Digital Asset Firms Lure Wall Street Talent from Citadel to Pershing

Talent is fleeing the legacy financial world at an increasing rate in favor of digital assets.

In the 2017 boom & bust, only the bravest of souls of the banking system fled into the Wild Wild West of crypto.  The crypto universe has since matured and the capital raised during that previous bull run went into building projects that are starting to bear some fruit.

Now, some of the people who helped shape institutions in the public market are waking up to the colossal growth opportunity afforded by digital assets. In the early 1990s, the equity market operated with enormous gaps in efficiency and as those gaps closed, it led to an enormous boom of liquidity and financial innovation.

CrossTower is a global digital asset trading firm that is trying to solve a lot of these same problems. It’s CEO, Kapil Rathi helped build out the infrastructure at some of the largest exchanges in the world including CBOE, BATS & ICE. Co-founder Kristin Boggiano, who serves as president, is a veteran securities attorney with experience across multiple regulators, and at institutions including Merrill Lynch, Guggenheim Partners, and the law firm Schulte, Roth, Zabel.

They recently hired Greg Bunn as Chief Strategy Officer, who spent 20 years at Deutsche Bank where he served as Global Co-Head of Prime Finance.  Bunn also led one year as Head of Counterparty Strategy at Citadel, one of the biggest hedge funds on the planet, before making the move into crypto.

The Opportunity

Bunn watched the evolution of market structure in his seat at Deutsche first hand and sees a major opportunity in crypto.  In an interview with Blockworks he said, “We can see in every traditional asset class the progress from a fragmented market to a connected one.  I see the same patterns in the equity market in the 90’s versus what is happening in crypto now. Decentralized worlds still need to be connected.”  

BitGo, one of the largest crypto custodians with over $16 billion of assets, has also succeeded in securing talent from legacy finance. The firm recently hired Jeff Horowitz as Chief Compliance Officer, who before serving at Coinbase spent 12 years as CCO at Pershing, a subsidiary of BNY Mellon that holds over $2 trillion in assets.

As collateral and custody progress in cryptocurrency, so should liquidity, and that is the holy grail for institutional investors.  On liquidity Bunn says, “Flow begets flow, so we are doing partnerships with some retail platforms to incentivize participation in the markets.  CrossTower is launching a long only vehicle that will trade at NAV with a very competitive fee.” 

Once the market structure gets more efficient and liquidity becomes more pervasive, cheaper products can be offered to the marketplace.  The human capital that saw the 1990s evolution now sees this opportunity.

Michael Moro, CEO of Genesis Trading says, “The amount of talent that has recently left Wall Street and jumped to crypto is emblematic of numerous things.  But I really think it boils down to the fact that all of us are witnessing the birth of a new asset class, which really is a once-in-a-lifetime opportunity.  The 2017 rally was largely retail-driven, but 2020/2021 was when the institutions really scaled into it.  The ‘Blue Ocean’ opportunity in crypto today cannot be passed up, and I trust we’ll continue to see the talent migration for many more years.”