Bankers who quit cryptocurrencies have no regrets amid the crash: “Never looked back, not even a day”

Bankers who have left traditional finance to take advantage of the boom in digital assets have instead been greeted by a new “cryptocurrency winter”.

Former employees of JPMorgan, Goldman Sachs and Citigroup were among those affected as cryptocurrency exchange Coinbase cut 1,100 positions and revoked 300 job advertisements, while Gemini, Crypto.com and BlockFi intervened, also reducing the price drop. and the deterioration of economic conditions. booming sector.

But some senior bankers who have made the leap in the past year say they have no regrets. It’s not about “HODL” or “buying the dip” – terms used by crypto evangelists when prices fall – but about a long-term trust in cryptocurrencies and a belief that the industry needed a turnaround, according to four people who jumped into space.

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“I’ve never looked back, not even a day,” said Kyle Downey, who left a 17-year career at Morgan Stanley in October to start Cloudwall Capital, a New York-based fintech firm that builds a risk management business. of digital asset system.

Chris Perkins left Citigroup, where he led a team of approximately 725 people as co-head of futures, clearing and FX brokerage, in September last year. He is now president of cryptocurrency investment firm CoinFund, which has just recruited a new global talent manager to help her in her next phase of growth.

Perkins said he didn’t want to appear “deaf” to cryptocurrency problems, but added that the industry has gone through “many cycles”.

“We are very convinced that there is a material opportunity in this space,” he said. “In a bear market cycle, this is the perfect time to put your head down and build. Good companies will emerge with solid foundations.

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In an email to staff announcing the job cuts, Coinbase CEO Brian Armstrong said it “looks like we are entering a recession” and that it could lead to a “crypto winter”. The company, which grew to 6,000 employees from 1,250 in early 2021, has grown too fast, he added.

On June 15, cryptocurrency lender Celsius Network hired restructuring lawyers in an effort to solve its financial woes after blocking customer withdrawals.

But as rivals cut spending, crypto platforms Binance, FTX, and Kraken said they would continue hiring. Binance will hire an additional 2,000 employees, according to its chief executive, Changpeng Zhao, who said in a Tweet of June 15 saying it was a “bloodbath there”. “Crouch. Make sure you can last.

Sebastian Widmann, who spent four years on the digital assets team at Japanese bank Nomura before leaving in September to become head of strategy at digital asset custodian Komainu, said the company still aims to reach 100 people by end of the year, but this could be accelerated or slowed depending on market conditions.

“The digital asset narrative hasn’t changed. Each cycle creates an opportunity to rebuild better and will cause some bad market players to walk away while reinforcing legitimate projects, “he said.” Regulators have become more aware of the digital asset space and it is more likely that take action to establish rules to govern As a regulated digital asset custodian created by institutions for institutions, this is good for us.

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Arianna Luna launched Campsor Capital, a market-neutral crypto hedge fund in April, after about 11 years in banking roles. The current volatility and “dislocation” of the market has helped the fund make money, she said, even though it is “hard to navigate” right now and some peers are collapsing.

“Investors who have never invested in cryptocurrencies are asking more and more questions, but industry funds are still pursuing their allocations, even as there is more control over the due diligence process,” he added.

Do you stay with ‘tradfi’?

Over the past year, more and more bankers have left traditional financial roles for cryptocurrencies. Some, frustrated with the pace of adoption within their organizations, feared they would miss an impending boom, while others were looking for a big payday in an industry where starting six-figure salaries were slightly ahead of the offers.

At the same time, banks like JPMorgan, Goldman Sachs and Citigroup have established new digital asset teams to address the industry in anticipation of greater institutional adoption. With crypto assets falling, some employees choose to stick to what they know.

One trader, who said he was considering joining a cryptocurrency trading company, decided instead to stay with his current employer to work on their digital assets team. A staff member at a US bank whose offer was canceled by a cryptocurrency firm said he now aims to stay in the banking sector, while another said he was taking a break and “evaluated my options” .

“I still get questions from people in commercial positions every day,” Perkins said. “For the people who have gone down the cryptocurrency rabbit hole, the opportunities remain, even if in some cases they are not immediate. We are long-term investors and are looking to the horizon. “

Downey said his business is fully funded and “all hires have been completed.” He is “100% ready to build the business”. He said conversations with crypto hedge funds, start-ups and banks lead people to ask “when will he come back” instead of “if,” as happened during the latest cryptocurrency crash in 2017.

“This is assumed to be a correction and that the market and ecosystem will come back stronger,” he said. “It could take a while, or it could recover as quickly as it did after March 2020: no one can say for sure. But it’s coming back strong, of that, I’m pretty sure.

Perkins and Widmann said the current crisis will push regulators to take action on cryptocurrencies, which will benefit companies looking to bridge the gap between traditional finance and the so-called defi sector.

“There are two headwinds: regulatory risk mitigation and institutional adoption,” Perkins said. “Our job now is to build a solid foundation for when market conditions improve.”

“In a situation like this, anyone who can hold their breath underwater longer wins big,” added Downey.

To contact the author of this story with comments or news, please email Paul Clarke

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