TKX Capital and Investing into Crypto in Asia with Chris Lee

Leong Chung Wei Bernard -

Fresh out of the studio, Chris Lee, co-founder & partner of TKX Capital joined us in a conversation about TKX Capital and his perspectives on how to invest in crypto projects and protocols globally in an uncertain era. Chris began the conversation with his background as the former CFO for both cryptocurrency exchanges: OK Coin and Huobi, and what he learned from meeting Warren Buffett in person. Next, he deep-dived into the mission, vision and investment thesis of TKX Capital and shared his thoughts on the current crypto market. Last but not least, he offered his thoughts on what great looks like for TKX Capital.  

"The first thing is that the crypto market is still quite small compared to the equity [market]. [The size of the crypto market to equity market is about] one to 120, less than 0.8%, not even 1%. So, some smaller projects are very manipulated. [It is a] tough market, and second thing is that a lot of people say the variation for crypto is Twitter driven. So when Elon Musk or CZ send out a Tweet, it can pump up the project by about 5% to 10%. Because each [crypto] project is like religion, people believe in you." - Chris Lee

Introduction

  • Chris Lee, Co-founder and Partner, TKX Capital (@ChrisTKXCap, LinkedIn) and Founder, HummingBirds Capital (main site)
  • How did you start your career?
  • What inspired you to enter into the realm of crypto and web3?
  • You held both CFO positions in OKCoin and Huobi and were the CEO of OKX.
  • Let’s do this chronologically, how did you get involved in OKCoin first and learn about running a crypto exchange?
  • After that, you went to Huobi to be their CFO, are there any differences in moving into a different exchange and what have you learned in that role as well?
  • As the CFOs for both exchanges, what are the responsibilities and does it include building relationships with the regulators as well?
  • You are one of the few key crypto people who went to meet Warren Buffett together in 2020 with Justin Sun (founder of Tron), what are the key words of wisdom you have learned from your meeting with Warren Buffett?
  • In your career journey, what are the most interesting lessons you can share with my audience?

TKX Capital

  • TKX Capital (main site, @TKXCAPITAL, LinkedIn), Crypto and Web3 Investing
  • To start, you have started TKX Capital. What are the vision and mission of the company?
  • How does it operate a full-service crypto investment bank? Who are the customers and what services does the firm offer for the customer?
  • What is the one thing you know about the crypto market that not many people know?
  • As stated on the TKX Capital site, there are three parts of the methodology: 1/ primary and secondary market strategies, 2/ hybrid approach and 3/ active treasury management. Can you elaborate on the approaches?
  • For active treasury management, what are your perspectives on DeFi as a yield-building mechanism?
  • What are the advantages of crypto projects adopting the strategies you mention?
  • How do you select the crypto companies to work with? What are the traits you look for in the founders and their teams? What are the red flags?
  • You have a strong portfolio of projects who are part of TKX Capital. Can you talk about some of these projects? For example, I see ERA7, a blockchain gaming company most active on Binance, and Polygon.
  • What are your reflections on the crypto crash in 2022 not focusing on any one player whether it’s Luna-Terra, 3AC and FTX collapse?
  • Given the regulatory pressure in the US is getting stronger with the EU leading the regulation and Asia leading the crypto innovation, what should be the framework for your company to engage regulators?
  • What is your mental model when it comes to the valuations of companies in this space?  Given the recent meltdown in the crypto lending market, the valuations have gone down significantly, how does it evolve your thinking in valuations?
  • What does great look like for TKX Capital?

Closing

  • Do you have any recommendations that have inspired you recently?
  • Chris Lee: Remembering a common friend and entrepreneur who passed away at 49 during Christmas 2022.
  • How does my audience find you?

Podcast Information: The show is hosted and produced by Bernard Leong (@bernardleong, Linkedin) and Carol Yin (@CarolYujiaYin, LinkedIn). Proper credits for the intro and end music: "Energetic Sports Drive" and the episode is mixed & edited in both video and audio format by G.Thomas Craig (@gthomascraig, LinkedIn).