Transcript 0:00 All right, good morning and welcome back to the VIPC. Today is September 3rd, also my birthday, and it's post Labor Day. Hope everyone had an awesome weekend. 0:08 Um, I'm Jessi Newior from Private Aviation Safety Alliance, here with your co-host, as usual, Preston Holland from Prestige Aircraft Finance. And we have a special guest today. Welcome to the show, Kyle Patel. 0:19 Kyle, welcome. Hey. Thanks for having me. Wonderful seeing you guys. Absolutely. Us from his brand new house that he just moved into. So he's in his office. First podcast from the new office. [laughs] That's right. 0:33 Yeah, first anything from the new office actually, except this is my second cup of coffee, so this is good stuff. Awesome. Well, we're honored to have you. 0:41 Um, just to give a teaser on the show today why we have this special guest, Kyle's with BitLuxe. 0:46 Um, there's been some new things coming out on Bitcoin, stablecoin, and we think it's really important to the industry or could be really important to the industry eventually. 0:54 So that's why we have Kyle on today, to help us with that discussion. Um, so really looking forward to this one. Awesome. So we'll kick it off with the first story. Jessi, uh, and this is, this is totally in your camp. 1:08 Um, we're talking about safety. There's some news that's come out of Vista. Jessi, tell us about it. Yes. So this week there was an article published about, um, VistaJet in Europe has this enhanced, uh, training program. 1:20 It's EBT, I think, standard. There's also an EBT enhanced. Um, I have to go a little bit back in history to explain what this thing is, why it actually matters, why it's a big deal. 1:31 Um, so in the United States, we don't have standardized training programs. You as an operator have to come up with your own training program that the FAA approves, and then you run that through the training provider. 1:43 It's kind of a mess. Um, we're trying to streamline it in the U.S. We do have standardized training that's coming, but we don't have it yet. So that is one thing that Europe has already done that we have not. 1:55 So I'm giving that background because it's important to understand that before going into what's going on at Vista. 2:01 So not only does Europe have standardized training for aircraft, they also now have what's called an EBT program, and it's only been used by airlines thus far. 2:10 But essentially, in a nutshell, it's taking training from your standardized checklist, standardized training programs, and enhancing them with real-life data and information from pilots. 2:22 So instead of sitting there and doing the same training things over and over again and not really addressing the actual safety things that need to be practiced more and more, they're using real-life data for that training instead of just the standardized checklist. 2:35 So in a nutshell, that's what it is. Sorry for the long explanation, but I think it's really cool. 2:40 Wish we had it in the U.S., but I think we're a little bit behind the curve 'cause we don't even have standard training yet. 2:47 So Jessi, what, what could this mean for, I mean, w- what are the steps that need to happen for this to come to the U.S.? 'Cause this seems like, seems a little bit like a no-brainer to me. 2:56 I mean, when I think about operator complexity, I mean, there's, there's a lot of complexity in the FAA system. 3:03 Like, what type of hurdles have to get overcome in order for this to come to, something even similar to come to the U.S.? Yeah, I mean, I think what's happening right now is that operators are doing it on their own. 3:13 You know, instead of, you know, you talk about a NetJets or a Flexjet, someone that has access to thousands of pieces of information, and they know what their pilots need to train on more, let's say landing an Aspen or, uh, getting into Teterboro in a circling approach. 3:26 Those are things that those operators already know that they need to do additional training for. 3:32 The E- EASA has formalized it in a way that FAA can't yet because we don't even have a standard training program, much less this new regulatory hurdle to overcome, which would be enhancing it with data. 3:44 Um, so I think a lot of people are doing it. I don't know what they're calling it necessarily, but it is happening. Um, it just would be great if we had it here, but we don't currently. 3:55 So I have, I have a s- I have a small opinion on this, is that we are in the land of the free, number one, right? 4:01 So I believe hardcore in having the ability to incentivize things that we think are in the best form and best shape to do things. 4:10 Legislating, mandating, and requiring companies to follow some level of protocol that might not work out for the best interest of all the parties involved is, it, I don't know. 4:20 I, I think there's a different way other than getting regulators to try and pass a million different things, which in our bureaucratic nonsense is gonna be slow- [laughs]... inefficient. 4:28 W- when we all know even, even, even your FSDOs take forever to approve stuff. How long does it take to go, to go through conformity, even if it came off of another certificate? Yeah. You know what I mean? 4:39 So, so when you're moving, if, if you have to have this huge platform that's government regulated, government mandated, and not incentivized in any other way other than, well, if you don't do it, you're not gonna get insurance, you're not gonna be able to operate, that seems to be like, you know, it, it could cause a little bit of an uproar in my personal opinion. 4:55 I think there's probably a better way to do that of saying, "Hey, what if we come up with a standardized system that with suggested data points from all of your s- you know, whether it's customer, you know, customer CSR surveys, pilot surveys. 5:06 You could probably get surveys from ground crew even, and roll out some sort of national incentivization plan to where your insurance levels are dropped, or Argus could implement something like this, or Wyvern could implement something like this. 5:19 Like, I don't know that we would need regulation to be able to, you know, promote standardized safety protocol across the industry. Yeah, I mean, that is the thing with EASA. This is an optional program. 5:30 Not even all the airlines have adopted it yet in, in Europe. Um, but that's also what kinda makes the news big for Vista is that they voluntarily have chosen to go to this sort of more enhanced training program. 5:42 Um, but a- again, I, I think there's probably a lot of U.S. operators that are doing it. If you're listening to the show, we'd love to have you come on and talk about your training program. 5:49 Um, but again, it's, it's using real-life data instead of just relying on the old ways that we've been doing things. It's nice to see some innovation and movement in a new direction. 5:59 Did they disclose at all how they're collecting any of that data? What exactly is the data points that they're training on?So that I have not dug into details of that. 6:07 I know most of the information that they're using today is airline data because the airlines that are participating in Europe are all, you know, commercial carriers. So th- that does kind of change things a bit. 6:19 You know, obviously charter Part 91, totally different kind of flying than flying out of busy airports all the time. You know, we're doing Aspen, we're doing the, you know, weird uncontrolled airfields. 6:30 So they're not getting that data yet, but that was in the press release with Vista is that they want to get there eventually where they're using their own information and their own data points to do the next level of this, this EBT program. 6:43 Interesting. 6:43 I wonder, I wonder, because I do know that Vista has p- had a long-standing, um, staple of having some of the most well-trained, articulated, cohesive staff from their operations department all the way to the flight attendants, pilots, you name it. 6:58 So I would be curious to see if they're gonna- they're- they could branch that off and create that standardized protocol that we were kind of talking about and doing that on their own too, you know? Yeah. That'd be cool. 7:09 No, ha- hats off to them. Uh, we love to see people doing things they don't even have to do, uh, in terms of safety, at least I do. So I'm, I'm happy to see them, them doing that. 7:20 Well, I think that brings us to one of our audience's favorite segments, which is Mile High Madness. 7:26 Kyle is new to the show, so, uh, this is where we, Jesse and I, find something crazy from social media and we share it on the show. And, uh, I have got one. I actually had a friend send me this, and, uh, 7:39 Kyle, Kyle and I are both gonna rant on this 'cause we've had many conversations about this. 7:44 Um, but once again, we have another Instagram influencer trying to tell us why we should buy this Global 6000 and make a ton of money on it. So let's watch it. Hi. 7:55 This is a Bombardier Global 6000, an ultra-long range heavy private jet that can fly from San Francisco to Paris nonstop. Listing price is $25 million for a 2015 in great condition. Let's go ahead and run the numbers. 8:06 The cost to charter is $13,000 per hour, and that include- Kyle, Jesse, is $13,000 per hour as a wholesale rate realistic for a Global 6000? Jesse, you first. I don't even know these days. 8:23 [laughs] Sorry, I've been out of the charter game for a bit, but, uh, no. I think per occupied flight hour, yes, I think that's totally reasonable, and it's probably- Okay... 8:32 a little bit more in terms of actual occupied seat hour. But that is not the, what the owner will receive, and it is not proportional to what hours will be flown. So- Right... 8:45 in that 13 to $17,0000 an hour range, that does not include any repositioning. That's exactly what customers are paying. But that doesn't mean that's what the owner is getting. You know, your expense- Yeah... 8:57 per occupied hour is gonna be quite high. Just wait. Just wait. This get, it gets better. [laughs] Which fuel, but not the crew salary. 9:02 Let's assume it gets booked 40% out of the year with an average- That's, if you missed it, that includes fuel. So he's saying that 13,000 net of fuel. Wrong... flight time of three and a half hours per booking. 9:15 This is gonna bring in $6.63 million per year. Now let's break down the yearly costs. Crew salary is gonna be $500,000. FB- If you're flying that much, there's no way you're getting away with two crew. Just no way. 9:27 [laughs] Yeah. FOPs are gonna be $150,000. Maintenance, 750. Detailing, $450,000. He's, he's calculating ma- mai- detail- who's paying $450,000 a year- [laughs]... for that level of detailing? 9:42 [laughs] I should open a detailing company. Insurance, $30,000, and catering, $100,000. 30,000? Insurance is the only thing, insurance is the only thing he might have gotten decently close on a really solid fleet policy. 9:55 But that's- For, for 135- I mean, that's gotta be- No, I think it's way more now- Yeah, no... for an aircraft of that size This brings our total operating cost to $2.14 million a year. 10:04 We're gonna trade in our Citation X and use a federal loan to finance the remaining 20 at a 6.5% interest rate. You're not, you're not getting 6- [laughs] If, unless you are a billionaire. Federal loan? 10:14 [laughs] And I'm not sure what federal loan program you're signing up for. What does that mean? 'Cause it's Canadian. Can I get one of those? [laughs] Like, yeah, seriously. 10:21 Well, it's Canadian, so you're not gonna qualify for... 10:24 There's this weird export loan that you can get where if it's made in the United States and you export it, like you can get this, this weird loan program, but it would not- Yeah... 10:34 this doesn't quali- it's a Canadian airplane. Um, so that's problem. At 6.5% on a 100% 135 aircraft, not gonna happen. No. Yeah. Which is gonna give us an effective monthly payment of $149,000. 10:47 This brings the total yearly operating cost to 3.93 million, with a total net profit of 2.7, even with just a 40% utilization rate. 10:55 We're also gonna register the aircraft in Delaware, saving about a million dollars in use in sales tax upfront. What color should we paint ours? I love, I love, I love these videos. It's just, it's so good. 11:09 I had a, I have a, I had a friend who's a, uh, he's a jet card flyer, and he sent it to me. He's like, "Hey, I'm thinking about buying this." And I was like- [laughs]... "Absolutely not. You're not-" Do it... 11:21 "doing that." Do it. [laughs] Do it. Do it. PSA for anyone buying an aircraft to offset their cost, it's not going to happen. You're not going to make money. 11:29 I don't care what plane it is, I don't care who's managing it, you're gonna offset s- your cost a little bit maybe in a really good situation. You are not going to make money on an airplane. 11:37 I'm just putting that out there. Unless you buy three. Yeah. You could buy three- [laughs]... of the exact same ones, and then you have a chance at being slightly profitable. Fleet operations. Maybe. Mm-hmm. 11:48 But you never get to fly it personally 'cause it has to work all the time. No. Yep. [laughs] Right. Yeah. 11:53 And charter- Something else I wanted to point out that was a little strange about that is that he said the average, the average flight on the Global is 3.5 hours. Average? 12:02 Your daily minimums are two hours, and the average flight time on that's five and a half hours. I mean, if you're, if you're using a $25 million piece of machinery to go from Miami to Atlanta- Yeah... 12:12 we got a problem.Oh, yeah Yeah Another- Yet another- Another day Yet another Instagram influencer trying to dupe us into, uh- [laughs] I- i- into thinking- Not gonna even-... you can house hack a jet. You cannot. 12:26 [laughs] He's doing pretty good. He just got put on this, on this show. [laughs] That's really true. He just- [laughs] We just gave him free exposure. Dadgum it. [laughs] Dang it, what would you do for us to- [laughs] 12:37 No kidding. All right, Jessie's got a hilarious one from one of our favorite, this is a multi- uh, multi-offender Mile High Madness, uh, Instagram account. Yeah. I love FBO Memes. 12:49 It's probably my favorite business aviation page. Again, don't go there if you are easily offended, because there are some offensive things. [laughs] But here we have a Latitude. Latitude- [upbeat music] [laughs] 13:03 The mute's awesome. A reminder, in Scottsdale, Arizona, chock every single wheel. Maybe put two on it. I don't know, but this is what happens when you don't chock all your wheels. [laughs] I love reading the comments. 13:20 Yeah. No latitude, no- That jet's now requiring five chocks. [laughs] Oh, yeah. Well, oh, this is interesting. So I didn't know this was a thing. 13:33 All right, so Sovereigns, Xs, Latitudes, Longitudes, they easily weathervane. New term. Interesting. [laughs] Thanks mbeard91. [laughs] Uh, shout out to you if you're listening to the show. 13:45 Uh, we'll s- we'll send you this clip so that you know that you got a shout out. But that is awesome. I mean- [laughs] The, the PC-12 sitting next to it is just firm. It's totally fine. [laughs] It's fine. It's fine. 13:56 Latitude is just dancing. Just got a little more, little more tailwind to play with. Some, some line guy, uh- Yeah... went, went crazy. So all right. Well, we're gonna get to the meat and potatoes of this show. 14:11 Uh, today we've got Kyle on. Uh, we introduced him a little bit earlier. Kyle is a good friend of mine. Uh, he is the founder and CEO of BitLux. 14:19 They are a charter broker who has been crypto forward for a lot longer than anyone knew what Bitcoin was. Ah. So when your grandma started asking about Bitcoin, you knew that you were too late. 14:32 Um- [laughs] But Kyle knew way before your grandma started asking about Bitcoin. Ah. And we're here to talk about the Genius Act. Uh, the Genius Act just passed, um, through Congress. 14:42 It was actually sponsored by, uh, the Tennessee State Representative, um, from my hometown, or from, from where we're at in Chattanooga, uh, Bill Hagerty, really championed this. 14:53 Um, Jessie and I have been doing a little bit of deep diving into the Genius Act and what it means for crypto and specifically stable coins. 15:01 And for those listeners that are listening and, and you kind of rolled your eyes when we started talking about crypto- [laughs] I think the big thing that, that we're big about on this show is, is being progressive and figuring out kind of what's next for the industry, something that not a lot of people are talking about. 15:16 And Bitcoin and Ethereum, they're big s- those are kind of big, scary, volatile things. This is not, this is not exactly what we're talking about on this, on this podcast. 15:26 Today what we're talking about is stable coins and what it could mean for operators and brokers, um, KYC, things like that. So, uh, Kyle, thanks for coming on. I'm excited to, uh, to have you here. Yeah. 15:39 Yeah, no, I'm excited to be here. I, I, I'm glad that this is getting some, some level of coverage. Um, you know, uh, ear- early on it was kind of a, a very, very weird, weird thing. 15:52 I guess I, I, I started in the crypto space I guess in 20... I, I rolled my eyes because it has actually been a long time, and I don't feel like it's been that long, you know? But like- [laughs]... 16:02 it's been, it's been a while. Um, so 20, you know, the first, the first crypto anything we did was in 2017, did it under a different company, and then was able to- Hmm... kind of scale that out. 16:13 And, and, and I saw something that other people didn't. You know? 16:16 I was like, "Okay, well, I, you know, this is a clear path out of the roadblocks that we face every day in, in charter and jet cards and even, even fuel releases, dude. I, it's nuts. You know? 16:27 [laughs] It's, it's just crazy the barriers that we have on existing financial systems, especially if you've got the cash on hand, which that's what, that's what, that's what I couldn't wrap my head around. 16:36 I, uh, uh, I can jump in a little bit into that a little bit later. 16:39 But, um, you know, touching on the, on the Genius Act, I think it's provided a very stern framework, which is all that it is, is just framework and legal definitions of what stable coins are, how issuers of stable coins need to be able to, um, operate in the space. 16:59 And it's also regulated by the banking industry, not finance industry, which means that it h- should have quite a bit more, uh, fluidity in the way that things, if something needs to adapt, it can do, we can do that a, a lot more fluid, uh, in, in the future, which I, I don't think so, 'cause it's, it's pretty, it's pretty well-worded and very solid in its base now. 17:22 So, um, some things that I thought were really interesting and really important too, especially more than anything else, um, kind of, y- you know, the, the American way of business, 17:34 for better or worse, um, I'm completely against it, but we've seen this with FTX, we've seen it with, uh, you name the company that has ever failed, especially in, in aviation, Aerovanti. 17:47 Uh, I, we could go on for days of, like, leverage to the moon, cross your fingers and hope this works. 17:54 And you're putting customers at risk, you're putting investors at risk, you're putting yourself at risk, you're putting government agencies, a huge load on government agencies to be able to do this investigation kind of stuff. 18:04 Um, and, and I, I, I say all that because one of the most important things is that stable coin issuers are not allowed to rehypothecate funds. 18:11 Specifically- Can you- Means- Can you explain that to those of us who don't- Yeah... understand the word- Yeah... rehypothecation? And get really s- [laughs] Yeah. Yeah. And really simple too. 18:19 I mean, just explaining even, you know, stable coin is a pegged, you know, US dollar, two dollar number. You know? It's no longer this volatile- Yeah... coin. YeahYeah. Yeah 'Cause, 'cause I think- So stable-... 18:32 I think when people think about cryp- I think when people think about crypto, they think Bitcoin goes zoom. Like, it just- [laughs]... goes up and to the right, and it's incredibly volatile. It does. 18:40 And you wake up one- It does go up and to the right. 18:42 [laughs] And, and w- and one day it's, it's $10,000 up, and the next day it's $10,000 down, and there's a lot of speculation versus kind of what the Genius Act puts in, in kind of the sta- in, in the form of stablecoins. 18:56 Yeah. So stablecoins are not supposed to be volatile at all whatsoever. They were never built to be that way. Um, so I guess starting from the very beginning, right? 19:05 A stablecoin is defined as, you know, a US dollar-backed digital currency. And when I say US dollar-backed, that means that it has to have a matching pair on the other side, right? 19:18 So let's say for every dollar that I give you, Preston, I ha- digital dollar that I give you, I have to have an easily available liquid asset that is sitting in a bank account or a trust or some, some of them can do, you know, like, interest-bearing accounts. 19:36 Like, I know that, you know, Circle puts some of their funds in REITs or they work a lot like, like- You can put it, you can put it in, you can put it in Treasuries too, I believe. I mean, it can- Yes... 19:47 it, it can, it has to be kind of the very stable, you can get your money. And- Yeah... the way I, the way that I, uh, I, I listen to this podcast, Art Laffer, uh, from Nashville. 19:59 It's interesting that Tennessee is kind of at the center of this crypto world right now. Art Laffer's in Nashville. He's an economist. And he talked about the idea, like, I have a dollar bill here. 20:09 Like, this is a paper representation of a dollar, and the original idea was that that equated to a certain amount of gold held in a reserve bank. 20:21 And stablecoins, in my understanding, is kind of like how the paper is worth $1, and there is something else that is backed with it by a dollar. 20:31 Stablecoin is like the green paper, and there is some, there is a real dollar backing it, just in the digital ecosystem. Well, it's no longer the gold standard. Yeah, and to be fair- Now it's-... 20:39 it's no different than the numbers that are in your bank account. Yeah. Yeah. Yeah, it's, it's the exact same thing as, as, as what... It's, it's, it's probably even more, 20:52 it is more regulated than your checking account, which is fantastic. Mm. Right? Because let's say that I go make a million dollar deposit into my bank right now. I, I'll give you a great example. 21:01 We just had a $500,000 deposit on the Jet card today. That got put into our bank account. We stick it into, you know, a, a safe money market account where our funds are readily available. 21:11 Now, does the bank actually put those funds aside for us? No. Those funds are used for either loans or it could be for y- whatever it is that banks do with your money, that's what they're doing with it. 21:23 However, stablecoins, you c- as an issuer, meaning someone who creates a stablecoin on a blockchain, which is the software that is running all of this stuff, um, they are not allowed to, and this is where the rehypothecation comes in, they're not allowed to take that original dollar and invest it or change its form in any way that could hinder the already issued funds. 21:51 So a great example of this would be, um, there was something called Luna, like a UST. They were a stablecoin issuer, and what they did, which I thought was really, really smart at the time. It was very smart at the time. 22:05 Um, and w- we all learned a pretty hard lesson from it. 22:08 But what they did was they issued funds and backed those funds with Bitcoin, and the protocol would, you know, based off of how things were going in the market, would buy or sell or, you know, delete, you know, stablecoins. 22:23 And when there was a big market shift, ultimately it became de-pegged because it, it lost its peg from the assets that were in the account that was backing this multi-billion dollar thing, and everything kinda came-- Well, didn't kinda, it definitely came crashing down. 22:41 So the stablecoin, the Genius Act, it kind of prevents... It doesn't kind of, it definitely prevents issuers from doing anything that would remotely involve any risk with a digitally issued currency. 22:54 But again, it's, it's the same idea as the dollar that's in your bank account. It's not sitting in a bank account. Mm. It's not sitting in a vault. It's a number on a screen, and it's sitting inside of a database. 23:05 This is even more secure and stable than that. 23:09 So, and another, another thing that en- is in the Genius Act that I thought was really, really cool is that stablecoin holders get priority in the event of any kind of liquidation claims or any kind of issues that may arise from financial collapse from an issuer. 23:25 So let's say Bank of America decides to issue stablecoin. 23:29 If for some reason Bank of America gets into any kind of trouble, you as a stablecoin holder get priority access to reclaiming those, you know, your value out of that institution over other holders, which is crazy to me. 23:43 So that, in, in, in reality, what it's saying, in my personal opinion, is that it's, you have a better option and a safer option to hold digital-backed dollars rather than on-chain dollars, rather than funds sitting in your bank account. 24:01 So the one piece of this though I did see is that it's not FDIC insured, so there's a little bit difference there in terms of security. Correct. Yes. 24:11 Stablecoins are, are, they're not considered deposits, so they can't be covered under the insurance system. However, they can be issued with FDIC-qualifying banks, right? So you've still got, you know, you as, as... 24:27 If you're depositing money into a bank account, they're not going to issue you a stablecoin, right?But you can have stablecoins issued to you by someone who is FDIC, which means you've also got, you know, that financial institution has a certain level of insurance that's associated with it at a federal level. 24:44 Which no, no matter what way you dice it, even with FDIC, I, I think it, the insurance is only up to what? $250,000 it seems like. Right. Like we're in private aviation here. 24:54 [laughs] You know, on, you know- And that's a great, uh-... the insurance doesn't cover much... movement towards, okay, you know, we're at an aviation show, why are we even talking about stablecoins? 25:02 So I guess, you know, tell us what you think this could change. Yeah. So I'm not really sure that it would change a, a, a ton. 25:11 Um, I will say that we have been accepting stablecoins for the last eight years now, and, uh, going on eight years. 25:17 And it's, it's hopefully what it does is it drives a certain level of confidence and comfort for people who need access to their liquidity, um, you know, without having to go through the normal, typical channels, right? 25:29 So historically, ever since I was a kid in aviation, um, which has been a very long time, we haven't been able to process transactions on weekends. 25:39 You can't post-process transactions Monday through Friday, 9:00 to 5:00, 9:00 to 4:30 Eastern Time, excluding federal holidays. 25:45 Despite wherever you're at in the, in the world, it doesn't matter if you're in freaking Uganda, that, like it was just Labor Day here, but try getting a wire on Monday. Mm. It's impossible, right? 25:56 And it, and if you're, if you're, you know, one of these cobalt exporters, what are you supposed to do? Right? So e- especially if you have an AOG and you don't have... 26:06 There's a million different circumstances where this applies. Actually I can a- we can apply it to about 45% of our entire business, where the traditional banking system continually fails customers who need to process. 26:17 They have the money, but it's inaccessible due to, you know, the current TradFi system, traditional finance system. Um, so I think this is a way to kind of circumvent that. 26:26 And then historically, if you wanted to go outside of using, let's say you want to use your own money at 2:00 AM on a Sunday morning, you gotta pay a 4.5% fee. Mm-hmm. What? Yeah. That sounds... Just listen to that. 26:44 [laughs] That's crazy. I think that's the game changer- Yeah... 26:47 is that it could remove transaction costs, and we could move to a place where we don't need credit card holds, pre-auths or any of that stuff anymore because, you know, there may be platforms that can guarantee payment. 27:00 Yeah, absolutely. And I think there's, there's already platforms out there in the crypto space that can kind of do that. 27:04 It, it holds your funds as, as kind of a line of, or a letter of credit to be able to put you in good standing, um, you know, with whatever financial institution that you're working with. 27:13 And, you know, I will say that it's, it's not, uh... Th- this kind of stuff happens all the time. The most notable one that I, I remember was in 2020. Um, it wasn't stablecoins that was used, it was Bitcoin at the time. 27:26 Um, I would, I will absolutely throw up if I tell you what the price was and how many Bitcoins were received for this particular flight. 27:32 But someone was in an emergency medical condition because they had gotten pneumonia from, like, they got COVID, they were put on a ventilator, they got pneumonia. They were in western Russia. 27:41 There was very little medical support whatsoever. 27:44 Um, and this guy calls, this is like 4:00 AM on a Saturday morning our time, and he's like, "Hey, like I don't, I don't have a means of getting, getting my mother to Norway. She has insurance there. 27:57 She needs to get to a hospital there." 27:59 He had Bitcoin, and we were able to dispatch a, an air ambulance flight from France over to western Russia, uh, and we were able to do this w- I mean, within 45 minutes we were able to- Mm... 28:10 get a crew moving, and then within about four and a half hours, there was the, an aircraft there on the ground with medical staff. I'll send you the video, Preston. It is freaking cool. 28:20 And she got, I mean, she was with the proper medical care within, I think it was nine hours. 28:25 Nine hours of the time that he said go in the middle of COVID, where this wouldn't have been possible without, without the use of blockchain technology. 28:34 So is that, so, so the way that my friends that kind of do traditional finance, right? 28:41 I've had, you know, friends ask me for a charter trip on a Saturday, and I connect them with a, with a broker, and it's like, "Okay, let me put a hold on your credit card just in case you don't wire me on Monday. 28:54 And I'll charge you on Monday when the wire doesn't hit, and maybe it does, maybe it doesn't, like we're not really sure. And I have to pre-auth your credit card. 29:01 We're just gonna tie up the 50, $80,000 on your credit card." And if I hit it, not only is it, it's, even if it's not, it's not 3%. 29:14 Like people think, oh yeah, credit card processing, like 2.5, 3%, but private aviation's such a high risk as seen by card processors. It's like four and a half. 29:23 I think I've even heard of like 6% credit card processing fees for private aviation. Like, I guess, I guess here, what is the path towards me? I don't, I mean, I have some crypto, but not enough. 29:38 Like, I don't have like my, a lot of my liquidity in crypto, and if I needed that trip, like how far are we from me, non-crypto native, to be able to utilize that type of technology? 29:52 Or maybe my bank account is half, half stablecoin, half cash, like in my deposits. Like how, how s- how close are we to that? Which is gonna, I think, remove a lot of the risk in the broker to operator transaction. 30:06 Or the alternative is you as a broker, like the operator requires payment now, even if you're on a credit card auth and you're gonna take a wire on Monday, like you now have to float that transaction. 30:19 Like how far are we from kind of non-crypto native consumers being able to utilize some of this technology?Well, define, define crypto native. 30:29 You know, I think, I think what it comes down to is being a re- having native relationships, period. Right? 30:35 If you have a good relationship with an OTC partner, which is basically like a trust or, you know, a crypto issuing bank, um, I mean, if I, if I needed a million dollars tomorrow, I could go, I could go ask them, and they, they have immediate access to my funds. 30:47 They know it's there. They know they're good for it. 30:49 And if I need to send out a text message, they send it-- they can send stablecoin to whatever wallet that I deem, you know, necessary, and they issue me that line of credit. 30:58 So there are creditors out there who are issuing these lines that are on-chain lines based in curren- you know, digital currencies that you can use backed by your own credit rating as well as your own dollars. 31:10 So you could, you could use it kind of like a secured credit card. Is there something that's mass marketed that's easy to just click a couple buttons to get? No, I don't think we're there yet. 31:20 We're probably about three to four years out from that, and if you're doing that, there's also gonna be processing fees because that's part of the game. 31:27 Um, but I think, I think there's a way where, you know, stablecoin, um, holders or not issuers, maybe even issuers could do that, you know, where they can, they can have some sort of a debt or credit feature, uh, that's easily accessible for, for that opt- you know, for people who decide to use that. 31:49 So Kyle, you have been accepting crypto, you've been paying in crypto. You know, you, you are a digital money native company. As you know, a lot of private aviation companies are not that way. Right. 32:06 Um, w- how-- what, what would be your suggestion? Maybe, maybe let's start with operators, right? 'Cause they're the other side of your transaction. Mm-hmm. 32:13 What would be your recommendation to operators to, uh, be able to start getting their companies ready to accept this type of payment from brokers like you or other brokers that have kind of adopted this technology? 32:26 Well, I think the first step would probably be just working strictly based in stablecoins. I think that's step one. It's super easy. And you know, what it comes down to is education. Education over legislation, 100%. 32:40 And what I mean by that is that crypto can actually be extremely foolproof, and it is so, it is so foolproof that it's, you know, three clicks of a button, and literally you have to write something down on a piece of paper and store it in a safe or get it tattooed on you. 32:56 You know, I mean, it's, it's literally that foolproof. Um, in saying that, I, I think the largest thing that people should be able to do... I, I just had an operator recently. 33:06 We, we did, and it was, again, over, over the weekend, it was a three hundred something thousand dollar flight, and, um, it was, oh man, what was it? California to Dubai. 33:15 And I told the operator, I said, "Listen, uh, you know, we can, we can issue you a credit, you know, like a, I can show you a credit statement that says this wire will go dispatched on Monday," you know, 'cause they wanted proof of funds. 33:26 I said, "Or I can just transfer you the stablecoins right now." And no joke, the CFO emails me back and he says, "Sorry, we don't deal with fake money." 33:34 And I was like, "Dude, I'm telling you I can pay you right now, [snaps fingers] pronto." You know what I mean? We don't have to deal with any of this. 33:45 So I just thought it was an interesting comment, and this was, this was, this was four weeks ago. I, I just thought it was hilarious. 33:51 So that being said, uh, I think the first step is to being able to create a simple wallet, a very simple wallet, whether it's on a CFO's phone, a CEO's phone. 34:01 You could do it using Ledger, Trezor, um, and most stablecoins are run on Ethereum, so just watch a five-minute YouTube video on how to do it. 34:10 The wallet addresses, they look very complex, but so does your bank account number. Just keep that in mind. No one ever remembers that. You know? You have to copy and paste it every time. 34:20 [chuckles] It's the same- Yeah... thing with a crypto wallet, you know? And, well, and, and like a wi- wire fraud is real. I mean, like- Yes... 34:27 when you hit go on a wire, and if you have a fraudulent-- on the other side, if, if it's fraudulent, then you're SOL, right? Like- Mm-hmm... 34:35 I think that that's, that's the big thing that is a common misconception is, "Oh, this is fake money." But like wires are not that far away from fake money. Yeah. 34:44 And if it goes to the wrong place, like tough luck, right? That money's gone. Yes. Yep. Yeah, and that, that happens quite often. 34:51 You see this-- I'm sure you get these emails of like these invoices from operators or finance companies, and they're like, "Oh, hey, I changed our direct deposit address. Here's the invoice." Like, man, you know? 35:02 And I think private aviation is a prime suspect simply because our average transaction is very, very high. 35:07 So that being said, one of the safety, security, safety and security best practices that anyone could do is publicly list available and safe wallet addresses. You can post those on your website. 35:18 You can have those, you know, do... What, what we do is a 2FA, right? The equivalent of a 2FA. So basically when someone's ready- Two, two-factor authentication for those- Yes... 35:27 people who are still ca- still catching up. Yeah. So, so what we do is we make sure that two people or two representatives from our company send to the exact same wallet address at the same time. 35:38 This way, there's not some, some... It, it, it pr- it prevents what's called MITM, which is man in the middle. 35:46 So there could be someone in the middle of your conversation saying, "Hey, deposit it to this wallet address," or, "Deposit it to this wallet address." 35:53 So what happens is that, you know, when someone wants to process a crypto transaction, the wallet that's posted into their account or into their chat or into their email is the same one that's published on our website, or it's the same one that the manager also sends. 36:06 So this way they get a very, you know, clear message of this is the correct one, this is easy to use. 36:13 So, um, I don't know how many times people have reached out on, on pretending to be Bitlux customer, you know, like a Bitlux representative. 36:20 I have heard of one, actually, it was almost $70,000, and it wasn't crypto, it was wire. 36:26 Someone had gone through the sales process, gotten a contract from us, pretended to be us, and then changed the bank account information, and they wired to the wrong bank account and called us the day of the flight and was like, "Hey, where's our airplane?" 36:39 I said, "What?"What do you, what do you mean? And they had actually sent out a wire transfer to a completely fake everything. It was- Yep... terrible. And that's, that's big in, that's big in trucking too. 36:52 I mean, I've got friends in, in the transportation space, and that's, that's a real thing, and I think that- Yeah... we have to be vigilant about that in private aviation. 37:00 So, so yeah, so, so just to recap really quick, if there's an operator CEO that's listening and they're saying, "Look, we need to at least consider this," it's get a wallet address, do some research, understand how you can actually clear these payments, and then understanding how you can clear it out of stablecoin into dollars. 37:21 'Cause you probably aren't paying your employees or your fuel bill or your hangar space in stablecoin. And so then how do you... And then figure out how to take it from stablecoin and convert that into US dollars. 37:34 Uh, but I think that if, I, I think that if there are operators that are out there that are thinking about how do we get kind of on the forefront of this, uh, I think that that's something important. 37:42 And then for brokers that are out there, um, I think, I think it's similar, right? Exactly how you just laid it out was make sure that there is kind of a two-factor authentication for what your address is. 37:54 Make sure that your clients are, you know, understand crypto and they understand how to send digital money. And then you can take out a lot of the unknown on a Saturday. 38:06 Um, I guess the one last question that I have before we wrap here is know your customer. It's a big thing in private aviation. 38:12 There's a lot of people that, you know, step up on soapboxes and talk about, you know, you have to know who your customer is, and you really have to know, you know, that they're not, you know, drug smuggling or, or human trafficking and things like that. 38:24 Um, i- is, is it any different in the crypto space when you're doing know your customer on the other side of the transaction? How do you guys think about that? Is there anything that can help, you know, facilitate that? 38:37 Is it, "Hey, we're still trying to figure it out. That's still a big unknown"? I think a lot of people think, oh, Bitcoin, illicit activity, right? 38:43 Like, at least that's how it was for a while on, like, the Silk Road and all that kind of stuff. Um, but, like, how do you think about know your customer? 38:51 Uh, well, first off, when I think, when I think US dollar, I think, I think more crime than anything else. [laughs] It's the most widely used currency for any global crime. But that being said, um, I think 39:04 KYC is extremely invasive. I'm a private aviation enthusiast, lover, entrepreneur, and I eat, breathe, and sleep private aviation, both of those words. 39:18 I think that people's finances are not my business, period, and nor are my finances any of yours. 39:25 That being said, we-- BitLux has a very proprietary way of protecting consumer and customer information from getting fed into the giant data cog that is notoriously spying on everybody. 39:39 Um, I think that's very important to clarify. 39:43 And I think that a lot of the KYC and AML things, you know, a lot of those came up after 9/11, and they used it, they used 9/11 as a convenient excuse to say, "Oh, you could be funneling money to terrorists. 39:56 Anything over $10,000 you need to do..." What can you buy for 10,000? Like, are you serious? You need to do KYC for a wedding ring? You're joking. Tell me that d- You can't make it, make it make sense, you know? 40:10 I think, [clears throat] I think you have to be very, very cautious. And I think, um, more m- not, not in the, not in the illicit or money laundering space. 40:20 I'm saying that you have to be cautious and very careful with the financial information and disclosures that you are giving on private individuals on a global level. 40:33 I am not going to say that I'm happy about the KYC kind of thing. Um, I, I'm not a big proponent of it. Now that being said, there are easy processes for KYC should someone decide to go through that. 40:46 It's a Form 8300 from the IRS. It's the same thing you fill out for any kind of cash transaction. 40:52 They wanna know what Social Security numbers you have, both yours, the receiving party's, sending party's, sending party's address, where they slept last night, also their credit score. It's pretty invasive. 41:04 Um, we do what we can to shield our customers against that, you know, through, uh, again, a very proprietary means. 41:12 Um, and, and, and it's, it's a little bit of a gray area too because, because it is a digital currency, [sighs] it's very reg- that, that legislation is very regionally based, specific to the United States. 41:30 It does- It, it's not a thing most other places. Now that being said, um, what charter companies do to try and do KYC, I don't... You know, do we know who our customers are? Absolutely. 41:43 Nine times out of 10 we have their passport. It is what it is. Yep. You know? Yeah, exactly. It is what it is. That's super interesting. That's very interesting. Well, Kyle, thank you so much for coming on the VIP seat. 41:53 I think that it's a, uh, 41:56 this is an interesting topic that I think a lot more operators and charter brokers should start thinking about and, um, you know, really, really start to adopt some of this technology, especially now that there's legislation around it. 42:09 And, uh, so yeah, if, uh, if anybody wants to find out more about you, uh, where should, where should they go find you and, uh, you know, connect if they got any oth- any other questions or anything like that? 42:20 Real quick, I do wanna say on the KYC, AML, and accepting stablecoins, there are current providers out there such as BitPay. They are super easy to get set up. Super, super easy. 42:29 You go in, you put your customer infor- You put your, your... It's, it works like opening a bank account. They will do the KYC, they will do the AML for you. 42:36 Is-- They do charge a fee, which kind of is inherently against the grain for crypto, but you know, if it's, if it's a solution you wanna be able to provide to the marketplace, I think that's a great place to start. 42:45 Um, and then to find out more about me, uh, you're not gonna be able to find out much about me except for on Twitter [laughs] or maybe if you pull Preston's arm. [laughs] You know, he might be able to. Exactly. 42:56 Well, uh, go to bitlux.com, uh, if you want to find out more about Kyle's charter brokerage. Um, you can come join Kyle and I on Twitter. Uh, we're both on x.com. Uh, we'd love to see you there. 43:09 Jesse, uh, bids her farewell from the desert. Uh, her computer died, and she is on her, uh, birthday trip with her husband in their RV. So she says goodbye. Uh, this has been the VIP seat. 43:23 If you liked this episode, please make sure to leave us a comment on YouTube. Uh, hit the little thumbs up button. Hit the subscribe button. Go check out the newsletter. 43:31 We're gonna link a lot of information about the Genius Act, and we're gonna talk a lot about, uh, some of the stablecoin stuff that Kyle has discussed. So we'll, we'll have a ton of links in the newsletter. 43:41 That's at thevipseat.com, and we will see you all next week. Thanks for having me, Preston
