>> from the heart of where innovation, money and power collide, in silicon valley and beyond. this is "bloomberg technology" with emily chang. emily: i'm emily chang in san francisco and this is "bloomberg technology." coming up, tensions still high on the ukrainian border. we will look at how disinformation is sowing chaos and confusion about rushers troop buildup on social media. who is and is not the aggressor

on the digital front lines. plus, the sec kicks off its crypto crackdown the crypto exchange agreed to pay a $100 million fine. ceo zack prince will be with us to talk about what is next. coinbase is back up and running after crashing amid record traffic on the back of his super bowl ad. what the crypto ad blitz means for the future of digital tokens. all that in a moment but first, it has been a volatile day as the world watches the evolving standoff on the ukrainian border. ed ludlow has the latest. ed: u.s. secretary swinging between losses and gains. the s&p 500 the main gauge of u.s. equities made three attempts at a comeback out of negative territory. we closed down .4%. technology shares were able to snap the declines we saw friday which was a heavy loss in that session but only just. just .1%. mega caps leading the way pure

apple, amazon, tesla. pushing up the faang index. semi conductors eking out again. the markets struggling getting a read on the situation with ukraine and russian border. yields higher as the market looks at the outlook for higher rates on the minutes due this wednesday. interesting to look at bitcoin in the cryptocurrency space. this weekend everyone paying attention to the super bowl. but crypto tory -- crypto trades 24/7. we have been trading sideways. we did not see big swings like we have done in previous risk-off sessions. really more static range. speaking of the super bowl, if you were busy this sunday and you are not paying attention to the markets you might have missed this deal. or rather, the collapse of the deal. let's take a look at lockheed martin and aerodynamic. the deal has been called off. they decided to pull the plug because the sec sued to

blcok it. lockheed wanted to do the deal to bring the technology in-house to develop hypersonic weapons for u.s. military. whenever you talk about the defense sector that often, it was a sizable deal now being killed. it seems like the sec is on a bit of a role in terms of their antitrust work. so if you were glued to your screen this weekend you might not have thought about that one. emily: the popular crypto platform has agreed to pay $100 million to the sec and 32 states over allegations it illegally offered a product that paid customers high interest rates to lend out there digital assets. current block five customers continue to earn interest on their existing investments but no new customers in the u.s. allowed. they plan to register a new crypto lending product that will satisfy the sec's rules. joining me now is zac prince, the ceo and cofounder of blockfi. so why not register with the sec

a few years back? zac: hey, emily. thanks for having me on it i wanted to give folks some background before answering that. blockfi is a 4.5-year-old company with a team of over 850 people. provide financial services including retail, investors, institutional firms. on the retail side of our platform we have more than one million clients and a suite of products that includes the interest account product, which is in question with the settlement, a credit card product with bitcoin rewards, cryptocurrency trading, a crypto wallet, and a personalized deal offering -- yield offering. we also provide bespoke trade execution for more than 350 institutional firms. so the settlement today is related just to our interest account product which is one of the most popular roddick's we have because it offers folks a high yield on cryptocurrencies and stable coins at a time when

inflation is high and yield is hard to come by. consumers around the globe have benefited dramatically from this product which has paid out over $700 million in interest to blockfi clients today. the fundamental question is whether or not it is a security and our objective was to find a path for us to keep offering this to as many clients as we possibly can and we think that is what we have achieved here. i don't know it necessarily would have been an option when we launched the interest account around three years ago in 201. emily: ok, but we knew the sec was concerned about some of these lending products. we saw coinbase cancel their lending product because of sec scrutiny. so why not do this earlier? why now? zac: we were working on regulatory questions that we have always been heavily focused on compliance at blockfi. we paved of the trail with other products. in terms of finding regulatory constructs that work for them. this issue came to a head for us about seven months ago. like i said, our focus was on

protecting our client's ability to earn interest and finding a regulatory construct under which we could do that. i would highlight two key things from the settlement. one, it's a neither admit nor deny settlement. two, the settlement clearly lays out a path to registration of a crypto interest-bearing security, which we believe will be a win not only for blockfi but also for the broader cryptocurrency industry because of the clarity that it brings. emily: now, the sec commissioner hester peirce who is known for being more crypto friendly, thought this $100 million fine was not proportionate. she said rather than forcing transparency around retail crypto products, today may stop them to offering to customers in the u.s. what is your reaction to that? zac: i cannot comment on any specific statements or the rationale around the size of the

settlement amount in terms of the fine. but i can say blockfi is in the fortunate financial position to be able to manage the settlement with zero impact to client funds and continue to grow our team and platform. we have a ton of open roles we are recruiting for, a lot of new plans for later this year, on top of the two new products we launched so far this year and on top of the big point rewards credit card project we launched last summer. emily: register a new lending product, what will it look like? if the current product is so successful, how will this be different? zac: it will be different in terms of the type and frequency of reporting and information that is provided to consumers. blockfi has tried to be a leader in transparency and disclosures which we have done through a variety of mechanisms since we launched the interest account. but by registering we will be participating in a standard that folks are very familiar with. we will be subjecting ourselves

to quarterly reporting of audited financials and other key metrics in terms of what is happening on the platform and what risks exist within the product. and it is really a change in terms of disclosures, the structure, and in terms of the regulatory clarity around what exactly is this product. and in fact, i think that there'll be some really interesting opportunities created for greater adoption of the product when it's officially defined and approved as a security. emily: what does this signal to some of your competitors? do you expect folks like coinbase will follow suit, given that clearly they wanted to have a lending product like this as well? zac: yeah, we are definitely blazing a path that i would fully expect others to follow. ultimately the cryptocurrency industry is still relatively early in its development, in my view. i think we have a long way to go and a lot of upside from here, and i think that competition is great for consumers.

competition helps drive adoption, it helps drive pricing, efficiencies. and we embrace and encourage competition. so, i think that we are blazing a path that i would not say anyone in particular, but that hopefully quite a few folks will follow. emily: i'm curious what you are hearing from customers. are customers concerned, especially customers that have this lending product as it is? zac: let's be clear about one thing, this settlement does not impact our existing client's ability to earn interest. for folks who have a blockfi interest account, they will continue earning interest as they always have. additionally, if you are someone that is thinking about becoming a new client of blockfi, you can still access five out of the six retail facing products on our platform. trading, credit card loans, blockfi wallet, personalized deals are all still available to new clients. emily: ok. zac: but our clients have been asking questions like, how long will the process take? will this have an impact on the

rates or insurance? some of those things we can talk about now, others will come out in due course as we proceed with the steps in registration. emily: what is your message to new and perspective customers, when clearly we are seeing regular and take some time to catch up to innovation, if that is what you want to call it, or new technology? and that leads to a lot of uncertainty ahead, whether it is this product or another. zac: look, the cryptocurrency, the industry writ large is at a stage today where it is becoming part of the national political dialogue. there is an increasing amount of work being done by regulators and the industry to help create clarity. what i would say to consumers is that our view on this should be that we want the u.s. to be a leader in this exciting high-growth technology sector. we want the largest companies built in this industry to be based here in the u.s., because it is great for our domestic economy and also it helps promote our leadership and power across the globe, including the dollar standing as the mobile reserve currency. so, you should understand is

issues, you should educate yourself on what is happening in this market, and i would hope that a lot of folks when we are going into the midterm elections or just having conversations around the dinner table, will help talk about these things in an educated format. the fundamental objectives of the sec are around things like protecting investors and promoting capital markets, things that blockfi is incredible supportive of. and this is another example of us helping push for the industry by working with regulators to help facilitate clarity. emily: blockfi ceo and cofounder zac prince, thank you for joining us. coming up, how the conflict between russia and ukraine is playing out on social media, with the kremlin appearing to take on a new tactic. we will tell you how, next. this is bloomberg. ♪ is bloomberg. ♪

>> if we impose some very heavy sanctions, as i believe we are planning to do on the russians, with regards to international banking, but most importantly, with regards to nord stream 2 and their ability to distribute fuel, there's going to be some consequences to the united states and to other countries as well. emily: former u.s. defense secretary leon panetta there. as the russia ukraine standoff intensifies, state run media and kremlin officials are using another channel to justify a possible military offensive. social media. joining me to talk more about this is nina, global follow at

the wilson center an expert on disinformation. thank you so much for joining us. i would love if you can take us through the digital front lines. what are you seeing, how are pro-actors using social media versus ukrainian once? nina: i think this is an exploration and expansion of the toolkit we saw used in 2014, where during the first invasion, the first russian invasion of ukraine where russia illegally annexed the crimean peninsula, we saw a russian actors using fake accounts, trolls and bots to spread pro-kremlin messaging. we have moved on a little since then. rather than those fake accounts we are seeing trickle-down messages from kremlin officials being cycled through state run media and then laundered into the western information ecosystem on the fringes of our political system to kind of give credence to kremlin narratives. and what we are seeing are three main narratives. one, allegations that ukraine is

run by neo-nazis. it is important to note that while there are far right forces in ukraine do not hold any political power. they did not even make it into parliament. two, that nato is the aggressor in this conflict. that it has nothing to do with the fact that russia unilaterally stationed over 125,000 troops on ukraine supporters. and three, that the u.s. energy lobbies are the one pushing the kremlin -- pushing this. nothing kremlin -- not the kremlin. all of that is really important to note. we are seeing this laundered into the western information ecosystem in order to have impacts. i have seen this impact myself as i have done my research on the far left and far right of the political spectrum as well as policymakers. emily: right. that was my next question, how much of an impact are these tactics having? is it working, essentially? nina: it is hard to tell, because we do not have concurrent polling going on

talking about, have you seen russian propaganda, and if you saw a russian propaganda, what was your reaction. i think a lot of people do not really know that what they are ingesting is a russian narrative and do not know very much about ukraine and what has been going on there and the democratic path they have been planning the past eight years. so we really need some education about that and i think we have seen the u.s. try and do that through their classification towards deterrence strategy we have seen the past couple of weeks. but it remains to be seen. if the ultimate goal is to convince the russian government not to undertake this invasion, we will see in a matter of days or weeks whether this strategy has been successful. ultimately i think a lot of americans and westerners in general think of ukraine as someplace far away they do not have to worry about. but as we heard, this conflict could have far-reaching consequences not only for russians, but for the price of oil, which we just saw shoot up today thanks to worries about

the conflict escalating. emily: we are seeing some sarcasm and subtlety in some of the media discourse coming out of russia, and it's leading to quite obvious jumps in market moves. investors are feeling pretty jumpy out there. talk to us about the real-world consequences of some of these potentially very subtle digs. nina: well, you know, i think we're seeing russia push back on the white house and the united kingdom's prognoses that an attack could become imminently. pushing back on the idea that their diplomats and staff are not safe on the ground, that citizens are not safe on the ground. but just a reminder, whenever the russian government alleges they are not about to do something, in the recent past that has not been true. they said they were not involved in the annexation of crimea, they were involved. they unilaterally took the peninsula. they were not involved in the shootdown of mh17, they actually

work. i think we are seeing a lot of this back-and-forth. because investors are smart and we know the u.s. does depend on some russian oil, that europe depends on russian gas and oil in order to fuel its heating during the winter, that things can get pretty ugly, pretty quickly when these sanctions are imposed on russia, if they do decide to invade. so i think that is why we are seeing that volatility in the markets. and there's the very real consequence of the fact that ukraine is a large country. if you are not aware, i would suggest viewers look up a map of ukraine superimposed on a map of europe. it is huge, and it is right on the doorstep of europe and could have real consequences for migration and economics in the eu. this war is not something that would not necessarily be kept to a small region. it would have far-reaching humanitarian and economic consequent is for the continent, if not the whole world. emily: you co-authored a report

to verify photos and video appearing on social media out of presumably russia. what platforms are you seeing most of this stuff happen on? is it tiktok, is a telegram, is it twitter still? and are platforms living up to their responsibility to moderate it? nina: this report is actually real interesting. through open-source footage we have been able to verify russian troop movements coming from as far as the far east of russia to ukraine's border. this is not disinformation, this is just normal, russian, belarusian and crimean citizens taking videos of soldiers and tanks down there street, and because of that we can verify the types of equipment and units that are rolling in to positions near the border, and that is really important as russia continues to deny that this is anything but normal troop exercises. so that is the open-source component there, but we have also been tracking narratives on platforms like tiktok, telegram,

and instagram, where a lot of the discourse related to russian disinformation has moved since 2014. before we used to see things on message boards, facebook and twitter. now we are seeing a lot more on these more youth-oriented platforms, more viral platforms, platforms that are driven by algorithms and by individual user consumption, which makes it a lot more difficult to crack down on and a lot more difficult to make sure, ok, is this an authentic user or someone in authentic user or someone inauthentic and working on behalf of a government. it will be interesting to see how that develops. emily: nina jankowicz, global fellow at the wilson center, thank you so much. coming up, we are going to talk about the crypto bowl. how will the onslaught of crypto super bowl ads impact mainstream adoption, apart from crashing the coinbase website? we will discuss. this is bloomberg. ♪ is is bloomberg. ♪

emily: coinbase has entered the big leagues. they debuted a commercial during the super bowl, ditching the celebrity cameos and opting instead for a bouncing qr code for 30 seconds. that led to an offer of $15 in free bitcoin for new users and a $3 million giveaway for a current one. for more of want to bring in hannah miller who covers crypto for us. $7 million for a 30 second slot. did it work? hannah: i think it did. the evidence is in the fact that the website crashed and people were scanning it nonstop. i think it is really excited to see. it was definitely a unique way of approaching the super bowl ad. they did not go with celebrity star power. emily: coinbase and stx did these crypto giveaways. stx did go for the celebrity cameo with larry david and a couple of others. does a giveaway work, or is it gimmicky? hannah: i think it is a bit gimmicky, but this is a way to

show people, hey, crypto is fun, jump right on in. but i think it is interesting in that it shows that a lot of success in crypto boils down to chance. so it is sort of a unique approach here and i think it is interesting that they kind of both went with this giveaway tactic. emily: i think a lot of folks could probably relate to larry david's skepticism, and i'm wondering if this will really drive mainstream adoption. do you think when we look back on the crypto ball in history, will we see a bump in crypto ownership? hannah: i mean, it very well could be. i think larry david skepticism probably struck a chord with people or mably -- who are maybe a bit doctored by crypto. -- daunted by crypto. he is such a familiar face it could at least entreat people about crypto. we have already seen app downloads increase for coinbase's app, and there is evidence this seems to have caught on and there is positive buzz. emily: lebron also made into a

crypto ad. obviously we are going to see more intersection of sports and crypto in the future. what are you expecting to see? hannah: yeah, definitely more partnerships between difference sports leagues and cryptocurrencies -- crypto companies. we have already seen this happen with stx and coinbase striking partnerships with the nba. stx also has a partnership with mlb. umpires at baseball games where and stx logo on the uniform. i think this is just the start of more mainstream traction for crypto and sports is an easy way for people to get involved and hear about it. emily: all right. we will see how many newbies buy the dip, if this is indeed a dip. coming up, kraken ceo jesse powell joins us to share his reaction, and why he did not jump on the bandwagon. that is later in the shell.

-- show. this is bloomberg. ♪ s bloomberg. ♪

emily: welcome back to "bloomberg technology." i'm emily chang and san francisco. let's get back to the markets and one of monday's best performers with ed ludlow. really on the move. why? ed: it is one of your favorite days of the year. love is in the air, sometimes heartbreak. emily: did you get dressed up for the occasion? ed: that's right. filing date, the one we have all been waiting for. the day sec requires all hedge funds to state what their investment's were as of the close of the fourth quarter. rivian were in love, even though

stock was under pressure. let's bring up some of the names. some of these were investing -- existing investors. you have soros adding to their stake. d1 capital partners adding to their stake. the largest single shareholder adding to it stake. tiger global disclosing a new stake, although we are not sure if they participated in private round. let's bring up the stock performance year to date, a stock down more than 30%. it is down 20% since the ipo. there has been a lot of concern about their ramp up in production. even on the stock was on a downward trajectory, you see at the end of 2021, a lot of these big names coming in and adding to their position, which should be positive and it was so for the stock on monday. again, real interest from these headphones -- hedge funds broadly, but another big one, berkshire and activision, really interesting. berkshire of course, warren buffett's firm adding 14.7 million shares, a stake that

would have been valued at 975 million dollars on december 31. here's the thing, december 31 we have not yet had to deal of microsoft acquiring activation for $69 billion u.s. so this was pre-metaverse, pre-metaverse discussion and pre-metaverse play. maybe some interesting foresight from buffett. he knows microsoft real well. emily: ah, the oracle of omaha, maybe strikes again. metaverse might be the buzzword of the year so far, but close behind it is defi, or decentralized finance, an umbrella term for peer to peer umbrella services on blockchain. there is a ton of money and activity pouring into it while scams and theft still plagued the space. joining us now with some ideas, founding partner lauren. great to have you with us. there is so much funny flowing into defi and web 3.0 right now. where is the smart money going? lauren: thanks for having me, emily. no question, lots of buzz around

this space right now but i think this year in defi we're seeing a lot of convergence. what i mean by this is it is really coming from all angles. on the fintech side we have been an investor in fintech for the last decade companies like chime and more. we are seeing a lot of traditional fintech companies look to adopt crypto and defi strategies. they are doing that by engaging in for structure enabling a pit new companies like conduit are helping to enable it. companies like compound treasury are enabling this too. we're looking at infrastructure plays helping to bring fintech into crypto. on the other cited things in defi, defi needs to learn lessons that fintech has learned over the last decade around consumer product innovation. when you think about how hard it is for your average consumer and user right now, it is no small feat. it is one of these things where

if you want to participate in defi, you essentially have to go onto an exchange like a coinbase, buy a theory improbably, then move that ethereum, exchange it on a decentralized exchange for more local currency, then you can start, just start to engage in defi. so the onboard experience is really cumbersome. so we are seeing projects adopting better consumer and user interfaces to enable that. on the institutional side, companies -- there is a company we invested in called avant-garde from a female founder, but that is just one example. emily: what's the not so smart money? what is overhyped, overblown? lauren: you know, i think there's just such a proliferation of products, and

there are people coming out of the woodwork's with things that are risky for consumers. flashhong is one example that is seeing a lot of activity but really risky. i think also there's a lot of activity going on around cross chain technologies, which really enable interoperability across various level 1 protocols. and we need that interoperability, but the sophistication is not yet there. we recently saw a big attack on wormhole, which is one of the mower popular chains between the l1 of ethereum. the market is nascent and we have to be careful about some of these new technologies. emily: we hear so much about defi and democratizing finance, but defi is still really hard to access for the average person. have you found the company that can do defi for the masses, like

netflix and aol did for the internet? lauren: to be quite candid, we're in early days. i think it is starting more on the institutional side, like i mentioned with avant-garde, and i think we are starting to see and more and more in consumer. i still think we're looking to the future, and this is why this is a category we are so invested in in this calendar year. new companies offering new consumer products, and the infrastructure players enabling existing syntax has the attention of mainstream consumers to start to offer higher yield products to their customers. but yeah, ultimately, i do think that defi has the potential to really democratize access. but it's a technology like anything else, and at the end of the day it is designed by the people that are involved, and the good and bad will come from those operators. emily: all right.

so the next 100 million users, is that like, a decade out, a year out? when does that happen? lauren: i think we will see it in this calendar year. i think that a lot of what i am describing, the infrastructure is being developed so quickly. we're seeing all kinds of new companies pop up that are really offering these new user interfaces. gamification education is really started to take off. you can look at what coinbase has done as one example, where we are really pleased to be an earlier investor. or new companies like rabbit hole, which connects into your meta mass or existing while at and helps guide consumers through the experience of how to really use defi. these are projects that are really enabling new users to come on. so, i think it's here. emily: lauren kolodny, founding partner at acrew capital, thanks for giving us your view of the

future. some news crossing in the chip industry. intel close to a deal to acquire power semiconductor about $5 billion as part of its push into the outsourced chip manufacturing business. this, according to a person familiar with the negotiation. intel says a plan to announce the purchase of the israeli company as early as tuesday morning. coming up, the crypto bowl. kraken was one of the few crypto exchanges did not pay $7 million for a 30 second super bowl spot. why not? kraken ceo jesse powell is with us next. this is bloomberg. ♪ is bloomberg. ♪

emily: as we saw, cryptocurrency

firms went big on one of the most watched media events of the year, booking coveted commercial time for a captive audience and what many have dubbed the crypto bowl. coinbase spent millions on an ad with just a single qr code. later, their website crashed. sonali basak joins us now. i have to say i was one of the people who clicked on the qr code and went to the coinbase website. and here we are talking about it. is that success or not? sonali: you have the chief product officer a coinbase saying they had the most traffic ever had, and you are seeing it in the numbers when it comes to coinbase. they are rising. they have risen very far, in apple up to number two. cannot see another couple company, another crypto exchange and a top five, let alone the top 10 or the top 20. if you do not count the county cash app for the apple app store. so in that way it is a success. but with all that said, you are

not seeing a surge in bitcoin crisis -- prices that go along with all these potential new users. you have coinbase giving away $15 to new users, millions to existing customers as gratitude, but bitcoin prices itself as a result of all these promotions and these other exchanges has not risen even $1000 over the last couple days, even with a little bit of declines. so what does this all mean at the end? what does it mean for these companies? these customer acquisition costs move them forward might get difficult. and if you look at companies like coinbase, like sofi even who hosted the super bowl, now trading stocks, now trading crypto, sofi and coinbase are down more than 20% on the year when you look at their stocks in u.s. trading. so it will be interesting to see whether this translates into a business model, let alone just popularity online. emily: all right. sonali, hang with us, i want to dig into this crypto ad takeover

and the merits of it, or not, with kraken ceo jesse powell. kraken skipped the crypto ad bonanza on sunday. so why didn't you do a super bowl ad? i mean, everyone else did. jesse: sometimes it is nice to be second and see what happens to all the guys want to run out there first. i think the customer acquisition costs that some of these guys are paying, buying these stadiums, buying sports teams, i'm a bit skeptical that this is going to play out in the long-term as a positive investment. i think this is really a marathon. i think at any given time there are only so many people interested in coming into the cook, and i think -- coming into the cook, and i think spending -- coming into the crypto space. we do not have to be first at everything. we just want to be best, the best at what we do and we want to have long term sustainable business. it is not just about making a flash in the pan for our investors, for employees.

we are here running a business, not a popularity contest. emily: but is this a good strategy for the overall crypto space? do think this will bring in a lot of new owners, or does it just over saturate, overhyped things? jesse: it is a great question, and it will be great to see. maybe we will find out in the public reports from coinbase what this proved out to do for them. was in more than just getting a bunch of visitors to your website? did it actually translate into revenue at the end of the day? i think that is yet to be seen and we will be watching closely and hopefully we get some indication as to whether these campaigns were successful. emily: i am really curious about the winning strategy here, because you are seeing firms like stx expand further into the stock market in addition to crypto. you see firms like them and others look to provide -- and coinbase, really, provide more access to institutional investors, where the ticket size

is so much bigger than the real investor in the purchase of any bitcoin. for you, what is the way to go in terms of building any business? jesse: we are focused on the consumer segment right now. historically the company is all most 11 years old now but we are historically focused on the institutional segment, on the professional trader segment, and only in the last year have we started to focus on consumer. yes, the check sizes are bigger for institutions. however, they are also much more price-sensitive. and there are fewer of them. so i do not think you necessarily get to a bigger business just by serving that demographic. if you just look at the valuation of a paypal versus cme group or a nasdaq, paypal is multiple times bigger than those, and it is because of the consumer focus and the global focus. so, that is the direction we are headed. i think there is a bigger business there, there is more room for brand identity and loyalty there.

and i think the focus on institutional, while it might seem attractive any short-term, i think there is a cap to that business and i think those clients are not necessarily loyal. they might be loyal to where they get the most fees and the lowest fees are your revenue. so, for a business perspective, i think it makes sense, at least for us, to focus more on the consumer business. while we still continue to serve the institutional business, and that is where our roots are, but our focus today is on consumer. emily: curious what your thoughts are on this blockfi 100 million dollar penalty and how it is impacting your regulatory approach. i know you recently tweeted you are hiring 30 lawyers, so, probably going to be pretty busy. jesse: absolutely. we would hire up to 60. it's a great time to be a lawyer. the crypto industry broadly has a lot of unanswered questions, and i think that will continue to be the case for a long time as things shape up globally. in terms of our business, we

have a banking license in wyoming. so we might have a bit of a different approach to the lending business in the future. but i think it kind of concerns the suspicions that we have had all along about this model. it's that we were not totally sure that this would survive regulatory scrutiny, and it sounds like it has not in the united states, which is one of the reasons we pursue the banking license in the first place, which we felt like would allow us to do some of these things maybe blockfi is not able to do now in the united states with consumers. emily: i am curious, there is what you do with regulators, and there is what you do on your own, and in an independent audit. the idea of proof of reserves. how does this start to change the landscape for consumers and consumer protection, and what is it really doing to prove what is there for the underlying assets? jesse: we recently completed a

proof of reserves audit, it is the second in our company's history. we started this process about seven years ago when we did the first one in industry, and since then others have done it but we are by far the largest venue to have done this in recent history. and what it does is it allows the users to confirm for themselves through cryptography that we actually control the coins that we say we do, that we hold for them, that they can prove cryptographically that in a quote unquote bank-run type scenario where everyone came for their withdrawals at the same time we could serve those withdrawals. so i think you have seen over history there has been tens of billions of dollars of funds stolen or lost or misappropriated somehow in the crypto space. and this is something that is just unprecedented in traditional finance. you don't have this level of transparency. the regulators are not even mandating this stuff of banks. we never know if you go to a

bank if they are going to be able to process your withdrawal or not. i have had experiences where i go to the bank and ask for some amount of cash and they say you have to come back in a few days because we do not have that cash. so, this is something that is above and beyond any traditional financial institution can offer, and it's something that the crypto industry is doing for itself and i think it sets a great example for the world and for bigger leaders and for law enforcement who are worried about these situations of insolvency, that this industry can control for these things and it can self-regulate, and this sets a new bar, i hope that regulators will start to look at and start to apply the scrutiny they have of the crypto industry back on the traditional finance industry which is not offering these kind of tools or transparency. emily: i noticed that you are promoting crypto for valentine's day, and i am curious why you think that is a way to show your loved ones that you care, given the volatility of the market. i mean, can we really count on bitcoin right now?

especially where it is at at the moment. jesse: i think diamonds are just losing value every day, so you would be much better off giving your partner some bitcoin today and having them hold onto that for the next 20 years than you would be giving them a diamond, which are being created in labs these days. that cannot happen with bitcoin. there is a finite supply. i am very bullish on the currency long-term and the prospects of the entire industry. so i think it is a fantastic gift. it brings someone into the space. and bitcoin is more than price speculation, it is solving real-world problems like what we are seeing in canada where you have fundraisers being shut down by the government, or by centralized fundraising platforms, and bitcoin is circumventing that and getting around that, getting money directly to the people. so i think it is a vote for freedom, and it is a representation of true love if you give someone bitcoin. sonali: jesse, beyond what it means, i am curious about the price here, because anybody who

loved bitcoin last year at six he thousand dollars or so was still thinking it could possibly get to $100,000. i know you thought so at one point too. how fast we get there again, or for the first time? jesse: i have to put my reservation on hold. hope to get one with air conditioning. i am still bullish on the price. yeah, a lot of us thought we would get over $100,000 last year. but you cannot predict these things ultimately. what we see are continuing use cases and continuing reasons for people to use bitcoin. inflation is abnormal time high since the 1980's, and that is the stated inflation. we all know when we go to the supermarket that inflation is way beyond 7.5%. so, you know, that, combined with the controls, the clampdown on these protests and legitimate fundraising efforts, i think shows that the use case for

bitcoin is getting stronger and stronger, and there is more and more reason to believe in it long-term. emily: all right. bitcoin diamonds. luckily people -- [laughter] put a bitcoin on it, that is what i say. kraken ceo jesse powell and our very own sonali basak, thank you both. coming up, from meta to microsoft. we take you through today's top tech stories, next. this is bloomberg. ♪ is bloomberg. ♪

emily: well, first it was finance, and now it is technology. the return to the office underway for microsoft. company telling its u.s. employees to start returning at the end of the month in a fresh attempt to get the tech giant's operations back to normal.

we wrote in a blog post workers should begin a 30 day transition period starting at the being of march. that said, they still plan to allow remote work for half the week without a manager's approval. meta facing a fresh lawsuit in texas. the states's attorney general filing a suit against the parent company of facebook overuse of its now discontinued facial recognition technology. the state alleging that use of that tech violated its privacy protections for personal by metric data. the lawsuit seeking civil penalties in the hundreds of billions of dollars, according to a person familiar with the matter. meta says the claims are without merit, and that we will defend -- they will defend themselves, quote, vigorously. staying in the lone star state, the faa is extending the spacex review for the rocket until march. it is the second delay that will assess the impact of launch operations in boca chica, texas. it is expected to --

that is it for this edition of "bloomberg technology." tomorrow we have brian chesky right here on bloomberg television on the back of airbnb results. this is bloomberg. ♪ s is bloomberg. ♪

>> very good morning. i am haidi stroud-watts in sydney. >> i am shery ahn in new york. welcome to daybreak asia. a choppy session on wall street, yields jumped as traders waved to the fed and geopolitics. concerns that russian talk