In this episode of the Sunny Ray Show, host Sunny Ray sits down with DH Kim, founder and CEO of Finhaven, to explore why Bitcoin and Ethereum fall short as infrastructure for institutional tokenization. Kim explains that Finhaven, founded in 2017, became Canada's first authorized security token dealer, marketplace, and clearing agency in 2020, and is now launching Finhaven Chain, a dual network public blockchain built specifically for regulated financial institutions to collaborate securely, alongside a permissionless layer for innovators. Kim contrasts this shift to prior bank consortium efforts like R3 Corda, arguing that alternative investment tokenization requires purpose built market infrastructure rather than retrofitted general purpose chains. The conversation moves between technical questions on why public chains like Bitcoin and Ethereum cannot meet institutional collaboration needs, and Kim's personal story, from his Korean upbringing steeped in Marxism and existentialism, through Merrill Lynch, mining, and cross border capital raises, to his book The Simplest Revolution. Kim frames his mission around empowering underserved small and medium sized institutions, which he calls the Davids, by fixing structural inefficiencies in global capital markets.
Finhaven's DH Kim explains why institutional tokenization needs purpose built infrastructure, not Bitcoin or Ethereum.
Can you share a paragraph on what Finhaven is and how it started?
I'm the CEO of Finhaven. We started back in 2017 after I spent years in capital markets and saw the potential of blockchain infrastructure to innovate them. We got regulatory authorization for our platform in 2020 and operated a private chain. Now we've shifted to releasing Finhaven Chain, an alternative investment tokenization infrastructure for financial institutions, with a dual network, one permissioned for institutions and one permissionless for innovators, coexisting in a regulation compliant way.
Why can't an existing chain like Bitcoin solve what you're trying to solve, why do we need another chain?
Financial institutions need collaboration between themselves and a secure system free of noise. Even though our nodes are permissioned, the number of participating institutions is substantial, which creates real collaboration and productivity between them. More importantly, it helps capital flow into real productivity, especially for small and medium institutions, companies, and even countries that normally struggle to attract capital compared to large players.
Why can't Ethereum be used instead of building a new chain?
Some financial institutions issue tokens on Ethereum, but if you look at what's really happening, they're all confined to their own environment. We need a public blockchain, not layer two but layer one, that creates a collaboration space specifically between regulated financial institutions, and eventually other regulated bodies beyond just finance, so they can transact safely with each other through permissioned nodes.
There were past efforts like R3 Corda where banks tried to build a shared chain. Why didn't that succeed, and what will let Finhaven succeed where it didn't?
What market you go after matters a lot. We're not targeting public equity or US treasuries, our focus is the alternative investment space where we see real transformation potential. Also, you don't just need one player, you need competition between similar market infrastructures, and eventually one or a couple of them will win most of the market.
A lot of finance people dismissed blockchain as a casino. What convinced you it was real infrastructure and not just speculation?
The constant struggle in my conversations is that blockchain gets treated as synonymous with cryptocurrencies, but blockchain is a back end ledger technology, while cryptocurrencies and financial products are separate things built on top of it. Once I started investing in blockchain startups from 2016 and learned more from them, I realized blockchain could be a great capital markets infrastructure on its own.
You sat on the BC Securities Commission's Fintech Advisory Committee for two terms. What did you learn about how regulators really think about this technology?
Regulators at the BC Securities Commission were quite open. They started the Fintech Advisory Board specifically to learn from the industry, to understand how the technology really works so policies could be formulated to accommodate the innovation. In 2020 Finhaven became the first platform in Canada authorized as an STO dealer, marketplace, and clearing agency under one roof, built through a regulatory sandbox with multiple exemptions and restrictions.
Walk us through Finhaven today. If I'm an issuer or investor, what does my experience on your platform look like now?
This year we stopped doing the traditional model of helping companies raise money directly, that's the past. Now we're completely focused on serving other financial institutions with blockchain by releasing our public Finhaven Chain for both financial institutions and innovators, rather than operating as an issuer platform ourselves.
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