Financial leader’s outlook - Navigating the current macro environment with OpenSea, Marathon & Grayscale
The recent Crypto Finance Forum brings together some of the brightest minds in the industry to discuss the current state of crypto finance.
The panel, moderated by Antoine Scalia, Founder & CEO of Cryptio, featured esteemed speakers: Yvonne Wiryadinata, VP of Accounting at OpenSea; Salman Khan, CFO of Marathon Digital Holdings; and Edward McGee, CFO of Grayscale.
In this blog, we'll delve into the insights shared by these financial leaders as they discuss their backgrounds, journeys in the crypto space, assembling financial teams, and the evolving landscape of audits, technology stacks, and the future of the crypto industry.
Building financial leadership in the crypto space
Yvonne Wiryadinata began her career as a typical auditor at one of the Big 4 firms, gaining valuable experience in auditing and capital markets. She later joined Facebook (now Meta) in its early days, where she was involved in Project Libra and the Diem Association, working on financial inclusion and banking. Yvonne's journey eventually led her to OpenSea, where she played a crucial role in building financial processes from the ground up.
Yvonne highlighted the audacious and disruptive nature of the crypto industry, acknowledging the challenges it poses to financial professionals and leaders.
"I think crypto is not for anyone. It's not for the faint-hearted. So for all of you guys here, kudos. I know how it is. It's been crazy."
Salman Khan's career began in public accounting, where he worked on various industries and gained extensive consulting and advisory experience. He later transitioned to the oil and gas industry, leading M&A strategy and overseeing significant transactions. His journey eventually brought him to Marathon Digital Holdings, a Bitcoin mining company, where he found a unique blend of financial and business challenges.
Salman emphasized the importance of building a strong and adaptable team in the fast-paced crypto industry.
"It's not for the faint-hearted. You will not survive in the industry otherwise."
Edward McGee's career kicked off at a Big 4 accounting firm, where he worked on the IPO of a publicly traded asset manager. He then moved to Goldman Sachs, focusing on market infrastructure and structured finance. His journey led him to Grayscale, where he embraced the world of digital assets and smart contracts. He shared his excitement for working with a team dedicated to decentralized ledger technology and the various use cases it presents.
“Fortunately, Grayscale was in a position where they needed technical accounting, guidance, control and risk management from an asset manager perspective. And I was really fortunate to get that opportunity that led me to the space. And from there it has just been an incredible ride, but a humbling one.”
Assembling financial teams in the crypto space - mindset over skill
Edward emphasized the importance of mindset over skill when building a finance team in the crypto industry. While technical skills are essential, the ability to approach problems with a solution-oriented mindset is even more critical. He believes that finding professionals who can adapt, collaborate, and find solutions is vital in this rapidly evolving landscape.
"We need individuals who can not only navigate the complex technicalities of the crypto space but also bring a problem-solving mindset. It's crucial in this fast-paced environment.”
Salman Khan echoed this sentiment, emphasizing the importance of personality fit within the organization. He stressed the need for mutual respect among team members, regardless of their roles. In a volatile industry like crypto, the ability to lean on each other and collaborate is crucial.
"Collaboration and mutual respect are non-negotiable. We need a team that can work harmoniously, especially given the rapid changes we face."
Yvonne Wiryadinata added that a growth mindset, curiosity, and a willingness to challenge the status quo are essential qualities to look for in team members. In a space where doing more with less is often required, she values team members who can be versatile and pivot when necessary.
"We need team members who are adaptable, curious, and willing to push the boundaries. Flexibility is key in the crypto space.”
Navigating challenges in the crypto finance industry
Adapting to the market
Edward McGee discussed the challenges that Grayscale faced in the crypto market. The regional banking crisis and low crypto volumes were significant pain points. To mitigate these challenges, the company had to reevaluate its relationships with third-party service providers and monitor their financial stability closely. The rapidly changing nature of the industry required constant adaptation.
"Adaptation is the name of the game. The crypto market is dynamic, and we must be prepared to pivot and reassess our strategies.”
The evolution of audits
The evolution of the audit process was a topic of discussion. Yvonne shared her experience at OpenSea, emphasizing the auditor's focus on the existence and ownership of digital assets. She discussed the importance of creating custodian accounts with third parties to enhance controls and segregation of duties.
"Our audits now delve deep into digital assets. We've implemented controls and partnerships to ensure the integrity of ownership.”
Edward points out that audits are not new in the crypto space. However, the landscape has evolved, and audits now require a deep understanding of the digital asset industry. He noted that the biggest change was the need for management to demonstrate control and risk management processes to auditors. The level of oversight of third-party service providers has also increased.
"Audits are now a comprehensive examination of our processes and controls. The bar has been raised for transparency.”
Salman mentioned the importance of building a strong relationship with auditors and leveraging their expertise not only for audits but also for consensus-building on accounting developments.
"Our relationship with auditors goes beyond mere compliance. We rely on their insights to navigate the evolving accounting landscape.”
The role of technology in crypto finance
The tech stack's maturity
The technology has been well-developed on the tax and custodian front. However, there is room for improvement in risk management, portfolio management, and reporting. The technology stack needs to catch up with the unique characteristics of digital assets, especially when it comes to valuation and risk management.
"While our tech stack is robust in some areas, there's still work to be done, especially in risk and portfolio management. The industry is maturing, and so is our tech.”
Salman underlines the importance of efficiency and control automation within the CFO organization. He acknowledged that technology is still evolving in the industry and highlighted the need for software tools to adapt to changing guidance and industry nuances.
"Efficiency is critical, and automation is our ally. We're adapting our technology to stay ahead of the curve.”
Yvonne mentions the challenges of relying on third-party software in a dynamic industry. It's important to stay agile and find solutions that can adapt to changes. Building proprietary software for specific needs is a path OpenSea is exploring.
"In an ever-changing environment, we're thinking about proprietary software that can flex with us. Staying adaptable is key.”
The future of crypto finance
The panelists also share their thoughts on the future of the crypto finance industry. They were unanimous in their optimism, recognizing the opportunities and potential for growth in the crypto space.
"The future of crypto finance is bright. There's no turning back now. As the technology and regulations continue to evolve, we'll see more and more traditional institutions getting involved in crypto.”
On the other hand, Salman notes the increasing acceptance of digital assets and predicts a future where Bitcoin and other cryptocurrencies become an integral part of the financial system.
"We're already seeing institutional adoption. Crypto is here to stay, and it will play a pivotal role in the future of finance.”
Edward shares his enthusiasm for the continued integration of digital assets into traditional finance. He predicts a future where decentralized ledger technology becomes a fundamental building block for financial systems.
"The future is decentralized, and digital assets will play an integral role. We're building the infrastructure for what's next.”
The financial leader’s outlook panel emphasizes the importance of mindset over skill when building financial teams and the need for adaptability and collaboration in the fast-paced crypto industry. The challenges of audits and the evolving technology stack were also discussed, with a shared sense of optimism regarding the future of the crypto finance industry. As the industry continues to evolve, the experiences and perspectives of these financial leaders will be instrumental in shaping the financial landscape of tomorrow.