we're there early when nobody

really wanted to get involved.

156

And, and I've already worked a lot

of, I'm gonna call it the kinks that

157

you have to figure out if you wanna

service the, the, the Bitcoiners.

158

So things have changed and now

might be a nice time to, actually,

159

Matt, I'd love to hear, uh.

160

planning attorney who had this

161

thing come across your desk.

162

Mm-hmm.

163

And the, the moment right to, if you

were answering in line with where the,

164

you know, the landscape was at the

moment, you would've been like, no.

165

And push this thing away and you didn't.

166

So let's hear that anecdote.

167

'cause I think that is a, a, a critical

piece of like, of actually cha Right.

168

Cha things have changed,

169

Yeah.

170

I mean, I think we were some of the

very first to take it seriously,

171

at least in the United States.

172

Um.

173

So just by, by way of a quick reference,

my background, uh, as an estate planning

174

attorney started a long time ago.

175

and I spent a lot of my career where

176

in addition to practicing law, I was

teaching other attorneys about the law

177

and how you created different strategies

to create different outcomes for people

178

with significant amounts of wealth.

179

And so in 20 17, 1 of my colleagues,

uh, who I had collaborated with on

180

other engagements called me and said

that she had a potential client that

181

had about $150 million worth of.

182

Wealth in their estates.

183

And she wanted some help planning

because she didn't have a lot of

184

experience unilaterally planning

in a state of that magnitude.

185

And so I said, yeah, I'll

be happy to help out.

186

And she said, well, the, the wrinkle here

is that most of the wealth is in Bitcoin.

187

And I didn't know anything about it.

188

even heard of the word Bitcoin.

189

Um, I was just kind of living

under a rock, raising a family,

190

doing business and whatever.

191

Um, I said, well, that's,

that's interesting.

192

I don't know anything about it.

193

So I started looking into it and the first

stuff I came across with some internet

194

195

It was the Silk Road has been taken down,

Ulbrich is in jail, um, with a double

196

life sentence, no chance for parole.

197

The Mount Gox hack came across my.

198

My screen is like 800,000 or whatever

Bitcoins were hacked outta this exchange.

199

There's all kinds of illicit

behavior and activity.

200

It's un, back then it was

thought to be untraceable and

201

perfectly anonymous and whatever.

202

It's like, this seems really dodgy,

but that also came across some

203

pronouncements from the IRS that

said it's, uh, how it's taxed.

204

It's taxed like property.

205

These convertible virtual currencies

is what the technology, what the, what

206

the, uh, tax laws, uh, were calling it.

207

It says how it's taxed.

208

Okay.

209

Well, it's, it's obviously

not an illegal asset.

210

It might be used for illegal purposes,

but the asset itself isn't illegal.

211

Um, it's not like we're planning with bags

of meth with methamphetamine or something

212

like that, you know, it's an asset.

213

Um, and so I said, okay, well,

I'll, I'll sit down and have a

214

conversation with these people and

just understand what's going on.

215

And, uh, what was supposed to be

an hour conversation turned into

216

about a three hour conversation.

217

And they were just, I was fascinated

by the story, story of, you know,

218

how they had built businesses in this

space and how it beco had, how it had

219

become the bedrock of their family's

wealth and what the technology was

220

designed to do and how it was working.

221

And, um, again, back, back then, I mean,

this is right after the hard fork wars

222

within the Bitcoin space, the SegWit, um.

223

The new SegWit protocol was

very contentious back then.

224

Bitcoin had just hit its all time high

of just under $20,000 US back then.

225

And, uh, it's like, this is crazy.

226

But at the end of the day, it's these

people's source of wealth and they

227

couldn't find anybody to take them

seriously if they, they couldn't find

228

anybody to help them think through, how

do you structure from a tax optimization

229

perspective, how do you structure this

so that when something ultimately happens

230

to one or both of us, the wealth that

we have and this asset is preserved

231

for the people that we care about.

232

Um, this, the same questions that people

ask about estate planning all the time.

233

And so, um, came back to the office

thinking about that and those,

234

those ideas were sitting with me.

235

And, um, I, I realized that if we could,

if we could establish, if we could figure

236

out how to establish the title ownership.

237

Of a digital bearer asset in a

legally recognized structure.

238

If we could figure that stuff out,

then every estate planning strategy

239

we have ever done is on the table.

240

We just had to figure that part out.

241

'cause we can do that with

brokerage accounts because

242

brokerage accounts have a title.

243

We can do that with real estate

because real estate has a title.

244

We can do that with

collectible automobiles because

245

automobiles have a title.

246

We could do it with digital

assets, digital bearer assets.

247

If we could figure out that,

that title, transfer structure.

248

And so then we started thinking about

what, what, what would an analog be?

249

What's, what would be

analogous to Bitcoin?

250

Um, Bitcoin is often

analogized as digital gold.

251

I say, okay, well how do we, how

if that's, if that a, if that

252

analogy holds and this idea that

you've got a physical piece of

253

gold, it doesn't, there's nothing.

254

About that physical piece of

gold that defines who owns it.

255

It's the possession of the asset

in a custodial framework that

256

establishes ownership of the gold.

257

Okay, great.

258

Well, let's assume that I've got

$150 million worth of physical gold

259

in my possession, and I want to put

that physical gold into various trust

260

frameworks for the benefit of my family.

261

Well, what would I do?

262

I would call, let's, let's assume

Tetra is not a digital asset bank, but

263

let's assume Tetra is a gold custodian.

264

They would have a physical,

physical vault that the custodian

265

controls and that the trustee of

this trust framework has access to.

266

I would have to physically move my gold.

267

From the vault.

268

I physically control ships that

with a Brinks truck or somebody like

269

that to take my physical gold to

tetras gold depository into a vault

270

that my trustee has control over.

271

Okay, great.

272

That, yeah, that's a, that's a

hassle, but that's how you do it.

273

Because if I, if I create a trust

and I simply say, Hey, DDA Tetra,

274

I want my gold to be treated

as though it's in your custody.

275

Well, he can't do that because he doesn't

have physical custody of the asset.

276

Um, I have to go through the process

of physically moving the assets.

277

Well, Bitcoin is very much the same

way, except it's digital, which means

278

it weighs nothing, which means it can

transfer in seconds instead of in months.

279

And so in order to establish a

fiduciary controlled, legally

280

recognized title framework for

my Bitcoin, I create the trust.

281

I create a ownership structure for

my designated fiduciaries, control

282

the vault in DDAs digital Bank.

283

And then if I, once I want to transfer

my Bitcoin into this framework, I

284

do a wallet to wallet or wallet to

vault transfer to physically move my

285

gold into this custodial framework.

286

We figured that out, figured out the

tax complica, the tax implications

287

and complications of all of that.

288

And um, I mean, I think we were the first

289

I wanna talk about this

solutions stack, if you will.

290

Um, is that the right term for this?

291

Sure.

292

Uh, and if you can speak to the.

293

The custody layer.

294

But I also want to look at the

relationship of these, these layers,

295

if you will, within the stack,

which is LLC, qualified custody,

296

because then there's other layers we

can get into after this, which is, you

297

know, uh, jurisdictions and mm-hmm.

298

And there's that piece as well,

which I'd like to get into after.

299

But can we zero in on, on these two?

300

Yeah, I think, I think I'll, I can

certainly take the, the custodial

301

piece of it and going back a little

bit to similar fashion, uh, to,

302

to the inception story of Tetra.

303

Um,

304

so for those familiar with, you

know, some of the largest, I guess,

305

hack in Canada had a big one.

306

Essentially a crypto trading platform

that would utilize at the time,

307

in 20 16, 20 17, as one of two in

the country is one known globally.

308

There was actually a lot of Americans

that had capital on Puerto Rico, cx and,

309

um, the founder was in full control of

the assets that were kept on platform.

310

There was no regulatory framework,

at least in Canada, around, you know,

311

third party custodian and the regulatory

and governance regime about this.

312

And what ended up happening is he left

with $230 million north of, of digital

313

asset, majority of it being Bitcoin.

314

There's a Netflix documentary on the file.

315

The guy, you know, kind of never

fully popped up, or maybe he did in

316

some random jurisdiction in India.

317

Um.

318

That forced the Canadian

regulators to essentially

319

establish a framework in Canada.

320

But they really came at it from a crypto

trading platform perspective, which

321

means, you know, if you were gonna offer

buy and sell, buy and selling services

322

to Canadians, you needed to ensure

that the underlying assets were fully

323

segregated with a third party custodian.

324

So essentially a regulated vehicle to

safeguard, uh, and protect the assets.

325

Uh, and there's the physical

segregation, and then there's

326

the legal segregation, right?

327

Within the trust framework.

328

That event essentially caused Tetra to

be formed because there was an argument

329

made at the time that, you know, Canadians

would need properly regulated custodial

330

platforms in Canada, and there was no.

331

Framework or regulatory bodies at the

time that really had thought about this.

332

So, you know, we went, we went

looking for a jurisdiction.

333

We ended up with, with Alberta,

the Provincial Trust Company.

334

So Alberta has what they call is the Loan

and Trust Corporation Act, which is a

335

set of rules that allows the provinces

to basically give our permission entities

336

to get licenses either on the, the, the

loan side or the trust side of things.

337

And we looked at essentially establishing

a digital asset trust structure

338

where LLCs and clients could come,

give us their assets, understand

339

that their assets were going to be

held in a regulated trust regime

340

overseen by the province of Alberta.

341

So we, we, we are registered under the

Minister of Finances office, right?

342

We have a lot of regulatory.

343

Um, you know, governance

requirements, et cetera.

344

And in the event, the governing

body, which is an act in the event

345

that something were to happen to

the tetra vehicle, essentially

346

Tetra had no ownership right?

347

Over the underlying assets.

348

Right?

349

Um, so all assets that come

to us are essentially never

350

in the legal name of Tetra.

351

They're always in the legal name

of the underlying beneficiary

352

or, or trustee or LLC, right?

353

So that's an important framework when

you look at, you know, essentially to,

354

to Matt's point, like transferring your

Bitcoin from self yourself, holding

355

and controlling it, and then making a

decision to give it to a third party.

356

Um, basically control and.

357

Protect that asset, you need to ensure

that under that framework, if that

358

entity was to go down for whatever

reason, there was, there would be

359

no recourse to your assets within,

you know, that, that framework.

360

Um, so we think Canada's very well

positioned to do this type of activity

361

because we have a pretty strong,

you know, federal regime and, and

362

provincial regime when it comes to,

to regulated financial institution.

363

We also, as I would argue as a country,

have a pretty good track record, you

364

know, of safeguarding, uh, capital

and, and, you know, our financial

365

institutions have, have relatively done

pretty well over the years, even through

366

things like the great financial crisis.

367

It, it's a pretty conservative country

when it comes to monetary policy and

368

governance around regulated vehicles.

369

There's a lot of compliance, a

lot of requirements, um, and.

370

It's a, it's a very good

construct for anybody that's

371

looking to protect their assets.

372

And I know Claire, you're gonna wanna

talk about jurisdiction in a moment.

373

Um, but it's important to understand

that in a regulated third party

374

custodian, ultimately what matters

is the ownership of the underlying

375

asset and the structure around that.

376

Mm-hmm.

377

Um, and I can't comment probably as much

as Matt 'cause he's looked at all over

378

the world in different constructs, but

to us, when clients come to Tetra, it's

379

very important that they understand that,

you know, the accounts are held fully

380

segregated interest for bankruptcy remote.

381

Right.

382

Um, and that's really the

framework that allows third party

383

data, it get comfortable with

transferring their Bitcoin to us.

384

There, there two, there are two sides to

that issue, which I think are extremely

385

important to zero in on, uh, Claire.

386

And this, this whole idea of title held

ownership that DD is talking about.

387

First of all, from the, from

the structuring perspective,

388

that's imperative to create

legal substance to the structure.

389

If you want to get the certain

tax outcomes, the legally

390

recognizable outcomes that, that

you get, that you want to get from

391

these types of trust structures.

392

That title held framework that

Didier just described is imperative

393

to get those types of outcomes.

394

The other side of that, uh, is about

the consumer protection side of it, and

395

that is that as, as he talked about,

um, by keeping assets segregated.

396

Instead of pooled.

397

So they're segregated.

398

So every client account is a dedicated

client account title held to the

399

client, or as we prefer title held to

the client's structure or strategy.

400

Then if something were to go wrong

with Tetra or any, any custodian, if

401

it's segregated and title held like

that, then the client's assets are not

402

commingled with the custodian's assets.

403

So in the event of a regulatory

action or an insolvency or something

404

like that, the client assets never

touch the balance sheet of an

405

imperiled financial organization.

406

Just, just to double click on that, I'm

gonna say, you know, specifically because

407

of the, I'm gonna call it relatively

young age of this asset class, um.

408

You know, the, the, the f those

frameworks are imperative because

409

you have precedent in DUS as an

example where people pledged their

410

411

And because those assets were not

held with regulated custodian and

412

segregated accounts, um, courts

ruled in favor of the corporations

413

as opposed to the individuals.

414

And those assets ended up being

the corporate corporations asset.

415

A famous case of that would be Celsius.

416

When you look at, you know, some of

the court rulings that you saw, uh,

417

out of the US outta the Supreme Court.

418

So, you know, if you are not working with

a Tera or a Bespoke, and sometimes, you

419

know, you might wanna be looking to do

certain things with your Bitcoin, um.

420

You might end up in a situation from a

legal perspective where you no longer have

421

a full legal, uh, control of your asset.

422

You've essentially pledged

them to a counterparty.

423

Um, and how that counterparty is

regulated, you know, the construct

424

on what they're doing, what your

access can become problematic.

425

So it's actually really important.

426

Like I, you know, I would say at times,

you know, Tetra could move, I'm gonna

427

say faster on some product innovation,

but we tend to be very conservative.

428

But the types of products we wanna offer

our clients, because the ultimate goal

429

is to protect the underlying asset.

430

Um, and I would say it's, it's, it's,

431

other events prior to that on Gox,

432

Puerto Rico, cx, I mean, the industries

pla with, with, with a few of them.

433

Um.

434

But the, the construct and

the conservatism around the

435

structure is incredibly important.

436

So there's a solution, and we've

covered this regulatory framework.

437

We're at a time now where

things are clicking.

438

It's legit and still, uh, I think what,

what I'm gleaning is that there's, there's

439

still this kind of like reputational

risk that maybe folks wanna, I mean,

440

I'm, I'm curious your thoughts on that.

441

I don't, I mean, I think that people

who, and this is gonna come, this

442

is gonna be a bit on the nose, so I

apologize in advance, but, um, I think

443

the people who think that there's

reputational risk are people who.

444

Um, they're looking for an excuse

not to, not to focus on this.

445

Um, this is, it's been

around for a long time.

446

The Bitcoin blockchain

has never been hacked.

447

The it is well inside the Overton

window of normal financial behavior

448

now inside the United States.

449

And it sounds like that's

expanding in Canada.

450

It's already expanding

across Europe as well.

451

Um, the people who are avoiding structured

planning around Bitcoin are laggards.

452

They're laggards, they're, they

are just not, um, they're, they're

453

waiting for others to move.

454

They're waiting for, you know, we are, um,

we are, I think we are beyond the tipping

455

point with Bitcoin becoming mainstream.

456

I mean, Bitcoin is mainstream.

457

Um, I think that crypto is probably,

probably, the jury is out on a lot of

458

the crypto assets that are out there.

459

But Bitcoin is mainstream.

460

You've got.

461

I mean, I haven't looked at these

numbers in a long time, but last I

462

saw over $50 billion US sit in Bitcoin

ETFs, and that's just in the ETFs.

463

Um, there there's over 19 million bitcoins

that have been mined to this point.

464

Um, and there are plenty of people that we

see that have hundreds, if not thousands

465

of those bitcoins in their self custody.

466

This is already mainstream wealth.

467

It's still early mainstream, but

we're beyond the tipping point.

468

We cross the tipping point, um, at

least the United States with the ETFs.

469

We've got clear regulations, we've

got clear uptake, we've got, um, large

470

endowments that are making allocations

of Bitcoin, so people who are slow to

471

people, by which I mean estate planning

attorneys, which I'm among them CPAs.

472

Fiduciaries that are, that are

reticent to plan for Bitcoin.

473

They either have so much business

that they don't need to even think

474

about this, or they're looking for

some excuse to not do the work.

475

And honestly, I think this is

our opportunity is to help them

476

understand that it's that honestly,

it's not, it's not really that hard.

477

It's, you know, it's

nuanced, but it's not hard.

478

There is something to be said though,

for, I'm thinking about a, a, it

479

doesn't even have to be an estate

planner, but in this case it is.

480

Or a person who is in a community

where like, there's such judgment

481

and like just there is judgment

cast on this, on this world.

482

And so it might be nice for them to,

for, you know, a practitioner who's

483

listening to hear, like, what would you

say to somebody who, to a practitioner

484

who is like seeing, right, they see the

writing on the wall, they are curious

485

and they get right, like they get it.

486

It's clicked for them.

487

Their community hasn't kind of caught up.

488

Like, how have you

navigated, you know, uh,

489

being kind of, you know, the first,

the first are always the ones who are

490

like, you know, deemed by everyone

else, like the weirdos, you know?

491

And then years later, like after everyone

dies, actually do, like, people are

492

like, oh, actually maybe they kind

of knew what was, what was going on.

493

Yeah.

494

I, I suspect there's a saying in Western

Canada, like there is in the United

495

States, and that is that the pioneers

are the ones who wear arrow shirts.

496

You know, the ones who, who are the ones

that are taking the arrows from, you

497

know, at the, at the vanguard of the push.

498

Um, the, um, I would say to those

practitioners who are slow to the

499

uptake is that, again, all I can

speak is from my own experience,

500

but in my experience, these ultra

affluent Bitcoiners are some of the

501

most interesting people I've ever met.

502

Um, they are.

503

Um, and I, and honestly, I, I, it

sounds like I'm th I'm throwing stones.

504

I don't mean to, but I, I can't really

say the same for a cryp for crypto people.

505

There's a fundamental

difference, uh, in my experience.

506

There's a fundamental difference

between bitcoiners and crypto people.

507

Um, and the Bitcoiners that we've

gotten the chance to work with, um,

508

were attracted to Bitcoin because they

saw it as a sounder form of money.

509

Um, it was a response to the profligate

money printing of the great financial

510

crisis, and, uh, exacerbated under the

COVID policies here in the United States.

511

And they believe that Bitcoin

represents a harder form of money,

512

a more disciplined form of money.

513

And so there is a.

514

There's a stewardship mindset that

comes with a lot of the Bitcoiners

515

that we've had the privilege of

working with, and those people have

516

a very long time horizon for their

wealth and for and for their lives.

517

Frankly, it's not, they didn't get

into Bitcoin because they expected

518

to become sent to millionaires.

519

They got into Bitcoin because it,

it made sense to them and it was it.

520

Something about it

resonated with their ethos.

521

And yeah, the, the economic wealth

came because of what Bitcoin

522

has done in economic terms, but

that wasn't the draw for them.

523

And so these are people who apply a very

similar, um, kind of stewardship minded

524

ethos to every aspect of their lives.

525

And that goes through how they

invest in non Bitcoin investments.

526

So what kind of companies

do they invest in?

527

What kind of causes do they stand behind

when it comes to their investments?

528

They become very intentional and impacts

oriented when it comes to how they

529

select their non Bitcoin investments.

530

They become very.

531

Multi-generational focus when it

comes to what their family is about.

532

You know, how do we wanna raise

our children to think about money

533

and to think about their place in

society and their place in the world?

534

And it's not as a place of privilege,

it's as a place of responsibility.

535

And it's as a place of, um, you

know, creating an environment where

536

our children thrive and our children

flourish to become the best, the best

537

versions of themselves, not the most

privileged versions of themselves.

538

And to a person.

539

Each one of our large bitcoiners is

deeply, deeply philanthropic because

540

they believe that part of their

in investment, that they're part

541

of what they're investing in is to

build a better world for their kids.

542

I mean, they're building

the world that they believe.

543

Ought to exist.

544

And so that often takes place through

philanthropy, through the arts,

545

through um, social empowerment, through

racial equality, gender equality,

546

environmental development, religious

development, things like that.

547

Because these clients realize

I didn't, I didn't go into this

548

to feed my own consumption.

549

I didn't go into this to give my

children the most privileged experience

550

they could, they could possibly have.

551

I went into this because this

is how the world should work.

552

And now they have the ability to

express that more fully through

553

their investments and through their

philanthropy and through their families.

554

I think, I think to add to

that, there, there's maybe two

555

points I'd I'd like to add.

556

Um, you know, the first one around,

you know, the people that might

557

be on the fence, Claire, and,

and going back to the question,

558

I, I would say like the, the

simplest thing would be that.

559

had an argument that, you know, you

560

couldn't get comfortable with this,

but now with the amount of regulatory

561

clarity you've gotten, there is

no argument around whether or not

562

Bitcoin is legitimate, whether or not

you can offer services in Bitcoin.

563

Now you're the organization you're

associated with, or you know your

564

practice as a sole practitioner.

565

You might have a view, you might have

ethical guidelines, or you might have,

566

you know, a framework that may or

may not allow you to engage with it.

567

But generally speaking, you now

have regulatory clarity all the way

568

at the top of the house in the us.

569

So there is absolutely no argument in my

view that you can make as to, you know,

570

why you don't wanna engage with this.

571

And to Matt's point, it

then becomes the personal.

572

Reason as to why you would or

you would not engage with it.

573

Right.

574

So I think, I think to me, that that's,

that's, that's kind of really important.

575

Um, you know, the, the other piece

around, you know, what do you say

576

to, to people that, that, that,

that wanna service the space?

577

You know, I, I mean, I, I still

don't think my mom or my mother

578

really knows what I'm doing.

579

God bless her.

580

Uh, she's about to be 70.

581

Right.

582

Um, I mean, there's a generational

aspect to this, I would argue

583

as well, which, you know, you're

not going to convert everybody.

584

And, and that's also okay.

585

Um.

586

You know, the same, the same reason as

to why as a, you know, early forties

587

young person, I'm drawn to crypto and

maybe have a riskier allocation set

588

in my personal accounts and whatnot.

589

Um, you know, you, you, you, you

tend to find things that resonate.

590

I remember, I mean, I was working

on trading desk in New York City

591

when I bought my first Bitcoin.

592

Everybody around me was

basically telling me I was crazy.

593

594

It wasn't even that early, right?

595

Then I left my golden handcuffs, I

call them like big bank job and you

596

know, joined this company and then

like three, three weeks later, like,

597

you know, basically crypto collapsed.

598

Everybody was like, what did you do?

599

You did, you made a huge mistake, right?

600

Like why, why would you have done this?

601

You put your family at risk and

your earning potential at risk.

602

And um, so, so it is a little bit,

you know, pioneering to some degree,

603

but ultimately to Matt's point,

um, you end up interacting with a

604

lot of really interesting people.

605

But there is no, just

go back to this point.

606

Like there is no longer reasons as to

why you shouldn't engage with this.

607

At least from a regulatory and,

you know, kind of licensing

608

and, and governance construct.

609

You have all the clarity

you need as a practitioner.

610

Let's talk about the

difference between, um.

611

Cryptocurrency and Bitcoin, uh,

and how, you know, how those pieces

612

fit under this larger umbrella

of like, just digital assets.

613

Um, but I wanna be specific

about how we, what, what we get.

614

What I wanna be specific about what I'm

extracting from this because, um, we've,

615

we haven't only just mentioned in this

conversation, in other conversations

616

too, right, like that we look at Bitcoin

differently than other, I'm speaking

617

from bespokes, from a bespoke ones.

618

Um, but this episode, this conversation

is about, um, estate planners being

619

able to say yes to, um, working with

somebody who has significant holdings.

620

And that doesn't matter, right?

621

If it's Bitcoin or another cryptocurrency,

or does it, can you help me understand

622

that the, the difference there?

623

Um, I would say that from a.

624

From a technical legal structuring

perspective, it doesn't matter

625

because the, you know, at the end

of the day, we're talking about

626

digital representations of value.

627

And those representations

of value are bearer assets.

628

Like, like, again, like gold

or cash or something like that,

629

that just doesn't have a title.

630

Um, from a, from an economics, pers

from an economic perspective, and I

631

think from a psychological perspective,

and then we can get into a, like

632

a technology perspective perhaps.

633

I, I, I do think it starts to matter.

634

Um.

635

And again, I, I, I know I'm gonna sound

like a hardcore Bitcoin maximalist,

636

but I've been, I've been in this

637

And I, I've done, I've done the hot lap

of all the crypto stuff that's out there.

638

I started with Bitcoin, did the hot

lap, and kind of came back to Bitcoin.

639

Um, and it really, a lot of it

for me turns on the fact that, um,

640

as volatile as Bitcoin is, other

digital assets are far more volatile.

641

Um, and even more so than that, the vast

majority of the market capitalization

642

of every other crypto asset, including

Ethereum, which is the second largest

643

by market cap, is heavily centralized.

644

So, uh, you have, whether it's Solana or

Ethereum or whatever, they're heavily,

645

the holdings are heavily, heavily

centralized and the networks incentivize.

646

Concentrated centralization of

those assets through the, what's

647

called the staking protocols.

648

You know, the, the idea is that if I've

got a proof of stake asset like Ethereum

649

or Solana or the overwhelming majority of

the crypto assets out there, if I don't

650

transact with my assets, but I pledge

those and I stake them and I lock them

651

up in the protocol, then I get accreted.

652

I, I accrete more tokens

because I have locked them up.

653

Uh, those, those markets in other

digital assets actually benefit from

654

illiquidity, not from liquidity.

655

And I'd say that my final, my final

knock, uh, it's kind of two parts,

656

I suppose about other digital

assets is that, um, because they

657

are so centralized, a handful of.

658

Those concentrated position holders

can unilaterally change the economic

659

performance of those assets.

660

By which, I mean, again, back to Ethereum,

661

few years ago where you had a handful of

dudes and yeah, they were dudes that were

662

sitting around a conference room at some

hotel in, uh, Puerto Rico, where wherever

663

they were, and they changed the economic

structure of Ethereum just by voting.

664

They said no.

665

Instead of it being inflationary,

we're gonna now make it deflationary.

666

We're gonna actually

start making Ethereum.

667

Um, we're gonna, we're gonna make

the issuance rate of Ethereum go down

668

over time instead of go up over time.

669

So you had some people who could

sit around and could, you had a,

670

you had a, a small, um, cadre.

671

Cadre of, um.

672

Decision makers who could change the

fundamental function of an economic,

673

of the economics of Ethereum.

674

It's like that's, that is the absolute

antithesis of decentralization.

675

That is heavy, heavy centralization

and control by a small cadre

676

of, of big bag holders.

677

Solana has had major, uh,

outages throughout its

678

history, and Solana is great.

679

I mean, it's, it's very fast.

680

It's great.

681

It's a, you know, it's a, it's a

robust protocol, but it is heavily

682

centralized and it's, you know,

it's just not, it's not the same.

683

Bitcoin has never been centralized.

684

Once Satoshi Nakamoto released

the software to the wild, anybody

685

who wants to run it can run it.

686

Anybody who wants to compete to.

687

Solve the block, solve for the

block reward in the blockchain.

688

Anybody can do it.

689

Didier could set one up.

690

You could set one up.

691

I could set one up, we could compete

with each other, and we could, we could

692

all be competing for the, the Bitcoins

that come out of the Bitcoin network

693

and all the other assets, every other

crypto asset, with very few exceptions.

694

All of the assets were pre mind at

the very beginning by the issuers of

695

the token sprinkled out to create an

artificial network effect and then

696

capitalized on that network effect.

697

So, um, I mean, I know, I mean, I, I

kind of have become a bitcoin maximalist

698

when it comes to the token economics

because they are fundamentally different.

699

But what changes, if anything, when

putting Solana versus Bitcoin in a trust?

700

In my perspective, it should

be your holding period.

701

Um.

702

We get bespoke, we consider, we

consider Bitcoin to be a real

703

asset, like gold, like real estate,

like an investment portfolio.

704

And so it warrants long-term

structured planning because the

705

idea is most people who hold Bitcoin

706

will probably hold at least some

significant portion of that Bitcoin

707

indefinitely across generations.

708

I don't know that the same thing

is true with Ethereum or Solana

709

or something else like that.

710

Now you could have tens of millions

of dollars worth of those assets,

711

hundreds of millions of dollars worth

of those assets, and you need that

712

kind of structured planning, but Right.

713

I doubt you're gonna be holding

the heavy concentration of

714

those assets 10 years from now.

715

Right.

716

You probably are holding a

significant concentration of

717

Bitcoin 10 years from now.

718

I'd be surprised if you're holding

a significant concentration

719

of Solana 10 years from now.

720

Okay.

721

Didier, I'm, I'm probably saying

some pretty radioactive things here.

722

I don't know, but it's like

that, um, I mean, listen, I, I

723

think as you know, as a service

provider in this space, we tend to,

724

I'm gonna say be relatively agnostic to,

you know, what our clients wanna hold.

725

'cause ultimately it's their decision.

726

Now, there are some overarching

principles around, you know,

727

some of the networks that Tetra

supports and some that we don't.

728

And those tend to be based on, you

know, um, who the underlying actors

729

are around these, these networks, you

know, the jurisdictions they operate in.

730

You know, how are these tokens

or cryptos being used, et cetera.

731

Um, the bottom line is 80% of what

we have in custody is Bitcoin today.

732

Um, and I wouldn't necessarily

represent that that percentage has

733

changed dramatically over the years.

734

And we work with ETF issuers that have

e you know, eth Ethereum, ripple, Solana

735

ETFs, but the concentration and de

aggregation tends to be around Bitcoin.

736

Um, I do think that Matt sent something

here really interesting around like the

737

longevity of the asset class and, and

how to think about the various tokens.

738

I mean, in my short term, in the space

of only a few years, you've already

739

seen tokens rise and fall based on.

740

A series of parameters or

events I'm gonna call, right?

741

So what's popular today doesn't

necessarily mean it's popular tomorrow.

742

And from an estate planning perspective,

you want think really long term.

743

So you know, you might not want

to be exposing yourself to the

744

volatility that some of this

token omics bring to the table.

745

Um, we also see generally as a

practice that people that, um,

746

own proof of stake assets tend to

do a lot more with those assets.

747

So, to Matt's point, whether it

be staking or staking or engaging

748

in decentralized pools for yield

farming, and that opens yourselves up.

749

I think if you purely.

750

Think of an estate planning perspective

to all sorts of risks, right?

751

Because you are exposing your

assets to various protocols

752

and partners and, and all that.

753

So it's, it's probably suboptimal,

I would say, from an estate planning

754

perspective or certainly should,

should be considered that way.

755

I think where I slightly maybe disagree

with Matt is, you know, the underlying

756

layers of technology around these

blockchains have created, in our view

757

real products like stable coins that

have very high usage and, you know,

758

really strong product market fit around

specific use cases, whether it be, you

759

know, global remittances, so sending

money abroad and payments and whatnot.

760

And we're seeing very quick

adoption of, you know, stable coins.

761

Uh, and that's generating

traffic on these, these

762

blockchains or these networks.

763

Uh, and I'm.

764

Candidly, being in the space, I

still don't think I can reconcile

765

the amount of activity on Ethereum

to the underlying price of Ethereum.

766

So, you know, uh, clearly that's

not the, the, the main driver.

767

Um, but the technology itself

I think has created some really

768

interesting products that over

time, that, you know, would excite.

769

You know, the technologists in me in

terms of where this technology's gonna go.

770

Um, but we're really talking about

usage-based product as opposed to

771

something that you are, you know,

basing your wealth planning on on.

772

Right.

773

I'll concede that point.

774

I mean, that's a really great

point that I had overlooked.

775

Yeah, you're exactly right.

776

Um, I was thinking about

it at the base le level.

777

Are you gonna hold salon?

778

Are you gonna hold Ethereum or whatever?

779

As a, as that's the store

value, but you're exactly right.

780

Those platforms that, that we're

talking about here are great platforms

781

for high throughput, high velocity,

large transactions and stable coins.

782

So it's Canadian dollars,

US dollars, euros, whatever.

783

Absolutely.

784

Borderless transactions could

not agree with you more.

785

Um, something that you said, um.

786

I wanna go a little bit deeper on

too is, uh, that, that kinda gets us

787

into the structures question I think

Claire was getting to a little bit ago.

788

Um, and that is that really one, one

of the things I'd like practitioners to

789

understand is that the structures that

we can create around Bitcoin or the

790

digital, digital assets, the structures

are actually agnostic as to the assets.

791

The structures have to be

tailored in specific ways.

792

When you've got complicated assets

like Bitcoin or other crypto

793

assets, um, there's some nuances

that have to go into the structure.

794

But at the end of the day, um, the

structure doesn't care if you own Bitcoin

795

or Ethereum or real estate or equities

or whatever the structures are designed

796

to give you certain legally recognized

outcomes, whether that's, again, tax

797

mitigation, long-term wealth preservation.

798

You know, asset protection,

privacy, all that good stuff.

799

Um, it doesn't matter what the asset

is, we can just do the same stuff with

800

Bitcoin and other digital assets that

we can do with, with regular assets.

801

Okay, so I'm gonna tee up the

topic of the Sovereignty Paradox.

802

Um, for those who are listening and

haven't read, Matt's piece called

803

The Sovereignty Paradox, managing

a Bitcoin legacy, you can download

804

that, uh, white paper on our website.

805

Um, but Matt contemplates this, this

big idea of there's transactional

806

sovereignty and then there's legacy

sovereignty and for practitioners who

807

are, you know, going to be working with.

808

Uh, individuals with significant

holdings in Bitcoin, we are now

809

entering the zone of legacy sovereignty.

810

And, um, yeah.

811

And that's, that's interesting, right?

812

Because that's a new, kind of,

this new mechanism of leg legacy

813

sovereignty and the pieces of that

because, um, qualified custody is

814

a piece of that, so take it away.

815

Yeah.

816

I mean that's, that's

an essential part of it.

817

Um, well, and this, this also shines

a light on some of the conversation

818

Deedee and I were just having about

stable coins because I mean, people,

819

I, I can't imagine people holding tens

of millions or hundreds of millions

820

of dollars worth of stable coins

indefinitely in a trust structure

821

because you're losing purchasing power if

you're just sitting on a fiat currency.

822

And stable coins are just a digital

representation of a fiat currency.

823

Um, so again, whether it's

Canadian dollar, US dollar.

824

Some other currency, your value is

pegged to whatever that currency does.

825

So you're not gonna be sitting

on, um, digital cash, which

826

is what a stable coin is.

827

You're not gonna be sitting on

massive stockpiles of digital

828

cash as part of a legacy.

829

You certainly could if it sits, if

it fits with your investment profile.

830

You could certainly sit on massive

stacks of Ethereum or Solana or

831

Bitcoin or anything else like that

if you believe in its thesis to

832

outpace the, the role of currency

over time from a value perspective.

833

Um, but the sovereignty paradox

framing came to mind as I was really

834

thinking through the conversations

I'd had over the, over my eight years

835

to this point in the Bitcoin space.

836

And that is that, you know, when you read

the Bitcoin white paper, even the title

837

of the white paper itself is a clue of

why it was created in the first place.

838

Satoshi Nakamoto.

839

Wrote the Bitcoin white paper as a

peer-to-peer electronic cash system.

840

It was originally designed

as a proxy for currency.

841

It was originally designed as a medium

of exchange to be used transactionally

842

between, dis between, um, internet

users who are not known to each other,

843

have no reason to trust each other, but

could then transfer value in exchange

844

for goods and services via the internet.

845

That's a problem He solved.

846

The, the issuance rate of Bitcoin, the

hard cap of 21 million Bitcoins plus the,

847

plus the decaying issuance rate where

the having mechanism where the having

848

algorithm kicks in every 210,000 blocks.

849

You have an asset that started

as a medium exchange, but that

850

is, that is hard capped and.

851

Designed to become

increasingly scarce over time.

852

So those two features make it

necessarily prone to increase in

853

currency denominated terms over time

because currency, whether it's Canadian

854

dollar, US dollar, or any other fiat

currency, it is not hard capped.

855

It does not have a programmatic

decaying issuance rate.

856

Currencies are determined or they're

issued by fiat, they're issued as the

857

regulators, the banking authorities decide

to solve certain political problems.

858

Bitcoin doesn't have those types

of constraints on it, so, um.

859

860

much of anything, and it was designed to

buy marijuana over the internet or whether

861

it was designed to pay for a web designer

in koala lampo or something like that.

862

Um, it was designed for a

medium of exchange so that

863

that mindset stuck with people.

864

And then events like the CGO CX hack

or, or the fraud that it was, um, things

865

like the Mount Gox hack, things like FTX.

866

There, there was this e there was this

mantra that, that was pounded in my brain.

867

And DDA has heard it too.

868

It's this not your keys, not your coins.

869

And this notion of if you don't have

unilateral control over your private

870

keys that control the wallet to your

Bitcoin or crypto assets, if you don't

871

control those keys, it's not your Bitcoin.

872

So people said, well, well, I've gotta

really hold my Bitcoin unilaterally and

873

that sovereignty over my private key

material gives me comfort and control.

874

And then Bitcoin continued to

go up, up, up, up, up to, you

875

know, the heights that it is now.

876

And so it went from something that

was designed as a transactional proxy,

877

as a medium exchange to where it has

truly become a, a store of value,

878

unlike anything humanity has ever seen.

879

I mean, there's, there is literally no

other asset in the history of humanity

880

that has gone up in currency denominated

terms like Bitcoin has gone up, especially

881

just within the last seven or eight

years, let alone the last 17 years.

882

Nothing, there's just no comparison.

883

So that mindset of unilateral key

control has stuck with people.

884

Um, but now.

885

We're exercising unilateral sovereign

control, not over our currency

886

or our cash, our medium exchange.

887

We're now trying to exercise

that unilateral single source

888

control over something that is

of generational consequence.

889

Millions upon millions

upon millions of dollars.

890

That construct doesn't scale when

you're dealing with, transact

891

with, um, generational wealth.

892

So when we all, when all we want the

Bitcoin for is to be able to transact with

893

each other, unilateral key control, fine.

894

That's great.

895

That's cool.

896

But when we want tax benefits from

liquidation events, when we want to

897

structure this so it passes on to

the people that we care about in a

898

meaningful way when we want fiat.

899

Denominated benefits from our Bitcoin.

900

We have to have fiat recognized solutions.

901

And that gets us into fiduciary

title controlled, legally recognized,

902

qualified custodial solutions in

order to get those types of outcomes.

903

And so the reading, the Sovereignty

Paradox is only slightly shorter

904

than the monologue I just went down.

905

But, um, it's a, it's a complicated

conversation that we have to have with

906

Bitcoiners because they've stuck with

this idea that if I give, if I transfer

907

my Bitcoin to Tetras custodial vault,

I've lost control over my Bitcoin.

908

And we're helping people elevate their

view of sovereignty such that your

909

sovereignty does not begin and end

with the control to your key material.

910

The sovereignty must expand to being

in control of the totality of your

911

circumstances and bring all that the law.

912

Can bear to create the

outcomes that you want.

913

That's sovereignty and that's

the sovereignty paradox.

914

I, I think, you know, I, it's a, it's

a really interesting question because

915

we, we, uh, I, I, I would argue

face similar challenges as, as Matt

916

highlighted in terms of educating,

you know, potential partners around

917

their capacity to, you know, transfer

their Bitcoin into, into Teras vault.

918

Um, and that, not, not your keys, not

your, your Bitcoin kind of ethos is very

919

prevalent in the space, but it, it makes.

920

You know, kind of future proofing

yourself as, as a problem.

921

I mean, I, you know, I'll

speak about my situation.

922

I, I work in the space.

923

We run obviously at third party

custodian, and I still have a hardware

924

wallet that I keep, I still have,

you know, I would say a, a personal

925

stack of Bitcoin that I have.

926

Um.

927

But the, the framing of that

Bitcoin is, is, is tough, right?

928

Because I think I must have educated

my wife, my gorgeous, smart, very

929

capable, you know, partner of mine

at least half a dozen time on this.

930

Um, I've actually created crypto

steals with my 8-year-old daughter.

931

So she understands that if at some

point she, for whatever reason gets

932

into a safety deposit box or anything

like that, and she sees this, she

933

understands what it is, right?

934

Uh, and also given the nature

of this, it's not something I

935

necessarily want to be writing down.

936

You don't necessarily want to be

writing a step-by-step instruction

937

and even in a will concept, you know,

as a somebody that's still employed,

938

meaning I don't have hundreds of

millions of, of Bitcoin wealth, um,

939

how do you, how do you put that in a.

940

How do you put that with

a third party lawyer?

941

How do you.

942

Maintain that information, right?

943

So there's all these complexities

around maintaining your own

944

private keys that show up.

945

And you know, of course I like to think

that I'm gonna grow old and, and, you

946

know, live a very long time, but you

never know what's around the corner.

947

So you create this, these treasure,

I call them treasure hunts.

948

'cause everybody has their own kind of

version of a treasurer hunt of like, how

949

are you gonna get back to my seed phrase

in the event that something happens to me?

950

Um, and that's really, really suboptimal.

951

That's like, to me is like almost

a kin of like having a stack of

952

cash under your mattress, right?

953

And, and hoping that you know,

when something happens to, you're,

954

my kids don't just throw out

the mattress and don't recognize

955

as there's 10 grand under it.

956

Under underneath, right?

957

Um.

958

So it's, it's, it's problematic

I think in many ways.

959

Uh, and so far the technology, you

know, is, I would say not completely

960

consumer friendly in terms of

safeguarding your own digital assets.

961

Now, some of the third party

platforms that, at least in Canada,

962

I don't know what the practices,

um, but they are introducing that

963

concept of legacy now on platforms.

964

So in the event that something happens

to you a little bit in the same way

965

that you would structure an insurance

policy or something like that, you

966

have, uh, essentially beneficiaries

that you can tie to your accounts.

967

Um.

968

But I, I mean, I can tell you from

an, uh, being an operator in the

969

space, like those assets are pooled.

970

They're not in segregated

frameworks, right?

971

So again, it, you know, it raises

other kind of concern because you're

972

sending Bitcoin into a pool of Bitcoin.

973

So, um, you're not necessarily

maintaining deep Bitcoin itself

974

under proper segregated accounts.

975

So I think there's, there's a lot

around the sovereignty aspect of it,

976

and I think it's an education piece.

977

There's a technology component.

978

As technology gets better, there's

also a maturity of the industry, right?

979

As the industry continues to mature

and people get more comfortable with

980

counterparties and, and players that

have been in this space for, for

981

quite a long time, um, you know, are

likely to get more comfortable to it.

982

But, um, yeah, it's, it's, it's

definitely, it's definitely

983

something that shows up a lot in the.

984

In the areas of, I would say

not only Bitcoiners, I would say

985

all aspects of digital assets.

986

Well, I'd say I'd go one step further,

even DDA and say it's it, that that's,

987

those are issues that are somewhat,

they're idiosyncratic to digital

988

assets, but there is a broader issue of

989

facilitating the mechanical

transfer of an asset from a

990

dead person to a living person.

991

And then there's the, then there

is the issue of transferring a

992

sense of meaning to those assets.

993

So it doesn't matter if we're dealing

with a brokerage account or life

994

insurance or a transfer on death deed

with a piece of real estate or a dead

995

man switch on a piece of, on a Bitcoin

wallet or a recovery phrase or whatever.

996

It's like there, there is the very

practical concern of how do we

997

transfer the control and economic

ownership of any asset to the

998

person who's gonna receive it.

999

Whether it's a spouse, a

partner, kid, whatever.

Um, and Bitcoin has some

idiosyncratic challenges because

of the technical nature of it.

But that problem can be solved.

That problem can be

solved through multisig.

That problem can be

solved through time locks.

That problem can be solved through a

digital treasure map or a paper treasure

map, or steel plates or whatever.

That problem can be solved.

The problem that can't be solved with

technology is transferring a sense of

meaning and purpose so that when your

8-year-old steps into whatever amount

of Bitcoin wealth you leave behind

for her, what does it mean to her?

If it's, if Bitcoin is sitting here at,

um, you know, just south of 70,000, I

don't know what it is right now, but it's

like it's been as high as 125,000 us.

We have high conviction that it's gonna be

there again at some point, if not beyond.

And so, okay, now we're talking

about potentially consequential

levels of a windfall that.

Whether it's a 20-year-old or a

40-year-old or whomever who inherits that

knowing that they're prepared not just

for the technical complexity of managing

the asset, but for what kind of disruption

an economic windfall could bring to them.

Because if that, I mean, as an

estate planning attorney, done this

for two and a half decades now.

Um, I've seen plenty of times when

a young adult, even a middle-aged

adult receives a windfall and there's

no sense of meaning attached to it.

It gets commingled with personal assets.

It's easily squandered, it

gets taken away by a lawsuit.

Divorce happens if things get disruptive

and the money, the wealth is gone.

And so, um.

That's why the estate

planning conversation, I

think, becomes so relevant.

And the message I would have to my

colleagues in the estate planning space,

in the estate planning industry is

wealth in the color of Bitcoin is no

different than wealth in any other color.

It's like if it's equities, if

it's real estate, if it's a family

business, it doesn't really matter.

When you're dealing with the, you

know, when you're dealing with the

transfer of significant economic value,

you have to think through and help

a family embrace passing on a sense

of meaning and a sense of purpose

so that those who receive it are set

up for the highest level of success.

Matt, how does bespoke support

estate planning attorneys?

Can you clarify that?

'cause you're not a practicing attorney.

Yeah.

Well, a lot of it's through education.

Um, we work with a lot of estate planning

attorneys and helping them understand.

And, and maybe demystify some of the

planning, you know, opportunities that

are here, um, for the, because we,

because I'm not a practicing attorney

because bespoke is not a law practice.

Um, but, but because that's how

we, that's where we came from.

We have a firm conviction that

how somebody owns their wealth and

where the wealth actually resides is

every bit as important as what the

assets actually are comprised of.

Because, you know, you can make

the right investment decisions or

the wrong investment decisions.

You can have some economic

gain or some economic loss as

a result of the what to own.

And we think we do the

what to own side very well.

Bitcoin is part of that.

Equities are part of that.

Real estate's part of that.

But that's the what to own, how

to own and where to own deal.

Address this.

The risk of 100% permanent loss.

Because if, if you haven't thought

through or, or planned for success through

inheritance mitigation of tax liability,

um, potential risk of litigation,

then you're facing a hundred percent

loss if something goes wrong, right.

That you can't outcome, you can't

outrun that with a portfolio.

And this is a great segue into the

where to own, because it sounds like if

everything sits inside of a US structure,

you might be, you know, more exposed

to, I mean, well depending on where

you are in the world, uh, more exposed

to, uh, litigation or other risks.

So when does it make sense to

look beyond domestic trusts and

consider international structures?

How does that fit into this larger

solution stack that we've been,

that we've been talking about?

We've talked about the how, the what now?

Let's get to the where.

Yeah.

Well, um.

International cross border planning

is not necessarily for everyone,

um, because there's a lot of

complexity that goes along with it.

There are extra reporting requirements,

there's extra, um, just layers of

complexity that come along with that.

But when you're dealing with generational

wealth, by which I mean probably

wealth in the tens of millions and

certainly hundreds of millions of

dollars, us and or when you're dealing

with families who already have a

global footprint, they've got homes.

Um, in, in one jurisdiction in other

homes abroad, or they've got kids in

one jurisdiction and others abroad,

or a business in one jurisdiction and

another abroad, and or when a family has,

uh, in, in, when a family, especially

in a very litigious country like the

United States, is in a high liability

profession, such as a, you know, you're

a surgeon, maybe you're a spinal surgeon,

a neurosurgeon, an anesthesiologist,

or you're an architect who's building

high rise buildings or something that's

gonna give you, um, a lot of liability

exposure because of your profession.

Um, we believe you should start,

at least within the United

States, you should start shifting

significant parts of your wealth

abroad to take advantage of other

jurisdictions superior planning,

like strategy planning strategies.

As well as, um, to be able to seed

opportunities in other jurisdictions.

And so when we, when we're dealing with

clients in this, in this realm, um, and

all of our clients fit those categories

one way or another, um, we say, okay,

well you may be a practicing physician in

Kentucky just to pick something random.

Um, but you've got a hundred million

dollars worth of total wealth and

you know your practice is gonna

generate some liability for you.

Um, it probably makes sense for you to

carve up about 20 million bucks or so

if your wealth and put that in some type

of heavily protected offshore structure.

It's the rainy day fund, so

in the event you get sued.

Because somebody makes

a malpractice claim.

Maybe you're guilty, maybe you're not

guilty, maybe you were or were not

negligent, but let, they just give you a

hard time because of your deep pockets.

Would it, would it not be appropriate

to have a significant rainy day fund

available for your defense and for

your, to provide for your family

while everything else is burning down

around you here in the United States?

So for a lot of people, especially

people with Bitcoin, they say,

well, what are my options?

Very often we'll have them

combine a couple of strategies.

Um, we believe that the Cook

Islands is the most secure,

private, robust jurisdiction in

the world to insulate assets from

the claims of outside creditors.

And so we'll often pair, um, a

Cook Islands irrevocable trust.

We have to have a trustee in

the Cook Islands, uh, to serve

as the trustee of that trust.

And then.

Our physician doctor, our physician client

in Kentucky would put some assets in an

account owned by that Cook Islands Trust.

Well, what if the 20 million bucks, the

doctor wants to put Offshore's Bitcoin?

Well, it's difficult to get a trustee

to feel comfortable with understanding

what Bitcoin is and then establishing a

custodial relationship with a qualified

custodian like Tetra and say, okay,

well I'm just gonna hold title to

the trust over this Bitcoin vault.

I mean, even, even if the trustee

is comfortable doing that, our

doctor client in Kentucky may not

be entirely comfortable with that.

Who are these dudes in Canada?

Who are these dudes in the Cook Islands?

So, um, very often what we will help

clients do is let's create, um, maybe

an intermediary level of strategy.

Uh, so maybe instead of putting the

Bitcoin into the trust directly,

maybe we create a different type

of entity using a Nevus limited

liability company, for example.

And we'll onboard that Nevus

Limited liability company with Tetra

to then establish the custodial

relationship at the LLC level client.

It can have a higher level of control and

visibility to the vault at Tetra because

client can still serve as the investment

manager of the limited liability company.

In that capacity, the client

gets to see the vault.

The client gets to determine

the investment mandate, and so

then client establishes this

Nevus Limited liability company.

And then the LLC onboards with

Tetra client then moves the Bitcoin

first, a test transaction, then

the secondary transaction to fully

fund the limited liability company.

Okay, so now day one client

owns a Nevus Limited liability

company with a Tetra account.

So then the client turns around

and says, okay, well great.