FRMO Corporation (OTC:FRMO) Q2 2023 Earnings Call Transcript

So I think for the industry quite properly is saying I need to be shown success and they’re right. They want to see the success and most people will want to see success. Incidentally, you don’t need the world to be invested in Bitcoin for this to be incredibly successful. So don’t forget this year New York Stock Exchange, democratization meaning the average person start owning stock, that didn’t happen until the advent of IRA accounts in the 1980s and beyond that New York Stock Exchange was founded I think in 1797 or something like that. So it took almost two centuries to get that. People made a lot of money in New York Stock Exchange without a lot of stock being owned by the average person. You don’t need to have everyone and that’s the point I’m trying to make.

So it’s going to be successful with or without the participation of the vast investment public. It’d be nice to have them. We don’t need them in the process of happening even without them, just something to be cognizant of that. So other factors in that, does the average person own bond futures? I think not. And look how big the bond futures market is. Does the average person trading currency features? I think not. Look how big the currency market is. Does the average person trade in oil futures? Look how big that market is. So, and by the way, the derivatives market, I don’t want to compare Bitcoin derivatives because it’s not the right analogy, but the derivatives market is bigger than the bond futures market. Derivatives market is hundreds of trillions of dollars.

Does the average person trade derivatives? No, they do not. Look how big that market is. So I don’t think that the, the necessary condition of success is broad public adoption. Nice to have it. Eventually I think we’ll get it, but I’m not waiting for it personally and I don’t think I need it. Anyway, I hope that addresses that question.

Thérèse Byars: The last question is also related. Are you looking at FTX claims? Do you believe they will have an outcome similar to Mt. Gox’s claims?

Murray Stahl: Okay, am I looking at FTX claims? The answer is no. And I’ll tell you exactly what my reasoning is. So Mt. Gox, there was a hack. Some portion of the Bitcoin was stolen and we knew what that was. So what the management of Mt. Gox society do is, so it wasn’t every account that was broken into, it was just if you add up everyone’s account, X percent, whatever it was of the coins were stolen. But most accounts were in touch. So some accounts had no Bitcoin in it, some accounts lost some of their Bitcoin, some accounts lost no Bitcoin. Most accounts lost, no Bitcoins. Instead of letting just some accounts suffer, what they decided to do in Japan was they decided to socialize losses. Everyone had the identical outcome in terms of the loss.

That’s the way it worked there. So we knew what we were dealing with. We knew, okay, they socialized losses, we knew what the losses were, there’s going to be some bankruptcy fees, we’ll have to wait a certain amount of time. So the banks reclaim traded a discount appropriate large discount to the amount of Bitcoin we were likely to receive. We knew it was going to be a number of years. This is different. And the reason it’s different is, we don’t know what was there in the first place. We don’t know exactly how much was stolen. All we know was most of it. So when someone says is a claim that trading at a big discount to its value, well that might be true except we don’t know what the value is. We don’t know what the bankruptcy trustee is going to be able to recover and then there’s a further complexification because the Bermuda government has made the assertion that some of the claims are going to be actually seized by Bermuda government.