Ep. 23- Cryptocurrency Security with Thomas Stanley

Our guest today is Thomas Stanley, President and Chief Revenue Officer of Chainalysis. Chainalysis is a blockchain data platform that provides cryptocurrency security and compliance. The revolutionary world of cryptocurrency and NFTs is changing the financial world as it evolves and becomes more prominent. Today we have the ability to handle everything in digital transactions, which creates more instantaneous transactions worldwide.  Having a system in place that helps identify legitimate vs. illicit transactions is what we discuss in this episode.

Host: Richard Bliss
Guest: Thomas Stanley
Podcast Manager: Kimberly Smith

Follow Richard Bliss on LinkedIn: https://www.linkedin.com/in/bliss/
Find Thomas Stanley on LinkedIn: https://www.linkedin.com/in/wthomasstanley/

Transcript

Speaker 1: 

Welcome to Digital First Leadership. The podcast that focuses on helping leaders and teams understand how to master the language of social media in today's digital first world. 

Richard Bliss: 

Welcome to The Digital First Leadership podcast. I'm your host Richard Bliss and thank you for joining me. In the past two years, as we've had this show, we've had the opportunity of having guests come on,  who are leaders in their industry, leading the way in a variety of different areas. And today is no exception. Our guest today is Thomas Stanley, President and Chief Revenue Officer of Chainalysis. Now  Chainalysis is a blockchain data platform that provides cryptocurrency security and compliance. So,  Thomas, thanks for joining me. 

Thomas Stanley: 

Thank you. It's an honor to be here to hang out for a bit. Honored. 

Richard Bliss: 

It is fun to hang out. We've known each other for quite a while. And so I think this is the first time  though that we've ever gotten together in this kind of format, isn't it? 

Thomas Stanley: 

Yeah, Rich. Usually I get to give you a hard time, but I think it's in reverse today. I'm excited about being your guinea. Yeah. 

Richard Bliss: 

Well, I appreciate that. Now, Thomas, one of the things for the listening audience that would be helpful is Chainalysis. You've been with Chainalysis a short amount of time, you've joined them as their  President and Chief Revenue Officer. But it would be really helpful, particularly in today's world of cybersecurity to help us understand, how does Chainalysis fit into the ecosystem of cryptocurrency today? 

Thomas Stanley: 

Well, first of all, Rich, again, thanks for having me here. So if you think about Chainalysis, think about the blockchain and crypto at its core, for it to realize its maximum opportunity, you need not only the enablement side, the technology that helps you enable the way companies use crypto and NFTs and do transactions and banking and finance and retail, et cetera. You also need the disablement side. You need intelligence and insight to bad actors that are doing things that prohibit the good actors from realizing the market opportunity. So here we are, Chainalysis is a SaaS based company that provides the software that gives true visibility and intelligence across the blockchain, both on those transactions we want to see go through that are truly trusted transaction. And those transactions that are fraudulent and where we can help law enforcement entities around the world take action where bad things happen. 

Richard Bliss: 

That's interesting because in today's ... I mean, blockchain's been around for a little while, everybody's heard of Bitcoin and that type of thing. But the circumstances in the world today, cryptocurrency is not going away, is it?

Thomas Stanley: 

No, no. It's not going away. When I was looking at this market opportunity, I thought about what is truly  revolutionary? And crypto is that. Your children and grandchildren, my children, grandchildren, they  won't care about traditional check ledgers and other ledgers. They won't care about caring around 60  Euro or pound or USD or you name it. They're going to want to do everything they can digitally. And so in this digital world, and I'm so glad you have this podcast platform, think about how much faster we can transact. I mean, if you heard the president speak from the Ukraine about how money poured in to help the Ukrainians because they knew they needed help. And they didn't have to go through four to five days of all sorts of red tape. People could move crypto funds in to help them buy the necessary supplies to help the citizens in the Ukraine. Ten [inaudible 00:03:40] you couldn't do that. 

Richard Bliss: 

Right. 

Thomas Stanley: 

We didn't have this technology available. 

Richard Bliss: 

And so Chainalysis is sitting in that space where then you can validate, protect. We mentioned the word compliance because there's a compliance need here also. So help us understand, what does that compliance mean? 

Thomas Stanley: 

So if you think about entities where activity is going on today, someone needs to make sure that transaction is coming from a trusted, reliable source from the source to the target. And we can give visibility that, hey, that is a legitimate transaction. That is not some phishing expedition of funds that are going to be identifying a target who means well, who's going to now have a ransomware attack or some other attack. So someone needs to sit on the software platform with the software intelligence to say,  see that transaction through, that is a trusted transaction. Equally so when people know transactions are going through, they may try to hop in there to do something illicit. How do we shut that transaction down? And so using Chainalysis software, you can do that type of work. 

Richard Bliss: 

Got it. All right. And so the type of clients then that are relying on this platform are financial institutions,  governments. I mean, who are we looking at that are really looking to use this? 

Thomas Stanley: 

Fantastic point. So, our user base today, we think of as the entire world. Our belief is that at some point in time, the entire world will go crypto. But in this earliest stages, you have to have the governments,  the regulators, the banking and financial institutions. So they've been core to legitimizing and [inaudible  00:05:25] blockchain and crypto to the mainstream. 

Richard Bliss: 

Got it. So in your role, because you've stepped into this role recently. And so one of the questions then is that, what opportunity did you see? I mean, you've kind of touched on it, right? It's impacting down the road, it's going to be something that's around for a long time. But you have traditionally come from an established, well established industry. You and I met at NetApp many years ago, a company that's been around for 25, 30 years. And you stepped into now an organization and an opportunity that's vastly different than where you came from. What did you see as you stepped into this role? 

Thomas Stanley: 

I saw speed. I saw technology relevance. I saw the opportunity to remove the intermediary. So if you think about when the concepts and capabilities around the blockchain of smart contracts. And so as you think about real estate, if you think about insurance, there's so many ways that if you could create a  smart contract that existed on the blockchain that allow two parties that agree to have a trusted environment, to just transact so much more seamlessly and faster than they've ever done before. 

Thomas Stanley: 

I thought about the person that has a ... now I mentioned Ukraine, but it could be any sort of need.  Someone can have a medical need and they need funds raised. And so creating a trusted platform for dollars to get to the place that are needed and it might takes several days. I thought about dealing with,  in the US, what we call the federal reserve. And that $300 a month that a family member's trying to get to someone else and they're not being taxed 10% of that $300. So instead of $270 making it to that person after four or five days, what about 298, 299, or almost $300 making it to that person in seconds.  And so I just saw this revolution and this opportunity to say, "How can we add speed and scale and trust  and transparency to the way people do business and make the world a better place?" 

Richard Bliss: 

I got to tell you, I certainly feel that. I bank with two major banks for a variety of reasons. And I moved  some money out of my business account to my personal account, the business is in with one bank, the  personal is with another bank. And they're like, "Okay, it'll take five days. And oh, by the way, you've lost  access to that money right now." 

Thomas Stanley: 

Right. 

Richard Bliss: 

As soon as you hit transfer, you don't have that money and it'll be five days until you get it back. And I'm  thinking, "Where's that money for the next five days? What are they doing with it?" It's not like there's a  truck and a shovel and they had to load one truck. It's not like dirt that they're moving. That just  happened to me this week, so I can certainly appreciate that. 

Thomas Stanley: 

And if you're like most folks, you probably had to pay a tax bill sometime recently. And you're sitting  here like 

Richard Bliss: 

Yeah. 

Thomas Stanley:

It's my money and it's sitting in one resource that I have a relationship. And I'm trying to get it to  another resource that I have a relationship. And I'm tied up into the arduous things that they do to make  that transaction happen. 

Richard Bliss: 

Yeah. Makes it a little rough. 

Thomas Stanley: 

Speed, scale, trust is what we're about. It's what we're about. 

Richard Bliss: 

In your role ... I got to believe that stepping into this role from a leadership standpoint, is your team all  present? Because today I think you're in the Washington DC office, is that right? 

Thomas Stanley: 

Yes, that is correct. I'm in the Washington DC office today, but team is around the globe. We're  operating in over 30 countries today because all these countries have the same issues. They want trust  and transparency in the blockchain. They want to be able to have smart contracts. They want to be able  to move funds around and support financial entities. And governments want to be able to tax. Think  about rich number of athletes and other individuals who say, "I want my professional contract in a  particular currency now, in a cryptocurrency." How does the government entity tax for that? 

Richard Bliss: 

Gosh. 

Thomas Stanley: 

So tax authorities didn't work with us and say, "Hey, Chainalysis, because it's digital, because it's on the  blockchain, and because it's always there to be viewed, can you help us with the software analytics to  know exactly what to charge Mr. Richard Bliss on his tax statement as he does business in crypto?" 

Richard Bliss: 

No, no, no. Don't tell him. Don't tell him. 

Thomas Stanley: 

That's what we're here for. 

Richard Bliss: 

I can understand that. Now as the team is growing, I know that you've got opportunities for those who  are looking to be involved with crypto. You and I have talked about this, the company's growing, there's  positions that are open. How do you build that culture? How do you identify and connect with these  individuals that maybe you'll never meet in person, ever? Maybe it'll be a while, but it might not be ever  that you meet some of these individuals. How do you start to build that and lead? Because you're really  good at that motivation, rallying the troops, setting that direction. So how do you go about doing that?

Thomas Stanley: 

Wow. I need to tell you a little bit of a story that ... people talk about the goods and bads that have  happened with COVID. I think one of the good things I learned on my career the last two plus years is  the people that are really good, it doesn't matter what environment you're in. If they can understand  the value proposition of the company that they're working for and how it lands at a customer, they can  do it on a virtual means, they can do it via video, they can do it via audio only. And they can certainly do  it having a cup of coffee, tea, lunch, or dinner. 

Thomas Stanley: 

And I think a lot of us grew up building relationships with clients that were too much to the ladder. It  was all about if I can build a relationship with the customer and do it over dinner, et cetera, I can go sell  them my product. What I learned during COVID is go hire people that are mission oriented. And in this  space is all about how do you really help the customer advance his or her business? If you can find those  kind of people. And you can tell them, we're doing something that is truly revolutionary in Chainalysis,  we're helping the world build trust in something that's here to stay. Which is crypto. And that you can  work with the banks, you can work with the crypto companies, you can work with the exchanges, the  government regulators to make something real that they all need to adopt. And so it's quite frankly  been easy finding folks that are willing to lean in. Sometime ago folks may have thought it was a risk.  Now they think it's a necessity. 

Richard Bliss: 

Yeah. I got to believe that is so accurate because it wasn't that long ago where crypto was just kind of  seen as the fringe. 

Thomas Stanley: 

Right. 

Richard Bliss: 

And some kind of, you're going to lose your money, you're going to lose your ... right. And now it is,  okay, it's at the ground floor, we're seeing enough ecosystem players like Chainalysis that are coming on  board that, oh, how do I want to be playing in this space? It's not an if, it's now when. 

Thomas Stanley: 

It is. And what I would tell you is, as much as it was viewed as on the fringe, you and I know how bad  news travels. I always tell people the top 10 worst places in the country to live or wherever, are also the  top 10 best. There's good and bad in all of it. And the same is true in the crypto world, less than 1% of  the activities we find are the bad illicit activities. Think about that, less than 1%. So as much as we talk  about all the badness, what you need to worry about, and it's true. The 99 plus percent are great things  that are possible because crypto exists and because we provide that transparency in the transactions. 

Richard Bliss: 

When you look for somebody to join your team, or you work with the team, you've had some  opportunity of working with some great leaders over the years. What do you look for as a characteristic,  as an individual who comes forward? I mean, because right now hiring somebody who has deep understanding of the crypto space is probably limited because there's not a whole lot of people. It's not  like you're going to have some guy who's got 10 years, 20 years of experience in this space. 

Thomas Stanley: 

Well, it's interesting. So I mentioned being mission oriented and you and I, we met at NetApp. You used  to work for a gentleman named Tom Mendoza. 

Richard Bliss: 

Sure. 

Thomas Stanley: 

Talked about building a company we'd be proud of, people we'd be delighted to be associated with,  folks that are like-minded and want to do good things. And so I've always said we can be aligned on the  mission and the goal, but we also need to do it the right way. And so I'm always looking for high  character people, folks that are intellectually curious. I remember having a conversation with my  daughter, she's going off to graduate school and got a few job opportunities. And I was talking to her  about, hey, don't just answer the question in the interview, have a dialogue, demonstrate intellectual  curiosity. So that's the kind of people I'm looking for. People that want to do something truly  revolutionary, that changes the world. And are willing to take a little bit of a risk. But it's all a risk, you're  just betting on you. Rich, you bet on yourself every day. Right? 

Richard Bliss: 

Right. 

Thomas Stanley: 

And so I like people that are willing to bet on themselves to do something that's never been done  before. 

Richard Bliss: 

And I like that, that betting on themselves. Anybody you can find who's willing to bet on themselves is  somebody you want on your team. Because you know they're going to stay on your team as long as you  continue to provide them an opportunity for them to be successful. And I've always believed that, it's  how I drive my own team. I like that answer. 

Richard Bliss: 

Obviously anytime we can take ... it's a joke here at the company at BlissPoint that anytime Tom  Mendoza's name comes up, it's a drinking game. We all have to take a drink. I've got my bottled water  here, so I got to take a drink because 

Thomas Stanley: 

Okay, I'll have a drink too. 

Richard Bliss: 

There you go.

Thomas Stanley: 

Here's to Tom Mendoza. I mean just in a fabulous person and leader. And again, I think, Tom and Rob  Salmon and the team, they're doing today, I think they knew they wanted a company that they'd be  proud to be associated with. But that starts with the people, folks talk about the culture you want to  build. And I say, "Who the people you want to be associated with? How will you know they have your  back?" I mean, as I'm building a team here at Chainalysis, I'm often making sure folks know I'll roll up my  sleeves and get my hands just as dirty as required to make sure we went together. And folks knowing  you have your back is something I saw at a prior company that stays with me. 

Richard Bliss: 

I think that's a really good foundational element. And that can come across no matter if you are in  person or you're in a virtual environment, if you're in a different culture, different country, doesn't  matter when you know that. I'm starting to see as COVID kind of winds down and we all start to go back  to work, I made an observation for somebody yesterday where they have had tremendous success at  being an influence in their company. And then I pointed out to them that you've not met in person  almost anybody you work with. 

Thomas Stanley: 

Yep. 

Richard Bliss: 

Right. Yet, it's becoming more and more aware that you have made an incredible contribution to an  extended team far beyond the people that she works with. But the people who ask for and seek her  guidance. And so I think that as all of us, as leaders, as we continue to move into this environment, I like  what you've said, is we used to think I had to be in person, I had to have lunch with them, spend a round  of golf with them. And now it's like, "No. Can we get on a Zoom call? And I can get to know you a little  bit. Let's talk." And that's hence why we refer to it as digital first. 

Thomas Stanley: 

Yeah, well it is. It Is. Can I just jump in real quick? 

Richard Bliss: 

Absolutely. 

Thomas Stanley: 

The customers are so well informed now. The one thing we all have in common is we only get 24 hours  in a day. And so how do you make sure whether that customer who can't meet with you in person,  when they get a few minutes online with you, video conference, et cetera, how do you make sure you  squeeze out every ounce of value for them? And they really appreciate that. And so I'm trying to make  sure I hire people that go, time is precious and when the customer or any audience spends it with you,  make sure they get a great return on their time with you. 

Richard Bliss: 

And that is often done through a Zoom call rather than a, hey, let's take two, three hours out for lunch  or a dinner. Absolutely. And that's great. That's a great way to wrap it up.

Richard Bliss: 

Thomas, I want to say thank you very much for your insights, both on Chainalysis, the crypto space, as  well as your own leadership insights. It's always a pleasure to talk to you. You can hear some crows in  the background, I don't know if you can hear that. Because I have crows that show up about this time  every day, so it's always fun to have them my tent here, in my backyard. Thank you very much. People  

can find Chainalysis at Chainalysis.com. Is that right? 

Thomas Stanley: 

That is correct. Rich, thanks for having me and I appreciate the time together. 

Richard Bliss: 

Oh, it's always been good. And so you've been listening to this episode of The Digital First Leadership.  My guest has been Thomas Stanley, President and Chief Revenue Officer of Chainalysis. If you are  interested in finding out more, I encourage you to reach out to Thomas on LinkedIn or go check out  Chainalysis.com. Thanks for listening. Take care. 

Speaker 1: 

You've been listening to Digital First Leadership, the podcast where you learn to leverage and build your  expertise on digital platforms. For more valuable tips on mastering the language of social media,  subscribe to our newsletter at BlissPointConsult.com. If you'd like to stay in touch, feel free to add  Richard on LinkedIn and join the conversation.