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1 Episode 142: Anita Motwani on Borrowing and Lending on the Blockchain. Welcome to Crypto Token Talk, a Crypto 101 Podcast exploring how Blockchain applications like BitCoin, Ethereum, and other crypto assets could change the world. Learn from Blockchain experts, thought leaders, and founders of some of the most innovative companies, and world changing ideas of our time. I'm your host Kelly Weaver, CEO of Melrose PR, a leading Blockchain communications agency. Thanks for joining us today. Today I'm here with Anita Motwani, who is the Head of Business Development for North America for Celsius. Welcome Anita. Thank you. So excited to have you here on the show. Can you tell us a little bit about who you are, and your background? Yeah, sure. I have been... well my background started on Wall Street many, many years ago. I was in sales, I've done sales, I've done trading, both in the equities and bonds and all of that stuff back in the day. I took a little time off to do the family thing, have kids and all that. After that I came into... I was living in San Francisco so I decided to do the Silicon Valley thing, which was working with companies in technology and clean technology actually. So I either took roles as business development or partnership within companies or I just advised them and I also helped with fundraising. My whole thing with my, is still, actually my network and I leverage the VC community and all the people I knew there to help early stage companies raise money. So that was initially in just the, I guess what we would call, regular tech or oldfashioned VC-backed companies. I switched over just a little over a year ago actually, in July of last year, a friend of mine asked me if I had started looking at cryptocurrency and I was like, "No way, I'm not getting into that. No, I don't know anything about it. I'm a former trader." I didn't really wanna look at what was... so the potential was there because I didn't really wanna know and then when she told me what the potential was I jumped right in.

2 So I started by trading coins myself and then sure enough a number of companies started finding out that I was getting involved in the Crypto/Blockchain space and so I was advising a bunch of ICOs trying to help them raise money, pretty much trying to help them with the fundraise. Then along the way I met- I have a quick question for you. Yeah, sure. How did you start in trading these coins? Like how did... obviously you have this background in trading in general so you - Yeah, that's a great question.... have probably more experience than others, but I'm curious. I'm always curious, how did you start to dabble? How did that... what did that look like? That's a really good question. To be honest with you, it's very much more complicated than trying to trade stocks because setting up the account for Crypto and learning where are the right places to go, what exchange should I be on, those were things that I was completely clueless about versus just setting up an E-trade account to go trade the regular stock market. So I actually had a friend, my friend Amy who introduced to this whole space, had done a massive research spreadsheet and sent it to me. So I read as much as I could with all the different links that she had sent, and you know I started pretty basic go to Coinbase, open an account, that's not too difficult. If you wanted to buy... they only at the time had two, or three maybe, coins you could buy on their exchange. There might be four now, I haven't been on there in a while, but- Yeah, I think it's four. Yeah, so then I was like oh now I wanna buy Ripple and NEO or whatever and so that required open accounts at different exchanges. That is what I think is a little bit of the... that whole piece that can be disruptive if you will, is how quickly you can get on an exchange and how difficult it is, I think that would be prohibitive to a lot of people because it's all the KYC, taking pictures of you and your ID and then the whole thing. Then in some cases, waiting. I mean for Kraken I think I waited eight weeks to get on it just so I could buy Riffle.

3 Yeah, so I definitely would look up as many articles, Medium pieces, whatever it is there's a great piece that a guy I know... I'm trying to remember his last name. [Dennis 00:04:21]. Dennis, forgot his last name, but he wrote a piece on how to open a wallet, an ERC-20 wallet on myetherwallet.com. It was that specific and I said "Okay that's where I'm gonna go because there's a Medium piece on it," so I opened a wallet just by virtue of reading his Medium piece. And he does walk you through it and I'm sure there are people that walk you through other things as well, it's just knowing where to get the information. But yeah, not the easiest thing in the world for sure. Then just in terms of trading it, I didn't trade it on a daily basis like some people do, I was more sort of buy, hold, buy a little more, hold a little longer, but I joined a group that meets actually, I don't know if they're still meeting. They used to meet every Monday in this sort of interesting, whatever you call it, basement in a building of San Francisco and they used to talk about trading strategies. That was a little too complicated for me, that was a little over my head. But yeah I'm sure there's a lot of information on that as well. So then you started advising and getting more involved in the startups and all of that is what you were saying? I don't mean to cut you off, but I'm always curious about what that looks like because it's not as intuitive as people think. Yeah oh no, that's fine yeah. You just... you know, in my case they were wanting me to help them raise money for their ICO, so the initial coin offering, which is looking for people who are large holders or have some coin that they would want to invest into their project. So obviously that's different than a VC who's coming in and putting in millions of dollars. So it's a different set of people, to be honest with you it was a little new for me. I was like, "Whoa I just got into this space." It's not the usual characters that you see getting into a startup. Nowadays I think we are seeing the regular old people, the big names that we all have heard about, Kleiner Perkins whatever, okay not Kleiner Perkins, but Andreessen Horowitz, et cetera, investing in companies like this. I would tell you the thing about Crypto or Blockchain that changes so quickly... I mean it changes so quickly, it iterates very fast so the difference between when my company Celsius raised money doing an ICO and now is significantly different. Things have already changed and we just did it in March. So what people do is they really use LinkedIn. The minute they see anything about Blockchain or Crypto in your title, they will find you. So I actually met a number of companies that way that wanted me to help them. I had some people that I knew in the

4 Blockchain community who had said oh if you need help with such and such just go find Anita, right people I didn't even know were telling companies to ask me to help them with their fundraise. So the other thing about this whole space is the community is still pretty small and we all pretty much know each other, I mean not everyone obviously, but there's definitely the group that when you go out to the events you see over and over and over and so that's how people get to know you because we're still a pretty tight community. So then how did Celsius come to be and tell us about that. So I ended up going to a conference in New York. I think it was one of the first conferences on Blockchain in New York which was in September, September of last year. It wasn't that long ago. I went to the cocktail party preceding the event and I walked in and to be totally honest with you, I was looking around the room to see if there was anyone of my age who I could talk to because most everyone was half my age. There was Alex Mashinsky and Daniel Leon who both are the two... Alex is the CEO and Daniel is the COO of Celsius. So we just got to talking and they told me about their project which is, Celsius is borrowing and lending on the Blockchain, so we will pay you if you put your coins on our platform if we lend out against it. So that's something that banks do all day long, if you hold Starbucks in your Goldman Sachs account they can go and lend it out to a short seller and they make money on both sides, but they don't pay you. So in our case, we are saying give us your Bitcoin, let us hold it for you because if you put it in Coinspace it makes nothing, it does nothing. It just doesn't earn any interest, just kind of sits there. We're saying we'll pay you interest if we can lend those coins out to someone else who needs to borrow them. In that case, it would mostly be a hedge fund. So anyways, so sorry I went off into the business model a little bit, but that... I met Alex and Daniel at that event and then we stayed in touch. I kind of loosely advised them, I wasn't officially really advising them. I attended some events with them and then I would say in January of this year Alex called me up and said, "Hey you know what, we really need more people, you're great, you've already been helping us. I need someone to covert the west coast. Would you work for Celsius?" So that's basically how it started.

5 Love it and I love this concept. Can you delve a little bit further into that? So what that means for consumers who hold crypto. Yeah, right so it's sort of like a basic piece of model of what we're trying to do is really... well the really underlying thing we're trying to do is get more and more people, and if you ask Alex he wants to get the next 100 million people into Crypto. What does that mean? That means giving them tools that makes it easier. Kids should be able to do this, grandmas should be able to do this. But also giving them incentives. So in this case, we're saying, like I said, you know hey would you like to make some interest on your coin holdings instead of just kind of hanging onto it and having it not do anything and then- Well do a whole lot, but it goes up and down a whole lot right? Well it goes up and down, right, but you can also, while it's doing that up and down which it's gonna do, it's gonna keep doing, we can also make sure you earn interest. We pay that interest in the form of our token. So our token, which is the CEO stuff, is how the interest gets paid. The other thing you can do, we're sort of working with companies like bigger companies right now like ICOs, companies that recently raised a lot of money, let's say 50 million like we did. They have all this crypto now, they have 25 million in Bitcoin and 25 million in Ethereum, let's say. So in today's world, you still need cash to operate, you still need dollars, or whatever currency you're working with so we're offering loans against that crypto. So let's say you raised 100 million in Ethereum and you need some cash, like hey I need $5 million in cash, it would take part of that Ethereum as collateral and then give you the cash. Then you can operate and borrow it for a year, whatever, the interest rates are at 9%- And you pay it back with interest or how? Yeah so the interest rate starts at 9. Every deal will be different but it starts at 9%, but we charge the borrower to keep the dollars and then they have money to operate. So how does it work if the price of Ether for example goes from $500 when the borrowing happened to... Yeah and then if it's lower-

6 ... A thousand or 250 for example? Yeah if it goes down then you either have to give us more Ether to get the collateral number back up, if it goes back up then we prorate the interest. So sorry if it goes up above where Ether was we'll prorate the interest so you won't pay as much interest. So that's how it works. Interesting. Do you do that for individuals too or is that just an offering for large companies? Or companies- Well that's the idea. That is the idea to eventually have it work for, as we call, the retail sector which is individuals because really Celsius was built for them, for the retail side. We just launched the platform so we're starting with the institutions just to get it going, but no eventually everything will be automated, it should be pretty easy to be able to get a loan on there. I think that's fascinating because when you think about traditional assets, like let's say you wanna buy a house or something, you may not wanna let go of your crypto but you may wanna be able to do that and so you may need a cash loan. Yeah, and by the way, if you sell your crypto it's a capital gain too. Right, yeah can you explain benefits- So you push that odd. Well basically you're just avoiding that [inaudible 00:13:01] because... yeah you're right you could, you now okay we raised all this money or raised all this crypto and here we have all this Ethereum and now we have to go sell it. What is capital gains now? I don't know 30%. I don't know what- Well in California it's very high, yeah, close to 40. It's very high, yeah. So you're just avoiding that hit and instead you can borrow, like I said starting at 9%, there's a pretty big difference in what you- Right and people will... I mean 9% might seem high as an interest rate, but people hold crypto with ironclad fists because they don't wanna let go of it for multiple-

7 Right exactly, and by the way, it actually is lower right now than any of our competitors. I don't actually know what their numbers are, but as far as... we have a morning meeting every day and we're still offering the lowest rates per loan and we also can do it. In some cases, some of our competitors are still having a hard time getting the cash to be able to loan out. So yeah, so that's the situation there. Yeah if you look at what a regular bank charges you. I don't know what... what does it cost for a loan now? About 20% or 19% or- Yeah I mean so. Well yeah. Yeah for mortgages it's like almost 5 to start out now. Yeah right. But that's different, obviously. But then will you explain this consumer offering that you have today that is... basically how that works logistically where I could give you Bitcoin and I would earn interest in Celsius, do you guys take custody of that? Do I send it to an address? Or how does that work? Yeah, you send it to our wallet address which is actually... we're not the custodian, we have somebody else doing it. We have a partner doing that who's all set up for that so I know there's a lot of questions abut security and et cetera, et cetera, insurance, you know that sort of stuff. So then we would just hold onto it in this wallet, or what the best case scenario is, to earn the interest we're actually lending it out to somebody who, like for instance a hedge fund and, as I was saying, okay we don't believe in the price of Bitcoin so we want to short sell the Bitcoin. So that's what they're doing. So we would take your coins and lend them to the short seller and so then we charge them like, let's just say 9%, we charge them 9%, pay you 5%, the difference in between is what Celsius makes from those offers. Then what happens if I want my Bitcoin back? Well if we don't get it back from the short seller we have to go out and buy it. Okay and is there any requirements about how long you have to store it in order to receive interest and how often is interest calculated and things like that? Right now with... I mean the retail part hasn't quite kicked off yet, but no. I think there's no minimum or maximum, but the interest rate is obviously annualized so the 5% is annual and yeah so you just prorate it.

8 I love it. These are two really important offerings I think for people because it incentivizes to hold and then also gives options for those who want to hold but need cash available right away. So it's solving two different problems, really cool. Yeah, but you know one of our biggest themes is HODL. Which I don't know if you've heard the term yet. Hold on for dear life. We want people to HODL their crypto, yeah. Exactly, exactly. I'm a big proponent of that as well. Then I love, you said Alex's philosophy is to get the next 100 million users into crypto. What else do you think it's gonna take to get there and what else is Celsius potentially providing to get us closer to that? That's a good question. So I have personally been involved with, like I said, getting out there meeting the community, seeing what's going on because we don't believe that this is gonna happen by ourselves at all. We believe in the Keiretsu model, if you will, the Japanese Keiretsu model which is a bunch of companies doing this together. So one company that we're looking to partner with, for instance, is I don't know if you know the singer Akon, but he is, I think he's technically known as a rapper. So I was at his event last night for a launch party for his AKoin which is helping to bring balance to the current currency. He wants to bring one giant currency into Africa because there's so much currency fluctuation within all the countries there. He's already been doing a lot for that continent in terms of bringing power, jobs, financial inclusion, and all that. If you think about where "the next 100 million people" are, right, the next billion are in Africa. I believe 70% of that population is under the age of 25. Every one of those people, they all have phones. They prioritize their mobile phones over paying rent. So to be able to somehow get into that, tap into that resource, I think is really going to be key. So yeah I was there last night and I was here in LA to support that project. But [crosstalk 00:18:19]- Yeah, I agree I think the developing countries is where we're gonna see the fastest adoption because there's such a fervor for technology and there's no barrier there. They love smartphones and use them all the time. They need it.

9 Yup. They need it. We don't necessarily need another currency here, yet right. At some point maybe the dollar will go away, but it's not happening in the next 15 years. But there, even countries like Venezuela where all the- Argentina, yeah.... destabilized currency. They don't even have banks there, bank accounts anymore. So yeah, so that's sort of the idea here and I think that what I love about Blockchain is, the other piece I love about it, is it's not just... every single company isn't just in San Francisco like all the tech companies. I live in San Francisco and I'm frankly tired of all the people moving there because they thought they had to have their headquarters in San Francisco. Blockchain is so international, it's everywhere. You can be anywhere, you can domicile your country and other places and I think that just brings more awareness. Hopefully that will get more people to get into crypto. I think places like South Korea area already... I'm pretty sure it's like two-thirds of that country, use crypto. Wow. That's incredible. Yeah, so what are they doing? I think we should all sort of emulate what's going on there. But yeah so it's definitely working together with other companies where forming partnerships and looking to see who wants to join us in growing the entire space frankly. Yeah so what types of business partnerships are you looking for, actively? Well you know, right now we're just sort of looking at companies, like there's one helping people get the credit rating that wouldn't normally be able to get a credit rating based on other factors, like their social media. So let's say there's the farmer in the Philippines. He's like, "I don't have a bank account and I don't know how to get credit," these new technologies are figuring out ways to get them a rating that you probably obviously can't use at a regular bank, but that's the point. We don't want you to go to a regular bank, we want you to come to companies like ours and start setting up a system that way. Then the one I think I mentioned already was Akon and AKoin and getting the impact piece. Just other companies sort of looking at how we can disrupt banking maybe from different angles and the whole financial sector, but yeah and sometimes we just

10 don't know. Sometimes companies just come up out of the blue and we're like oh that sounds like a good plan. There's some companies we'd like to partner with who do have access to a lot of other whatever, other ICOs or users of their platform who need loans. So the idea is hey we get asked all the time can you give us a loan. Then what they would do is then put a little Celsius logo somewhere on their platform. It could be an exchange, it could be another wallet, but we definitely have had companies asking us how can we partner because we get these requests all the time and that's not our business. Then we help to bring users to their exchange or whatever. Love it, very symbiotic. Yeah. So I guess in conclusion, I'm curious what resources, you mentioned a lot in the very beginning, that you recommend to people who are looking to get started if you have any favorite recommendations that you might have or places that you like to read or things like that. I would definitely go to Medium. I think you can just put in Blockchain and Crypto and you can find... if you even write in Blockchain 101 you'll probably find a good article on it. What else do I use? There's a couple different specific coin media sources. I think Cointelegraph is a big one, what's the one, I'm forgetting the name but just now. Bitcoin News is one. In general, I think Medium is probably the best. I think you could go to Reddit as well and find some interesting stuff and yeah or just Google, just Google it. This friend of mine, I think when she started doing the research, and she was considered early by the way, which was like January of She just started looking around. I think if you look also, I'm not sure how you would find these groups, but I go on to a couple different groups on Facebook where it's all Blockchain community, crypto community. So like for instance, one group I belong to is called the advanced crypto asset trading group. So my guess is if you stuck crypto or Blockchain into the Facebook search field you'd get some interesting groups that are... yeah because some of them are closed and you have to be invited, but some of them are definitely open and at this point I think I belong to like 10 different groups on Facebook and that's been very helpful. Then once you get in to even one or two of these groups, people... you'll start to see a community build there as well. So now when I get asked to become

11 friends with someone on Facebook, it's generally someone in my community. That, as silly as that might sound, Facebook's been a great resource for that too because all these people are posting some really interesting information. So then once you start getting into that community I think it becomes easier and easier... yeah. Fantastic. Well thank you so much and how can people get in touch with you or keep up to date with what you're up to? Well they can find me on LinkedIn or you know I'm happy to ever answer any questions if... I think you have my address I don't know. Yeah we can put that at the show notes as well. Yeah and then yeah that's pretty good. Did I say LinkedIn already? Yes you did. Yes. We can put your LinkedIn in there as well. Yeah for sure. Well thank you so much Anita. Thank you. Thank you, Kelly. That's all for today's episode of Crypto Token Talk. To learn more about Blockchain and keep up to date with this fast-paced industry, subscribe at cryptotokentalk.io where you can also find today's show notes. If you have suggestions for topics or guests please drop me a line of Twitter at Crypto Kelly or you can follow the show on Twitter at CryptoTokenTalk. If you enjoy this show, please rate and review it on itunes and share it with family, friends, and colleagues who want to stay up to date on how Blockchain technology is changing the world. Thanks for listening. This podcast is for entertainment and informational purposes only and does not constitute financial or investment advice of any kind. Cryptocurrencies are an extremely volatile and risky investment. You should not make any decision

12 financial, investment, trading, or otherwise based on any of the information presented in this podcast without undertaking independent due diligence. Anyone wishing to invest should seek his or her own independent financial advisor.