In this episode, I speak with Natalya Thakur, CEO of Knova, and Kevin Hoang Founder of EQ Exchange (EQX), two innovative founders who are tackling the fundamental issue of trust in the digital assets space

🔑 Key Highlights:

• How EQX aims to become the first company in the world to disclose financial statements in real-time
• The critical difference between "compiled" vs "generated" financial statements for transparency
• How technology can play a central role in creating new trust frameworks for financial services

👉 Follow Natalya and Kevin

Natalya: https://www.linkedin.com/in/nthakur9/

Kevin: https://www.linkedin.com/in/kevinh5/

https://www.eq.exchange/

Press release of their partnership: https://www.eq.exchange/blog/building-a-new-era-of-trust-in-digital-assets-with-knox-network

👉Follow Monica:

LinkedIn: https://www.linkedin.com/in/monicamillares/

YouTube: https://www.youtube.com/@moni_millares

TikTok: https://www.tiktok.com/@moni_millares

We cover:

[00:00:00] Introduction and defining trust in financial services

[00:04:00] Exploring the components of trust: what is transacted and who is transacting

[00:06:00] Knox's purpose: creating a multi-asset ledger as a unified source of truth

[00:08:50] Natalya's background in traditional finance and digital assets

[00:12:30] EQX's purpose: rewriting the script on crypto exchanges

[00:15:00] How Knova and EQX collaborate to solve trust problems

[00:18:30] Kevin's background and entrepreneurial journey

[00:21:30] EQX's innovative approach to real-time financial statements

[00:24:00] Product thinking behind building a trust-based moat

[00:28:45] Translating radical transparency into user-facing features

[00:32:00] How companies can help customers trust the crypto space

[00:36:00] Challenges of applying design thinking with institutional users

[00:39:00] Obstacles financial institutions face with crypto adoption

[00:42:00] Why crypto remains too complex for mainstream adoption

SEARCH QUESTIONS

What is the definition of trust in financial services?

How did FTX collapse affect crypto exchange trust?

What does transparent financial reporting in crypto look like?

How to build trust in cryptocurrency exchanges?

Why do we trust traditional banks over crypto platforms?

What are real-time financial statements for crypto exchanges?

How can crypto exchanges improve user experience?

What is a multi-asset ledger in cryptocurrency?

How to manage both traditional and digital assets together?

What challenges do financial institutions face with crypto adoption?

Why is crypto still too complex for mainstream users?

How can design thinking improve crypto user experience?

What's the difference between compiled and generated financial statements?

How can technology build trust in financial services?

What is radical transparency in financial services?

How do you establish trust as a new financial services company?

What are best practices for crypto custody and security?

How to simplify cryptocurrency for everyday users?

What is the purpose of Knova in the crypto ecosystem?

What trust problems is EQX trying to solve?

Disclaimer: This episode does not constitute professional nor financial advice and does not represent the opinion nor views of my current, past or future employers. The guest has agreed to record and release our conversation for the use of this podcast and promotion in social media.

With Intro and Add. Kevin, natalya, monica

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In this episode, Monica breaks down how these innovators are creating radical solutions to the crypto trust crisis after Ft X collapsed, rebuilding principles for the future of financial transparency. If you want to build competitive advantages through trust. Understand why traditional models are failing and learn how technology can create new trust frameworks in FinTech.

This pod is for you. I'm pretty sure we will be the first. Uh, so if you think about a public company. They are mandated to, um, provide a public financial statement, but this is compiled. Compiled means weeks, months, right? What if we flip that out a bit and what if we actually don't wait till the end of the quarter, but we actually release it to the public in real time as we're generating it?

But in the meantime, how can we be transparent about what those standards are?

Hey, before we dive in, can I please ask you her a big favor? If you are enjoying these conversations and getting value from the insights our FinTech beers share, please hit the subscribe button below. This is the easiest way to support the show, and it could mean a lot. My commitment to you is every single week I'll continue to bring more founders and product leaders that share with us the strategies that are working today to drive innovation and FinTech growth.

Thank you. Thank you. Thank you.

Monica: hi, Natalia. Hi, Kevin.

Very looking forward to this conversation because you guys are doing exciting stuff. Not only it is in the crypto space, but it's also aiming to solve.

So before we go into the depth. Of the topic and crypto and trust, let's start with the basics. What's your definition of trust in the context of financial services?

Natalya: So all counterparties and stakeholders abide to similar requirements when it comes to transactions, that's what I think about when I think about trust.

There are two components to that. So one is. What are you transacting? And two is who is transacting? So when you think about what is being transacted basically from my perspective, assets are stores of value to have different systems acknowledge a transfer of value and trust that it will be accepted as X amount in a different or similar asset form, I think is really important, right?

And I think more importantly, do I, or the institution transacting, do I trust the initiating or receiving party in the transaction? And so that's really the two components of what I think about when I think about building trust in the context of financial services.

Monica: I like that. Kevin, what's your take?

What's trust?

Kevin: It's very interesting. He said, I think about it actually even further back of when I started this company, but she, what does that question mean? What is trust? Because especially for me, I've actually had my bank account since I was six years old, the same bank account. And I'm like, why did.

Okay, so it's age size regulation. But now if I break down, the biggest is not maybe the trustworthy because actually, as a lot of failures that we've seen some of the biggest companies have failed us. And especially age well, in crypto, it's really interesting because it's only been around for 15 years.

Monica: I'm like, can you go deeper? .

Natalya: So Kevin, I completely agree with you. I've been using the same bank account that my parents gave me and I haven't changed. And I really resonate with that. And I feel like a lot of people would.

Kevin: Yeah. A hundred

Monica: percent.

Kevin: And it's really interesting to answer to that question though.

And I don't actually have all of the answers, but I think it starts with a few things that. Funny enough not everyone does. So it's things like accountability, holding someone responsible or someone is responsible. And who is that person? Transparency, public disclosure we have public companies who have to publicly disclose, but also you have some really interesting companies that cost plus drugs in the U.

How do we actually trust companies when you don't have 2 or 3 of these? That's a question that I've been. Thinking deeply and hopefully we're going to have some things that answer it, but I think this isn't evolving.

Monica: Yes. Oh, and I forgot to say, I love that. Exactly. You were like, I've been thinking about this deeply.

All of us come from a product background. So our brains are very. Yeah, I've been thinking about the problem. So before we go into solving the problem of trust, we have, like I said, at the beginning, we have two founders collaborating here and it's not just anyone talking about trust. The podcast is about how we can build purpose driven fintechs.

Are you a FinTech product leader who's awake at 2:00 AM in the morning thinking if your product map is going to keep you ahead of the competition, dreading the next board meeting because you haven't hit those aggressive numbers. The reality is FinTech is hard, and being behind six months in the innovation curve can cost you your competitive advantage.

So I'm a big fan. It's my fourth event, and I'm really looking forward to seeing you there and connecting and having a set of fun and discussing all the FinTech picky things. Sign up in the link below and use the code one 200, work a discount. And remember, Asia has special pricing, so go and sign up now.

See you there.

Monica: So Natalia, what's the purpose of Nox?

Natalya: We are a multi asset ledger to manage all asset and money supply within a business, whether that's traditional assets or digital assets. So we provide a real time unified source of truth for businesses working across these different ecosystems.

Data stores workflows spinning different discrete databases, and it really leads to problems with back end operations and inability to run your business with transparency and this concept of trust, which I think Kevin will have a lot to say about and so what ends up happening is. When you have all these different systems, it's much harder to combine transactions across new asset types.

And now you're taking a traditional system and you're trying to manage, all these traditional systems, like Kevin said people have had their bank account since they were super young and you have to manage them against a diversity of other networks, wallet providers. On chain fees on and off ramp flows, and it's not just for individuals, right?

It's a newer and nascent industry today. There are too many assets, too many intermediaries, too many places to buy and sell assets. So how do you build. A transparent and real time technology that can really help fill the gaps.

Monica: And as you speak, you obviously know the space really well.

So can you give us, and you have an amazing background you've been doing many things can you give us like a one minute short story of Natalia and all your amazing achievements so that people are like, she's cool. My goodness.

Natalya: From my perspective, everything when it's happening doesn't make sense.

I was the one working with our APs, custodians, our market makers, with all our external, with our external stakeholders and then internally helping create and trade and share our different index investments products, even at a institution like BlackRock, that's complex and refined, it was still very Much fragmented on the backend.

To also including stable coins as a part of their ecosystem. And I think beyond just being close to the product, holding a bunch of different types of functional roles. I also did a lot of industry work. So there were two global initiatives that I sat very closely with. One is an initiative I co founded with the.

The United Nations really thinking about how do we improve, the access to digital currencies and policies from a perspective of the sustainability development goals that they have. And the 2nd is the Brenton woods committee, which is a committee of the top financial executives and CEOs really aimed at thinking through

how are financial markets evolving? How is FinTech involving? And how do they need to prepare?

Monica: Amazing. I have to say this, but if you were to look at Kevin's and my eyes looking at you, we both are like, Oh my God, she is amazing.

Natalya: I think when you're in it, you just Are so focused on what you're passionate about and joining the things that sound interesting to you. You're not really thinking about, oh the rooms that I'm walking into look a lot different than what maybe I'm used to.

Monica: amazing.

Cool. Coming back to you, Kevin, what is the purpose of exchange?

Kevin: Okay. So really simply as I mentioned, I was been thinking deeply about this trust issue. Cause I actually got into the space again, post FTX, which obviously was a very big moment in time for the crypto industry.

Okay. For the purpose of the VQX, I wanted to actually rewrite the script on crypto exchanges as they exist in the medium between Web 2 and Web 3 as the bridge, right? And then going back to the trust problem is how do we actually build a trustworthy exchange? What does trust mean? In the regulated space obviously competing with established businesses.

So those are the 2 things I've been thinking about. So our purpose is actually to hopefully try to solve some of those. Those are actually very big problems. Is really the mass adoption problem of how to get people into crypto. So my thesis is and this is my product management head after asking the why, right?

I trust this. So my thesis is that mass adoption is a trust problem. And people need to trust their institutions, which there's not many because crypto is actually built on not having to trust anybody. And really, people also don't trust what they don't understand. So we're hoping to solve this in two interesting ways.

That's just the product piece that I've been, through my experiences working heavily on and I'm really excited to, to actually solve that problem.

Monica: Yeah. And I think it's a very relevant problem and it's very exciting to see you guys working together. So let's go straight into it.

Like, how are you working together to solve that problem?

Natalya: I can jump in here really quick. So from my perspective, we are trying to help eqx maintain. All their connections and transact with all their external accounts. So traditional cash accounts, custodial accounts, omnibus accounts, all their digital asset wallets and different hot or cold wallets, different networks.

The second is that all transactions are streamlined through one system so that from their perspective, they can have lower operational costs and, managing across these different asset classes. And then the last is just a more efficient use of cash and assets through improved. Netting reconciliation, internal daily processes that can happen using our system and allow them to then control how they are doing settlement.

Kevin: Maybe add a little bit on top of that as well. Couple of things. 1 is trying to solve a lot of big rocks. It'd be a little bit naive for me to think I can solve all of these myself. So that's actually. We're not spending a lot of sense because crypto sits actually in the middle of web 2 and web 3, and Knox has this multi asset ledger that does both fiat and digital assets.

And if you actually deconstruct how an exchange works, we're essentially sending money between 2 parties, 2 wallets, right? Whether that is money like fiat in exchange for either other fiat or exchange for a digital asset, that's technically a crypto exchange in the simplest sense, right? And then there are on chain transactions, which, you know.

And we can see, but the off chain 1 is actually where all of the transactions are. And that actually is opaque or in the case of FTX doesn't even exist. That's a different story. So combining this actually is a very big pain and a very big pain point to solve. To have an infrastructure platform that we can build on top that can do this native natively was.

Huge, obviously adventurous, right? And the ability for us to seamlessly work between digital assets and fiat natively. Again, we are a crypto exchange. That's what we do day in day out. And to have that baseline, out of the box, I would say that's obviously gets us much further than building it all ourselves.

That's really where we like to work is really good.

Monica: Yeah, and I want to go deeper because you said this is like a first type of company in the world before we go into that question, obviously, it's like similar to Natalia. It's you sound like an expert because you are, can you give us the one minute background of who's Kevin and what have you done?

What took you here?

And then went into product management, which was the intersection, a little bit of everything. So that actually was really helpful for me because I get to use a little bit of all of my skill sets. And then from there, I joined a crazy startup. I did a data management, but personalizing for users and trying to understand who the user that's consuming content was.

And then for that, I actually started a restaurant, which is completely different where we tried to. And this is my favorite thing to simplify the menu to have really 5 things on the menu and to do it so well to be the best at that thing. Again, going back to how do you really understand users and what they want and building something where.

Teams on the product management side, and then left that to advice for companies, startups, because actually, that's what I love doing was just helping startups, but I just had the itch to. Build something. And I think this was one of the things where I saw a lot of opportunity and no one was really.

Thinking or even trying to do this, I think that's where we'll be the 1st company in the world. And I think. Even if we don't do it for a couple of years, I don't think anyone's going to do it either. But I think it's a worthy problem to solve.

Monica: Definitely. Exactly. You have the entrepreneurial bug since the beginning of your story.

Kevin: I'm pretty sure we will be the 1st. I've cited to enough people where if someone is actually doing it before me, I'd like to know.

But so if you think about a public company, they are mandated to provide a public financial statement. Right but this is compiled means you get all the accountants together and compile and create this view of the company. At this point in time, right at the previous companies I was with this could take.

You have to get all of the data feeds in. To compile this financial statement, and what if we actually don't wait to the end of the quarter, but we actually release it to the public in real time as we're generating it. How different would that be? I actually have no idea. It's a little bit scary to me as well, but I think it's also exciting.

But the reason why it's important is the industry that I'm in with crypto is moving to really positively proof of reserves. Okay, reserve is a mathematical way to determine if your assets are on the chain of custody of whichever custodian or crypto exchange that's holding your money, which is great.

How different could it be? We're probably going to be dealing with a lot of the interesting outcomes of it, which. I think on public markets, all of that stuff, there's a lot of really interesting interpretations of it, but I think I'm excited to. At least try it.

Monica: I love it. And it's yeah, it collapsed in 11 days, therefore the existing solution is not good enough.

Kevin: Okay. Okay. I mentioned I post FTX, I was thinking about how does a company even get or be trusted, right? How do we trust which companies? I'm like, man, I trust my TD, but I use TD, but use them for six, sorry, 30 years, but I don't even know why I trust them. And just, again, asking the why and the why, how do we trust whatever institution does we trust, right?

I asked my mom, why do you pick this bank? They were the closest. Or they were the biggest. So as I went through that process funny enough, I actually had someone that I interviewed for a job. And she asked a really interesting question. So it was advising for a crypto exchange at this time.

You like the the. Benefits that they give you at this point in time, but really no 1 really cares about which 1 they use, right? It's convenience, whichever is closest. So these are the 2 things that I was thinking about in the opportunity space. How can we build a moat? What is a moat, at least in financial institutions?

But just because you have a lot of users, does that mean you're trustworthy? So these are the, things I was thinking about, when I was thinking about this opportunity spaces. Actually, I don't think anyone really trusts finance or, BOA or Wells Fargo. They're just the biggest. So is there something that I can do to actually get people's trust authentically?

So I can compete with these big players. So that was the thinking, the whole process.

Monica: I'm like, cool product geek being like, Oh my God, this is so exciting. How did you then translate that thinking into your actual product proposition and your feature set?

Kevin: So this is going to be a little bit of a funny story.

1, what is something really different that we can do that potentially is a non consensus idea that we can try to incorporate? So for me at the time, I was just actually thinking of what if we just walk through metal detector naked? I have nothing to hide. How different would it be?

Would it solve the problem? Maybe, but at least it would be radically different from what's existing today. The funny part about that story is that somehow in my mind, I remember there was a, 9 11, there was a guy that was very frustrated with the TSA, being the organization that manages airport security.

Monica: And then I guess the question is what asking as a PM, right? What are the features that end up coming out of that?

Kevin: So there's the simple again, the thing that we're obviously working with Natalia on the technology side. Right that is a core basis of how our company operates and actually.

Will be extremely valuable to many of our operations. Until I says, we'll be saving in terms of how, the resources required to run our kind of treasury and stuff, so that's fantastic, but that's not really a user right. We want to. Think about, where does transparency stop it? And then why does it have to actually stop?

So if people knew that actually wasn't taking a lot of money from them. And I wasn't maybe they would be a little bit. Nicer to us, but just being realistic with it, right about what our cost is and how much we're making on people. So being able to bring that honesty into crypto of just telling people exactly what we're making and can we build a sustainable company by not ripping people off?

It's been 7 minutes since you sent this. If you don't receive in the 24 hours, how about we automatically create a support ticket for you? Instead of just telling people it's been sent and then people get nervous. That's. The money, where's the money? I haven't received it yet. This crypto is instantaneous when, a transaction settles in crypto, it's in minutes.

Natalya: Exactly what I was talking about with who are, like, who is transacting and can you trust the initiating and receiving parties? Completely agree.

Kevin: Why don't you just tell people that?

This transaction typically takes 24 hours. I have a little bar that says we're sending it. It's literally been 7 minutes. It's not going to get there till tomorrow. And when it doesn't get there tomorrow we will take initiative to see if we can fix it. So little things like that, I think are really valuable, but I don't see anyone doing it.

So I think the transparency could be also from a user perspective or UI perspective to really bring people to understand how the financial system works or the time it takes to complete things because people get really nervous about their money, rightfully

Monica: definitely. Yeah, we all do. Thank you for that.

Natalya: I feel like the little design thinking bug in me is just saying sit with your users and run workshops and I feel like that's a lot of what I did, not only for end users, but for financial institutions, as we were trying to figure out, like, how do we get people to cross the chasm?

Because it's scary. Especially when. These industries are not sometimes fully regulated. They don't have the same standards. I still really stand by what I said in the beginning. I think it comes back to what I was saying earlier, but focusing on what is being transacted and that if I sent X amount of money that I'm going to receive X amount of Bitcoin or other type of assets that it's equivalent to that exact Payment and who is transacting, right?

There's always some level of cash off boarding. You have to touch the traditional world. The problem is that those two worlds don't have the same set of standards today. And so those standards can't be created overnight. They're going to take some time. And so we need to be patient with that. But in the meantime, how can we be transparent about what those standards are transparent about what people can expect to Kevin's point.

If that purview of assets is exploding, then it's really hard. I think to have traditional trust controls in place because the types of intermediaries and companies and people that you're going to buy and transact different assets is only increasing. So that book of people you would need to build trust with is only more and more.

You can't build trust in the traditional way. Technology has to play a part in helping you build trust across all these different. Ecosystems that you want to touch

Monica: 100 percent and I want to go back, to what you said at the beginning about design thinking. So same similar we did with Kevin let's go into your product mind.

Now, let's go into your product mind. And actually, I just finished the 4 day practitioner course on design thinking

Monica: Exactly. And that it puts customers at the center so that then we can have the commercial results because many people go straight into commercial. But anyways, coming back to your time when you were doing Basically, following the design thinking process, you were with customers. You said you work both with individuals and institutions.

As you spoke with them, what were the things that you were like, Oh, that was a surprise. Or, Oh, that's a contradiction. Give us a little bit of a feel.

Natalya: Yeah, I think that in general, I have a high theory that when you're either in, if you're internally working at a firm and you have direct access to the users, I think design thinking works really well.

They're not allowed to talk about everything. They're not going to be able to give you the same site type of real time feedback that you will be able to get from a direct user. And so there, it's about building trust, finding the right people to be able to give you feedback or figuring out other ways to get it right through committee work, industry work, et cetera.

I really don't think that on when we think about financial institutions. That they have a predisposition towards problem solving that way, and it was easy and better to do when I was internally at those institutions, right? Because then it's peer to peer colleague to colleague. But when you're a founder on the outside, trying to grab that information, I was.

Surprised by how. You don't get that direct feedback loop, and you have to figure out creative ways to get that that you would normally get with Kevin, right? He can go directly to his individual retail customer and you can get that pretty immediately. It's different when you're building for larger institutions.

Monica: Amazing. And what are the challenges that financial institutions are facing when it comes to crypto adoption,

So I think, okay, theme that we've been talking about is like systems for traditional and digital assets are so different, right? And they need to work together now more than ever. I think that's super clear, right? All, both our businesses touch that problem very intimately. Absolutely. I think there's been a lot of challenges around interoperability between systems.

The scale of work that you can do between 2 systems. And then just the mismatch of standards that have been created in such different worlds for each of these ecosystems and that can be things around privacy or cost to even develop and maintain an industry solution at scale for financial services.

You're working with. All of their stakeholders and the people that they touch to, it's almost impossible to, move the needle forward. Without kind of having buy in from every single stakeholder. And so I think some of these solutions will be solved via tech. I think some of it will be solved via standards alignment over time.

I think. The one thing that. From a product perspective, I think is so important. And we haven't really talked about yet is make sure you're using the technology for the correct use cases. Sometimes you don't need public or private blockchain systems to solve your problems, right? I think a lot of what tech is tech has having a moment where it's like, there's technology in search of a problem.

Monica: A hundred percent. Kevin,

Kevin: You said a really big thing that I a hundred percent agree on, which is I think a lot of.

Companies technologies are a solution looking for a problem. And people in the crypto industry hate me for it, but I think crypto right now is a solution for a problem. And until we get mainstream adoption that's how you prove that this is solving a real world need. But you also do need sometimes you have to build it and people will come as well.

So what I mean by this is this elitism and complexity. So in traditional finance, sometimes the bigger the word is actually the simpler the financial instrument or the vehicle. And you actually create all these complex words over that repo, whatever it is, where people don't understand what it is.

And it's oh, wow, I don't know what that is. It's scary. ETF, mutual funds, they create this complexity layer of words that drive away user adoption where, you know, people. There's this thing that we're trying to do. I started that. Traditional finances have been trying to do, which is to drive adoption of people investing in the future.

You can sometimes argue, but it has changed the perception of it a little bit, but it's still too hard to eat. And as an example the actual best practices of using crypto today is actually countered to what we teach people today in security. If you told your mom that In order to really be safe with crypto, you have to use a cold storage wallet that is air gapped.

And by the way, you have to write down your seed phrase on a piece of paper which we tell them not to do. And if you ever lose that piece of paper, you lose all of your money, right? They're like what, are you talking about? I thought you told me to keep my passwords in a in a password vault, whatever it is.

But until we get that simplicity, I think right now, it's a little too hard for us to transact in crypto in every day. And with crypto, even though it's almost everywhere, and we shared a lot, the adoption of crypto is still actually in early phases, right? It's actually not even the majority yet.

It's actually in the early adopter group. So these are the people who are willing to sacrifice, use a beta. Even things don't work correctly. And there's a very common phrase in crypto is you actually have to be scanned once to actually understand how crypto works, which is not a very attractive onboarding statement, right?

Monica: Amazing episode. And I think we could keep going for another half an hour, so we'll have to do an episode part two. In the meantime, thank you so much, Natalia and Kevin. It's been an absolute pleasure having you in the show.

Natalya: Thank you so much. We had so much fun.

Kevin: This was awesome. Thank you for having us.

Monica: Thank you, everyone.

Natalya: See you next week. Ciao