SEC’s ‘Lack of Clarity’ Latest Target for Twitter’s ‘Crypto CFA’

Self-styled ‘crypto CFA’ Ram Ahluwalia has carved out a following by publicly breaking down challenges facing industry titans


Lumina modified by Blockworks


Ram Ahluwalia has a thing or two to say about crypto. 

The self-styled “crypto CFA” has carved out an influential industry niche, tweeting out lengthy threads with a tendency to pull off one all-too-rare combination: informed takes with a dash of spice. 

Ahluwalia is not afraid to challenge the biggest names in digital assets. But the end goal, Ahluwalia told Blockworks, isn’t self-serving.  

Now chief executive of Lumida, the financial advisory firm with a crypto focus he co-founded, Ahluwalia has hit the media circuit hard— including a recent guest spot on Bloomberg’s “Odd Lots” podcast.

The all-things-business podcast is where Ahluwalia expounded upon one hallmark breakdown of remarkably dense business jargon: the GBTC “widowmaker trade.”

Which just so happens to be the bread and butter of Odd Lots co-hosts Tracy Alloway and Joe Weisenthal. 

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On the podcast, Ahluwalia walks — runs, arguably — listeners through crypto’s “cast of characters,” including Grayscale, Gemini and Genesis. And he analyzes in snappy detail a situation still unfolding: the role of crypto holding conglomerate Digital Currency Group (DCG) at this point in the cycle.  

Ahluwalia to Alloway and Weisenthal equated Grayscale’s struggling bitcoin trust (GBTC) to “Hotel California” in drawing an analogy to the massive bitcoin trust’s current liquidity mechanisms. 

Read more: Every single thing you need to know about the state of GBTC

Ahluwalia has walked the corridors of Wall Street since the early 2000s. But he’s been pretty much all-in on digital assets more recently — including lending his own two cents to what Coinbase batting down a class action lawsuit earlier this month really means. 

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Toward the end of January, Ahluwalia in an interview with Blockworks expounded upon what have become his hallmark macro market takes. The topics are still quite relevant. Especially so on the role regulators are now playing in crypto — and what role the SEC ought to play. 

Also at the time, the Lumida chief was sick of endlessly, and often circularly, parsing crypto’s big problems.

Not that he’s stopped. Ahluwalia has become a go-to voice for analyzing the industry’s latest calamity in a sober and comprehensive fashion. And his followers have kept their foot on the gas in clamoring for more content. 

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Here’s how Ahluwalia got into crypto to begin with and where he thinks the industry is headed in the quarters to come. He has a tendency to speak in long-winded — but educated and fleshed out — narratives. And he didn’t much mind a few interruptions or to speed things along. 

Blockworks: How did your background lead to your crypto origin story?

Ahluwalia: My first job was at a community bank when I was 14 years old. I can’t run away from banks. I studied economics and philosophy in school. And banks are very interesting institutions in terms of credit intermediation and the transmission of money and fractional reserve banking. That obviously goes back to crypto, as well…

So, I’m at Merrill Lynch for 12 years, and I realized that banks were retrenching from credit. So, I saw an opportunity to invest in these distressed securitizations.

[Eventually] I started doing fintech. And so I built my first small asset manager, and it was analytically driven. I was doing statistical arbitrage type trading, as well. So, I started investing in these fintech lenders like Lending Club. And, that led to me developing my first startup called PeerIQ — which was like a Bloomberg terminal for loans. 

This was like early fintech. So I’m like a fintech OG, you could say. 

Blockworks: Let’s speed it up a bit and talk about what you’re doing now at Lumida.  

Ahluwalia: Right, right.

We’re building a Web2.5 private bank. That’s the headline. What does that mean? 

It means we’re going to offer wealth management. We’re leading with trust, leading with compliance, doing it the right way — bringing in our crypto-native experience and marrying that with the fundamentals based approach to investing.

We don’t think the rules of investing have changed: Valuations matter; cash flows matter; sound business principles and moats matter. And we’re focused on the underbanked which we think is actually like the top 1% [of the use cases for cryptoassets].

If you’re a high net worth individual, crypto whale or family office and you invest in crypto, the wealth managers can advise you already. If you talk to JP Morgan, they’ll say, “We have this bitcoin fund you should check out.”

Even though the [bulge-bracket bank] CEOs aren’t excited about bitcoin, the unbanked and the underbanked don’t have that option.  

Blockworks: If we can get more into the SEC weeds, what generally do you want to see regulators do? If we’re talking Genesis, Gemini, FTX. What’s the ideal outcome, and what protects retail investors? 

Ahluwalia: What you would want the regulator to do depends. You could have a steep fine and a resulting small cap on customer restitution. Or you could have a larger customer restitution and a smaller fine. And consider that, if you kill these businesses, it hurts retail customers.

There’s a matrix of issues here, right? This is what I expect will happen now.

These are by definition unregistered securities that have not been vetted by the SEC — which would make for a registered security. 

If it’s an unregistered security, the SEC has to have a role. The SEC has set forth a compliance framework that by law I must comply with. 

There’s a presumption of good faith in the American capitalist market that I will abide by law, that I will not offer a security if it’s unsuitable — for example, to a retail investor that’s not qualified to invest. And presumption of disclosure.

The key thing around securities law is if the offering is suitable to the seller and to the buyer, and we can debate that…Certain investor protections are outdated — and maybe ought to be modified. 

It’s all very nuanced, right? The truth is not black or white. It’s actually very nuanced. 

This interview was edited for brevity and clarity.

Ahluwalia and his team were something of a hot commodity at the recent iConnections Global Alts conference in Miami, in no small order because of takes like these. 

So much so that one reporter swung and missed on tracking him down in person, missing out on a steak — not stake, mind you — dinner in the process. 

Lumida, sources at the conferences said, drew the interest of Wall Street heavyweights plus crypto-native types trying their best to blend Web3 mannerisms — and dress codes! — into a buttoned-up scene where suits and ties are the norm. 

The annual Miami get-together has become a staple of the Wall Street conference circuit under the premise of efficiently matching allocators with buy-siders running the gamut in terms of strategies, from securitization pros to macro crypto specialists. It’s also evolved into a forum to lay out the latest on regulation.   

The conference has made a significant push to incorporate digital assets. Interest from institutions with dry powder to spray within the sector varied, according to allocators in attendance — including pension advisors, fund of funds operators and family offices.

No small number said they have pulled the plug on crypto investments entirely, at least for now. 

At a minimum, most every source said they have been intentionally slowing due diligence down, watching the SEC and CFTC’s enforcements like a hawk and keeping tabs on how all of the high profile bankruptcies that littered the crypto fourth quarter landscape are playing out.

That sentiment has been especially elevated for Wall Street types that had been making significant internal crypto pushes earlier in 2023. 

Even after the industry’s first two calamities — the demise of the Terra ecosystem and then the crypto credit crunch — played out last year, big money was still interested in the sector, one family office source told Blockworks. 

The source — who has done due diligence on dozens of crypto funds and was granted anonymity to discuss sensitive business dealings — said there’s been a “big pullback” from influential allocators in general so far this quarter.

What that really adds up to, the source said, is a “difficult sell” for portfolio managers and startups looking to lock down capital. 

Previously the founder of Cross River Crypto, Ahluwalia now sits in the chief executive seat for Lumida, digital asset-focused private wealth advisory firm that he founded (Lumida also advises clients on additional alternative assets.) 

Beyond crypto, what he really wanted to emphasize is that he’s a human being like anyone else.

He didn’t get enough sleep the night before the interview. There were a couple of interruptions throughout as knocks on his home officer door came and went. Ahluwalia has gotten pretty good at dealing with them and not skipping much of a beat.

Ahluwalia has a particular vested interest in the use of digital assets for genuine good, not just the kind of good that’s good for self-interested lip service. That extends to floating them as a financial lifeline for the unbanked and underbanked.

And, yes, this account did touch on some of what all he was sick of talking about a few weeks ago — and may well still be.

But the industry’s beat goes on.

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