americans hoping to save for retirement. i believe vanguard has publicly come out and said we have to walk about -- rep. talib: i am reclaiming my time. the hong kong stock market imposes a 0.2% tax on transactions as a result and sees literal high-frequency trading, but this has not stopped the hong kong stock market from becoming the third largest in the world after new york and london. just to be clear, let's not gaslight the american people. y'all be fine with the tax. and it is fair, because our folks are tired of bailing you out when you screw up and gamble with retirement funds, and that is exactly what happens every moment. the reason why we are having this hearing is that sometimes you are irresponsible and it is set up in a way to help only the wealthy and leaves people like my community here with this large income inequality i feel

never guess the bailout it deserves. thank you. i yield. chair waters: thank you very much. >> i appreciate this opportunity for this hearing to get detailed information and to gather the facts as to what happened over the course of these transactions. so, let me start by saying -- and i saw that members on both sides of the aisle are interested in this question. the core question i'm going to be asking is what did the customers know, what did the users know, and when did they know it? that is the theme of what i want to ask. because i believe if we understand what happened and what they knew and what they did not, we are going to be able to prevent some of the harm in the future. so let's go to the narrative. mr. tenev, i want to take a look at your page nine.

you said that at approximately 5:11 a.m., robinhood securities received an automated notice saying that you had a deposit deficit of approximately $3 billion. you then said between 6:30 and 7:30 eastern standard time, robinhood decided to impose the trading restrictions, meaning no more purchases of gamestop. and you said in your testimony in conversations early that morning, you notified nsbc of your intention. in that time period from 5:11 until the time you are having the conversation, what did you tell your users? what notice did they have? mr. tenev: thank you. i believe during that time period, shortly after the restrictions of purchasing of these relevant securities were made, we communicated to our customers that these securities

would be restricted from purchasing, and then subsequent, we issued communications on social media explaining the reason being enhanced deposit requirements due to high volatility. rep. dean: i am going to ask you to be much more specific. in your text you wrote you offered three different ways of notification. you said first, the notification to your customers is what they agreed to in their customer opening agreement. that was your first backstop, which who knows what that boilerplate meant or when customers or users agreed to it. two, you said they were notified two days later by sec alerts. and we know what that alert was, it was quite general. much more vague. and number three, you said you also list a more ambiguous mention of targeted messages to customers. when did you specifically send your customers an alert?

this is what we have had to do because we were short capital. when did you do that? what time? what is the clock? mr. tenev: i believe that that happened at several different points in time. there was a blog post published in the afternoon, pacific time. rep. dean: what time? mr. tenev: i don't recall the specific time. rep. dean: would it be after the sec notice? it seems to me you did not notify your customers for at least two days. he relied on the sec notice two days later. mr. tenev: that is an accurate. customers were notified several times on that day. and they were notified of other restrictions as they happened prior to january 28 as well. rep. dean: but you don't say with those notifications were in your testimony. what did you notify them? specifically, what would i as a user have heard from you immediately upon imposing the

restrictions? rep. dean: immediately upon imposing the restrictions, customers would have received communications saying that they would be prevented from opening further positions in the relevant securities. later on in the day on january 28, around early afternoon pacific time, we published a blog post that explains the decision to restrict these securities was due to collateral requirements at clearinghouse houses not upon the direction of hedge funds. rep. dean: let me interrupt you there. you admitted to making mistakes. specifically what mistakes did you make? mr. tenev: i -- i -- i admit to always improving. certainly we are not going to be public. we are not going to be perfect. and we want to improve and make

sure we don't make the same mistakes twice. rep. dean: what were those mistakes? that is what we are here to learn about. mr. tenev: um. thank you for the question. it's an important question. on thursday we did restrict the buying of securities. on friday we imposed position limits, which i believe was a much better long-term solution, one that will have in the future, if anything like this happens again. we also raised $1.3 billion in capital. rep. dean: thank you. i yield back. chair waters: thank you very much. with that we will goto alexandria ocasio-cortez. rep. ocasio-cortez: robinhood is

a track record of failure to account for your own internal risks. you have previously tried to blame clearinghouses for your need and scramble to raise $3.4 billion in a matter of days. but you have also blamed a lack of industrywide real-time settlement, or rather, a lack of that settlement to trades. but robinhood's requirements for margin have long been far more lax than other brokerages for a long time. in december you bragged about having some of the most competitive rates in the industry. this is evidenced by your recent decision to raise those requirements. would robinhood have prohibited its customers -- when robinhood permitted their customers, other brokerages would have just adjusted the narrative -- given robinhood's track record, is it possible the issue is not clearinghouses but the fact you

did not manage her own book, or failed to appropriately manage your own margin rules, or failed to manage her own internal risks? mr. tenev: thank you for this question. let me address the margin point because i think this is an important one that has been under discussed. in december when we lowered our margin rates to 2.5%, one of the details i think was missed was other brokerages have tiered rates where wealthier customers pay much lower rates than lower network customers. so you will have someone who has $10,000 paying 10% for margin, whereas someone with $1 million is 2%. so our approach was give everyone a uniform rate so that wealthier customers are not advantaged with lower rates than lower income customers. i think that is a unique approach in our industry. rep. ocasio-cortez: i have to apologize, i have to reclaim my

time for questioning. as many of my colleagues have also pointed out, robinhood generates much of its revenue from the payment for order flow arrangements with market makers like citadel. as well as to sigma and virtue. the sec highlighted ways the payment for order flow created a quote, potential conflict of interest with a broker's duty of best execution. and one of the ideas the commission floated in 2016 for addressing these conflicts of interest was to require brokers pass on the payments of eightn order flow -- one of colleagues earlier said that robinhood owed its customers are more than an apology, and i agree with him. i believe the decisions made by you and your company have harmed your customers. would you be willing to commit today to voluntarily pass on the proceeds of the payment for

order flow to robinhood customers? mr. tenev: congresswoman, i appreciate that question. when the statement you referred to was made, i believe 2015 or 2016, it was before robinhood forced the entire industry to drop commission and replicate our business model. rep. ocasio-cortez: i should take that as a no, you are not willing to pass on the proceeds of payment for order flow to your customers? mr. tenev: when the other brokers dropped rep. ocasio-cortez: i am talking about today, right now. mr. tenev: payment for order flow allows for commission-free trading in the context of trading commission. it's a much larger source revenue. rep. ocasio-cortez: i apologize. i don't want to be rude, i just have limited time. but removing the revenues you make from the payment for order flow would cause the removal of free commissions.

doesn't that mean that treating on robinhood is not free to begin with? because you are just hiding the cost in terms of potential poor execution, or the cost of lost rebates to your customers. mr. tenev: certainly, robinhood is a for-profit business, and needs to generate some revenue to pay for the cost of running this business. people were initially skeptical that the model, even with payment for order flow would work, when you removed commissions. i think we have proven that otherwise by making this the standard model by which brokerages operate now. rep. ocasio-cortez: i see. i have to move on quickly. i have a timeline question here for mr. plotkin. clearly your testimony today was -- hello? your testimony today was that melvin capital had not engaged

-- i'm sorry. i think you are not muted. earlier today you mentioned that melvin capital not engaged in a naked short of gamestop. and melvin closed out his position -- chair waters: i am sorry, your time has expired. >> thank you. i want to thank our panel for being with us for a very substantive and long afternoon. i think i might be a welcome face for them, because i am the last one to ask questions here. i want to talk with mr. tenev about options. i agreed with what other members of the committee have said from both parties about the value of

democratizing access and that we should give latitude for independent retail investors judgment. but in fields where there is an information asymmetry between the user of a product or service and the provider of a, there is always a professional code of ethics around them. you go to a doctor or a lawyer, there is a code of ethics that protects someone who does not understand as much about the service being provided and in finance as you are well aware, there is a fiduciary responsibility to do what is right. in massachusetts where there is 500,000 users of robinhood, we hold dealers to a fiduciary standard candy secretary of state security division filed a complaint against robinhood for violating that fiduciary standard. so some of it was premised on options. two thirds of customers approved in massachusetts for options trading identified as having

limited to no investment experience. so, the first question i would ask to you mr. tenev, and please take no more than one minute, is what do you think is the appropriate amount of financial literacy that a user should have for they should be allowed to trade options? mr. tenev: thank you for the question. let me first say that robinhood really pioneered commission-free and zero contract fee options trading. i think our market leadership in this space is due to the fact that we not only provide that access but have improved upon the safety of our product in several ways over the past few years. number one, we don't allow undefined risk options trades. so no selling of naked calls. no undefined risk. number two, we made several enhancements to the safety of the product over the past year, including the ability to perform an instant in-app exercise of an

options position, clarifications around the user interface, live customer help by phone. so we have proven and are committed to improving in the future the safety of our options offering. rep. auchincloss: to be clear, options are binary in outcome. they are qualitatively and quantitatively different than stocks and bonds, in the sense that you can lose money really fast. this is getting very close to gambling. especially when you game a five the experience -- when you game a five the experience -- gamify the experience as you do. i ask again, what level of experience should users have? mr. tenev: i should first say there are strict rules and regulations that robinhood complies with.

i should also note we are in a competitive market. several others have mentioned chinese-based brokerages that are essentially offering similar products all having to comply with these regulations. so we are certainly willing to engage in a discussion about how rules should change, if at all. as long as they are applied uniformly and are just to small investors and not just institutions, we would be open to having that position. rep. auchincloss: the standard for my constituents will not be what the chinese regulators think is appropriate. it will be fiduciary. i regret you have not addressed the question. i have to ask a separate one which is would you could -- would you commit to having a higher in-app threshold requiring financial education before allowing people to

purchase options? mr. tenev: i would be happy to engage in this topic substantively. as long as those requirements are uniformly applied to all brokerages and not just start a brokerages or brokerages catering to small investors, we are open to having that conversation. rep. auchincloss: the fiduciary standard is applied equally to all brokerages, but yours is the one that was singled out as having violated, given the way your users are using the app. i thank you madame chairwoman for renting this. chair waters: thank you. with that, mr. garcia, your recognize for five minutes. >> thank you madam chair -- [indiscernible] i wanted to ask some questions to mr. griffin.

would you consider your firm successful? this is an easy yes or no. mr. griffin: yes. i would consider citadel to be successful. >> of course i would agree that you have done pretty well for yourself. as you mentioned earlier in your testimony, your company handles over 40% of retail trading. did i get that correct? mr. griffin: citadel securities is the largest in the u.s. it reflects the excellent quality we give. rep. garcia: and citadel is a leading market marker for interest rate stocks as well, is that correct? mr. griffin: due to the great work of the house and senate on the back of dodd-frank, where we permitted competition to exist in interest rates and market, and i am grateful for that opportunity to compete in that market, we are now a swot dealer

and a significant participant in that market. i would like to express my gratitude for dodd-frank's reform. rep. garcia: good. your hedge fund managers, do you manage over $30 billion. is that correct? mr. griffin: yes, that is correct. we manage approximately $35 billion of assets for pension plans for colleges, charities. rep. garcia: that is pretty significant. it seems to me that your company is systemically important to our financial system, would you agree with that? mr. griffin: i believe that we play an important role in the u.s. capital markets. i believe that our hedge fund would not be in the category of systemically important.

with $30 billion of equity, it is not at the scale or magnitude of a jp morgan, bank of america, wells fargo. in particular having worked on these policy issues with members of the fed and various contacts, we don't have to make -- rep. garcia: you are doing pretty well, and yes, you are not one of the big guys that we have visit us frequently, at least a couple times a year. is citadel securities, you were fined recently for trading ahead of customer orders in the past? is that what i heard from a couple of questioners earlier today? mr. griffin: i believe this was brought up earlier. that we paid a fine for trading ahead in the otc market in

roughly 2012 through 2014. it was due to a systems failure. we have no tolerance internally for having made such a mistake. rep. garcia: but that did occur? mr. griffin: it did. rep. garcia: i appreciate that. it seems to me that the retail investors using their savings are not exactly an ewven -- even match for a complex, deeply connected firm like citadel. would you agree with that? mr. griffin: i don't actually understand the premise of the question. retail investors who do good research -- and one of our fellow panelists said earlier, many retail investors have understood the game changing technologies unfolding before us. electric cars, solar energy, and have done extra ordinarily well investing their assets in these newly emerging parts of the economy. rep. garcia: ok.

and your firm has done, and you personally have done well during the pandemic, right? there has not been much of an adverse effect on your firm. mr. griffin: we have all been adversely impacted by the pandemic. all of us along return back to life as it was 1.5 years ago. rep. garcia: but you have not done badly, right? mr. griffin: there is the personal impact on everybody, and we have all had to deal with it. rep. garcia: in terms of your bottom line. mr. griffin: our bottom line over the course of the last year has been successful. rep. garcia: good. that is what i thought. is it true that last year in illinois, you were involved in an effort, and you spent close to $50 million to defeat a tax increase in illinois that would have forced the big income

earners like yourself to pay more in taxes in illinois? chair waters: the gentleman's time has expired. all members on the platform today have been heard and had an opportunity to research questions. so before we get to closing statements, i would like to ask unanimous consent to enter letters into the record from the following entities. bear markets, public citizen, depository trust, and health markets. without objection, it is so ordered. i yield one minute to the gentleman from missouri for brief closing remarks. >> thank you. thank all the witnesses are being here. you all did a great job and we thank you for spending time with

us and educating us on the markets and all the activities surrounding gamestop, investing in shortselling. i would like to reiterate the mayor -- the ranking member's commitment that republicans stand ready to work with the majority to provide oversight on and investigation of the gamestop activities. going forward i hope we always have an eye towards protecting and giving more choice and access to america's everyday investors. i yield back. chair waters: i now yield myself one minute. today, the committee has heard first-hand of a group of witnesses about their roles in the market volatility in late january. this hearing has allowed us to begin to assess what's transparent and whether our guardrails have not kept up with the rapid changes of the market. for example, i am more concerned than ever that investors are being fleeced and massive market

makers like citadel may pose a systemic threat to the entire system. the committee is going to continue to examine these issues. our next hearing will include securities market experts, investor advocates to discuss the policy issues that are involved, and potential solutions to problems in our system that these events have illuminated. i will also convene a hearing to hear testimony from the regulators, including the exchange commission, and the financial regulator authority. all of these hearings will inform the committee's role and help us to determine potential legislative steps to protect investors and ensure wall street accountability. with that, i would like to think our distinguished witnesses who have been here today. without objection, all members with have five legibly of days to submit additional written

questions for the witnesses to the chair, which will be forwarded to the witnesses for their response. so i ask our witnesses to please respond as properly -- promptly as you are able. without objection, all members will have five legislative days in which to submit these extraneous materials to the chair for inclusion in the record. and i sincerely thank you. and i want all of us to pay attention to what is happening in texas, and to do what is necessary to be able to give assistance to all of our people, all of the families who are impacted, that are experiencing this very, very difficult time. thank you so very much. this hearing is adjourned. >> ok. that has been -- ok. it's been 5.5 hours of the house financial services committee hearings. we have heard from a slew of executives all day today from

robinhood, citadel securities, melvin capital, reddit, all talking about a slew of headlines. some big things that stood out to me, big general questions about the integrity, the plumbing of the markets. t+2, those settlement changes, where we stand, the payment for order flow, a lot of questions about that. lots of rules about options, and any clarification about is the market rigged around the little guy. let's seek to answer some of those questions. we are going to get wall street reaction. of those topics, what stood out to you as a key theme today? >> i was really interested in a capital from melvin capital founder gabe plotkin. he said the hedge fund industry as a whole will have to adapt to this experience of gamestop. and we all know by now that gamestop short interest heading into the squeeze was very high. it was about 141%, which is pretty astronomical. he said melvin capital already has a data science team

monitoring message boards which is really interesting because if you really scrape reddit and wallstreetbets, the first post about melvin capital and the potential for a short squeeze actually showed up in october. so that probably would have been pretty helpful for melvin to know since in january alone bloomberg news reported that they lost 53% on that gamestop short. taylor: did we get any further clarification today about the interrelationship of all of these people, where there is a lot of questions about maybe misconduct? what did we learn today? katie: that was definitely a focus. you had plenty of people testifying today but a lot of time was spent specifically on the robinhood ceo vlad tenev and their relationship with citadel, whether it was by restricting trading, was robinhood trying to help hedge funds out. so, you saw them try to present a united front. as said explicitly, they do not

answer to be hedge funds. what stood out to me was who was not testifying. there was not anyone from the clearinghouse there, and they are really at the heart of this issue. since with the settlement, the brokers have to post collateral since trades don't settle, and robinhood really had issues with that. we saw other brokers had issues robinhood had the most, and yet we did not hear from anyone at the clearinghouse. taylor: this is a technology show and it was very interesting that through the hearing there was a sense of frustration about this t+2 settlement. in one case there was something brought up about block chain technology we have gone from t5 to t+2. what did we learn today? katie: this is a really nitty-gritty market plumbing issue that does not tend to get a lot of attention. it has really emerged in a big way around this episode.

there is a sense in the industry that maybe we will get to t+1, maybe we will get to real-time settlement. you did see the citadel founder ken griffin say he expects the industry to get there, but everything has to go perfectly. it complicates market trading. even how tricky it is alone, putting it on the block chain, while maybe that is a solution in the future, maybe it is premature. taylor: but when do we get there? there were a lot of questions over the last five years of how quickly we have come, but now it doesn't seem like technology has kept up with the pace. with t+1 you can do realistic setting in a year or two. katie: that is what i am dying to know. you saw brokerages such as e*trade and interactive brokers raised margin requirements, which helped them get out of the issue that robinhood ended up staying in. robinhood had to raise more capital to meet those collateral

requirements. so that will be a question, whether the brokerages can raise enough collateral to meet those new settlement demands, as asll -- well as what it means for margin trading, because that is a very complicated topic. the industry has come a far way, but these types of changes tend to take a while. taylor: you kill it on the show every time you come on and talk about options, and there were a lot of questions about options trading, if it is too risky or not. it seemed almost patronizing against the retail investor to say options are too difficult and you don't understand it. what kind of clarification did we get around options trading today? katie: you heard gabe plotkin say options have a significant impact on what happens. one of the representatives raised the point that perhaps retail traders don't know enough about how the options market works in order to effectively trade there.

because options you can buy super deep out of the money options and they are inexpensive, but your losses are potentially amplified as well. so that is an interesting part. but this is not the late 1990's where we are talking about day traders. you are seeing small lot options trades. they have exploded in terms of volume. so it is definitely a different market and you do get into all these nitty-gritty topics like gamma squeezes and that just amplifies the impact retail traders can have on the topic. taylor: we need to make a poem about gamma squeezes. thank you so much, digging into what has been a grueling afternoon. there is another big story we are following today, and it was lost amid the shuffle of the hearing. nasa, this is an emotional aspect to it. they successfully landed their most sophisticated and largest rover on mars, as it touched

down and -- joining us now is vandi verma. she was just any mission control room during landing. describe to us with the last two hours has meant for you. vandi: it has been such a roller coaster and it was so incredible to be there with a team of people, all of whom have so much invested in the landing. just hearing that moment with them is very special. it was very exciting. we were altogether watching every minute of it unfold and i am very excited we get to begin our real mission on mars. taylor: so what is your real mission on mars? what are the next steps that we can expect? vandi: we are going to mars looking for signs of ancient

microbial life. we landed in a creator as we had planned. it's an ancient river delta. we are going to be exploring the delta and then climbing out towards the crater rim. we're collecting cores. that is one of the main things we are doing, which is new. we will be able to return the samples that this mission cashes with the subsequent mission and that will be the first time we ever get martian samples back to earth. and the incredible thing that allows us to do is use all the science laboratory -- laboratories to study them. that will happen sometime in the 2030's. some technology we will use to study them have not even been invented yet. so it is very exciting. and there are a lot of other

things we are doing. we have a helicopter, we are going to do a technology demonstration to study the first powered flight on another planet. we are also going to look at synthesizing oxygen for the first time for humans potentially. so there are a lot of exciting things to come. taylor: you talked about samples, and excuse me as i briefly interrupt. i wonder if it is like picking your favorite child. if you can only bring back 37 samples, what are the conversations about which samples to choose, what types of rock, etc., you are going to pick to bring home? vandi: that is a really good question. the science team consists of hundreds of scientists from all around the world. they have a lot of interesting discussions about what samples do we really want to bring back. because it is a finite resource. we use instruments that around the rover to first study the potential location to know that it has the most interesting

sample that we want to bring. we also want a diverse set of samples from different locations, and that is what is great about a rover, is we can drive to different parts and collect very distinct samples. taylor: talk to us about the driving? you mentioned the difficulty of this terrain, with rocks and cliffs, and you are near that crator that has so much tough terrain around it. what are some of the difficulties in now navigating that terrain? vandi: one of the biggest difficulties we have is the lag time between earth and mars. because morris is so far away, if you -- because morris -- it was 11 minutes later that we even do it landed. similarly when they are driving we cannot control it in real time. so we have to pre-think and preplan the drive.

you have to anticipate all the things that can go wrong along the drive before you send it. that is probably one of the most challenging things. we also know very little about mars and that is why we are going there. each site is unique, so it's the surface interaction, what a particular type of sandia ripple might be, is it going to result -- they are all interesting challenges we think about. taylor: you hit on an interesting point where you said some of the technology is not even yet developed to study some of the samples we are going to be cashing in the next five to 10 years. can you give us a glimpse of what that technology looks like as we try to think to the future here on this technology program? vandi: yeah. i'm not as much an expert on the analysis of the samples, but we are really looking for ancient

life, the science of life that may not exist now. that requires a lot of detective work and you need sensitive issue -- instruments that can correlate with signatures we know and associate with life. so that will be the kind of correlation you can do with the measurements we take, with the pixel and the sherlock and the super camera instruments we have on board, and correlate them the observations we can make later with those samples. taylor: i want to put today's moment into bigger perspective. i have a five-year-old nephew studying space. he put on his spacesuit and he watched the rover land on mars. you are a woman in the control room of course. what does this moment mean as -- for the young generation watching, for people looking at the control room, cheering on science? what does this mean, big

picture? vandi: i think it is really exciting that nasa shares most of our discoveries, and every single picture we will take with the rover will be publicly available. i am so excited to hear that your son is interested in this, because it is that excitement that leads people to go ahead and do even more exciting missions in the future. opportunity, one of the rover as we drove earlier it lasted so long that by the time the mission was done, some of the people who watched atlanta were in high school actually worked on the mission subsequently. so given how long it will be before the samples come back, the students who are watching, they could be the ones working and analyzing those samples someday. taylor: we eagerly await the arrival of those samples and the young generation that can no cash now go up and be able to analyze.

we thank you for your time today. vandi verma, nasa's chief engineer for robotic operations for the mars 2020 perseverance rover. what a treat to have you on today. stay with us, because coming up we are going to recap the latest from the house judiciary committee gamestop hearing, and what the future looks like for further financial regulation. this is bloomberg. ♪ this is bloomberg. ♪ (announcer) back pain hurts, and it's frustrating. you can spend thousands on drugs, doctors, devices, and mattresses, and still not get relief. now there's aerotrainer by golo, the ergonomically correct exercise breakthrough that cradles your body so you can stretch and strengthen your core, relieve back pain, and tone your entire body. since i've been using the aerotrainer, my back pain is gone. when you're stretching your lower back on there, there is no better feeling. (announcer) do pelvic tilts for perfect abs and to strengthen your back. do planks for maximum core and total body conditioning.

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taylor: once again today, all eyes were on gamestop. here's the latest from the hearing that just wrapped up moments ago. >> how did you misjudge your capital requirements to prevent people from being able to trade during that period? mr. tenev: i would not say we

misjudged. this was a one in 3.5 million occurrence event. >> you seem to have perfected the gamification of trading. >> giving people what they want in a responsible way is what robinhood is about. we do not consider that gamification. we know investing is serious. >> do we need more regulation or did the system work? >> i am not sure about legislation per se. i would say increased transparency could help. >> this is a threat to the future of our financial system and we have got to get to the bottom of it. >> what steps is your company taking to guard against this? anything? >> we spend a lot of time at reddit ensuring the authenticity of our platform. in this specific case we did not see any signs of manipulation. >> look, i am sorry for what happened. i apologize.

and i am not going to say that robinhood did everything perfect. taylor: the good news is we still have two more hearings to get even more details. let's get more details today with bradley tusk, tusk ventures cofounder and ceo, and the former mayoral campaign manager for michael bloomberg in 2009. what were the key takeaways for you? bradley: to me, the key take away is that the world has changed a lot and the regulatory system has not kept up. clearly congress is going to do its thing which is trying to get attention and headlines and the fact that we are talking about them a stem happy. robinhood and reddit and everone else is trying to stay out of trouble as much as they can. there is blame to go around, but ultimately we have a financial system designed for an institutional world that has existed for decades before the

internet. now we have apps like robin hood, information processes like reddit and twitter, the ability for people to make trades in nanoseconds. when you put that altogether, the nature of retail investing has to change and it is the responsibility of the sec and others to keep up. taylor: doesn't put more pressure for may be more regulation around the twitters and reddits they just mentioned? bradley: some of it, but some of it might also be around the rules governing the process. for example the two day rule around settlements. that probably made sense at a certain point. with the world probably operated in a much lower fashion. now that things are moving really quickly and retail investors are able to have access to this kind of information and market power, if robinhood did not have to wait as long -- and i'm not defending robinhood, but if they did not have to wait as long, maybe they would have been able to halt

trading for less time. so, i just think that the rules have not caught up. i think there is going to be regulation of platforms like twitter simply because congress has all other kinds of issues with them politically. but i am not sure they are the culprit. taylor: it is music to my years when you mentioned t+ settlements because this is a technology show. you brought up the fact that technology has not kept up in some ways, like t+2. ken griffin of citadel set a few years ago we had t+5, t+2. why are we not at t+1 and how realistic that we get there on the path to real-time settlement? bradley: we should be. the reason that we are not is it's a failure of government. by definition, regulation always lags rent --innovation. it's always going to be a gap, and that is ok.

but the gap cannot be indefinite or interminable. at a some point it is pretty protectable that as the markets are moving, if apps like robinhood are getting more popularity, people on reddit are paying more attention, you put all that together and clearly the rules that made sense five years ago even don't make sense today. the sec did not do a good job. we have a new administration and it is incumbent on them to step up. taylor: how does robinhood look coming out of this? bradley: obviously not great. to me, the fault for them wasn't so much that they did not anticipate this one thing happening. as you said in a cliff, it was a one in 3.5 million chance of this happening. but they market themselves literally in their name as the market for the little guy. we want to help the little guy have access and be treated as

well as the client of a big investment bank. when push came to shove, that did not happen. part of it was because they did not anticipate could go wrong. part of it is because the rules are outdated. at the end of the day, people either lost money or loss of the opportunity to make money because robinhood could not deliver and execute on its promise. taylor: we still have two more hearings of these which we were told about, and i am curious, what would you like to hear? what further clarity would be helpful in some of the next two hearings? bradley: the better theater obviously is getting the head of reddit or twitter or robinhood up there and screaming at them. in reality, even know it is boring, i would like to see department of treasury officials and sec officials, and all the different agencies that are responsible for updating the rules that they reflect the world we live in right now. if congress was concerned about getting this right instead of

headlines, that is who they would be talking to. taylor: always great to have your time. bradley tusk. we have all been wrapped up in those hearings for about 5.5 hours. coming up, bitcoin. the big dog is holding steady, $50,000, as the currency receives more and more institutional support. we are looking at the first bitcoin etf to hit north america. this is bloomberg. ♪ his is bloo ♪ want to save hundreds on your wireless bill? with xfinity mobile you can. how about saving hundreds on the new samsung galaxy s21 ultra 5g? you can do that too. all on the most reliable network. sure thing! and with fast nationwide 5g included at no extra cost. we've got you covered. so join the carrier rated #1 in customer satisfaction. and get a new samsung galaxy starting at $17 a month. learn more at xfinitymobile.com or visit your local xfinity store today.

taylor: north america just got there first bitcoin etf and wasted no time getting out of the gate. this is adding already fueled bitcoin rally and the support it has been seeing among institutional investors and money managers. i am joined by ceo at osprey capital which just launched a bitcoin trust on tuesday. great to have you. talk to us about why i trust and not an etf, as we have seen a

few different products this week. greg: certainly big news in canada about the couple of etf's. we launched the osprey bitcoin trust in the u.s. we don't have a bitcoin etf yet, but trusts have been the way to go for a few years. it is actually the same bones of an etf just would not as many exemptions as what it takes to make an etf work. our goal is to get this out to investors to allow investors access to bitcoin within traditional brokerage and ira accounts. it is trading on monday under the ticker obpc but it's a two year old fund. we just received approval to trade under that ticker. so we are very excited. taylor: i was reading through your release and you said it: has long-term depreciation potential. what is that appreciation potential given bitcoin is at $52,000. greg: everybody loves to focus on the numbers.

the reality is bitcoin is a disruptive technology. it is 12 years old at this point but still early days in terms of acceptance. you are seeing that come into play recently with braun-based institutional acceptance, fortune 500 companies like tesla , old line custodians like bank of new york, saying they are going to start looking at it. you have blackrock beginning to dabble. i think that coin has been adopted from the ground up and at this point the institutions are the ones which are five years behind a lot of retail investors. but it is happening. the reason it is happening is because bitcoin is taking a role as a digital substitute for gold and i think the world needs that in people in this country and moreover, international folks need that as well. taylor: is there a difference between bitcoin being a gold substitute versus the block chain technology and the

cryptocurrencies outside of bitcoin that are part of a bigger ecosystem? greg: for sure. everyone lumps of those together but bitcoin is solving that problem. other currencies that are tokens , they are solving a different problem. you have this confluence of technology, the cryptography and the block chain put together, but it is solving different problems. we think there is room for multiple successful coins and tokens over time. they will not be thousands like the dotcom bubble. there are not thousands of winners but there were a few that solve the problem the world wanted to be solved. taylor: all day we have been focusing on landing on mars and the other big story has been the gamestop for hearings. and in that hearing they were talking about the frustration over t+ [applause] settlement -- --

do you see that is a realistic solution? greg: given time, i do. i think that block chain -- on the one hand it could easily be solved. the part that is difficult is replacing the old world system and entrenched interests. that is the difficult part. technologically i think it is straightforward. i think we will get there. incidents like what happened with gamestop etc. are pushing the ball forward and forcing regulators to take a closer look and realize this needs to happen. taylor: we would love to get your final thoughts on other products. the bitcoin trust. other products that you alluded to? greg: we think the trust platform is a great one forgiving mainstream investors ticker-based access to not only bitcoin but other cryptocurrency coins and tokens. we are going to be rolling out additional products. cannot go into specifics right

now but stay tuned. taylor: greg king, osprey funds founder, appreciate your time. that does it for this edition of "bloomberg technology." we have to talk one final 10 seconds on what we saw today with the rover landing on mars. the incredible crater and what a successful mission it was. it was an emotional day as it is not only nationalistic pride, but an achievement for science act ontology -- science and technology. a wonderful day to be watching that. this is bloomberg. ♪ is bloomberg. ♪

host: a very good morning. we are counting down to asia's major market open. host 2: welcome to "bloomberg daybreak: asia." hedge funds and online brokers in the firing line as u.s. lawmakers grilled key players and the gamestop retail frenzy. there was a 27% rally. wall street fells