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Saturday, 28 January 2023
Citi Markets Executive Smallwood Leaves for Crypto Fund Hivemind

Citi Markets Executive Smallwood Leaves for Crypto Fund Hivemind

2022-10-31

 

Citi Markets executive Steph Smallwood has left the firm to become CEO of a crypto fund called Hivemind, according to a report on Wednesday. The news was reported by Bloomberg, which cited an unnamed source. The departure of the in-house crypto trader to an external firm is unusual, as it moves the executive away from the firm’s proprietary trading desk. Large banks have been working to find a place for crypto traders within their organizations, as there is a much smaller risk of those employees leaking confidential information to the outside world. Smallwood’s role at Citi Markets has not been publicly disclosed, but it appears that she was not an employee of the bank’s proprietary trading desk. Instead, her role was likely with the bank’s Institutional Client Group.

Citi to Launch a Crypto Platform

Citi is reportedly planning to launch a cryptocurrency trading platform, according to a report on Thursday. The trading platform is reportedly aiming to enter the crypto asset management business and will be based on the Solidx protocol. Solidx was founded by Citi’s former head of digital asset strategy, Steph Smallwood, who was recently announced as the CEO of the crypto fund, Hivemind. The move from Citi, which has long been a part of the crypto narrative, comes just as the investment bank is looking to make a serious play in the space. Citi, which has more than 100 million customers and a market capitalization of more than $200 billion, is looking to attract institutional investors to the space. The bank is also said to have signed a deal with VanEck, a cryptocurrency exchange, to provide custody services for the trading platform.

Smallwood Leaves for Hivemind

Smallwood is the latest in a long line of high-profile Citi execs to leave the bank and join the cryptocurrency ecosystem. Previously, executives including the head of the bank’s blockchain initiative, ex-JP Morgan executive Blythe Masters, and ex-Goldman exec Timo Schlaefer have all left to join crypto firms. The trend highlights the opportunity that exists for financial institutions as they look to build out the institutional framework for blockchain technology. Meanwhile, startups are continuing to emerge that are aimed at bringing Wall Street’s expertise to the blockchain. Crypto hedge fund HIVE, founded by former Fortress Investment head and Winklevoss twins, is one such example.

Hivemind to Focus On Institutional Crypto Trading

HIVE will focus on institutional-level trading and investing in the cryptocurrency and blockchain industry. The firm was co-founded by Schlaefer, who was a managing partner at Goldman Sachs’s Digital Asset Group, which he left to launch HIVE. The firm has raised more than $140 million from investors including Citi Ventures and is led by Schlaefer, who has a Ph.D. in Computer Science from the University of Oxford. The firm is building an investment strategy around a unique investing proposition, a “Hive Mind” — a system that it says can consistently make better investment decisions than humans. While the firm is focused on the institutional trading side of things right now, it is also exploring how it can get involved in the custody aspect of this nascent market. On the custody side of things, the firm is partnering with VanEck, which provides similar services to that of a traditional stock exchange.

Bats, a British Bank, Hiring Crypto Traders Too

 

In yet another example of a traditional financial institution hiring crypto traders, Bats, a British bank, is reportedly looking to hire a head of trading operations for its digital asset desk. A job posting on the Bats website puts the focus on quantitative trading engineers with knowledge of cryptocurrencies, but the posting does not state what the hiring organization intends to do with the individual it hires. While hiring for this role, Bats focuses on the need for the new hire to have experience trading cryptocurrencies and “solid understanding of liquidity and market structure.” A report from November said that the hiring process for the role had been underway for a while and that the company was looking to fill the position “as soon as possible.” XTX, the native token of Bats’s trading platform, has been seeing increased trading volumes on the platform in the last few months, though the bank has said it does not intend to become a crypto exchange.

Goldman Sachs Hiring Traders, but Only for Proprietary Trading

Goldman Sachs is also reportedly hiring traders with some experience trading cryptocurrencies, but only for its proprietary trading desk. The news comes after the bank hired its first full-time blockchain employee in November. This hiring process for traders with some cryptocurrency experience is likely an attempt by the bank to find individuals who are not overly risk-averse when it comes to trading cryptocurrencies but who also have experience trading other assets. Traders hired for this role will reportedly be based out of the bank’s tech operations in Salt Lake City, which is home to several blockchain startups. The move by Goldman is likely an effort to find individuals who have a general understanding of cryptocurrencies but who can be focused on trading assets like stocks and bonds for the bank’s institutional clients.

Other Large Banks Hiring Traders, but Only for Exchanges

Other large banks are also hiring traders with experience trading cryptocurrencies for their exchanges, but only for the more traditional aspects of an exchange. This group of banks likely includes Barclays, Credit Suisse, JP Morgan, and Morgan Stanley, as these firms are all large players in the financial services industry. Each of these firms is hiring for traders with at least some experience trading cryptocurrencies, but their primary focus is on building out their existing exchange platforms. For example, Morgan Stanley is hiring for a trading operations specialist who has experience trading on an exchange. The firm’s job posting says that the individual will work with clients to “design and build trading strategies for exchange-based trading strategies.”

Conclusion

As more financial institutions and traditional companies begin to see the potential of blockchain technology, the hiring trend among these firms will likely accelerate. These large organizations are looking to participate in the growing cryptocurrency market and gain access to cutting-edge distributed ledger technology. In addition to hiring trading specialists and engineers, these companies are also exploring ways to custody and store their assets.

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