As Wall Street banks embrace crypto, high-flying start-ups look to lure top finance talent
- Major banks are building out teams dedicated to cryptocurrencies and the underlying blockchain technology.
- Start-ups are looking to compete for talent by offering faster-paced environments, equity and less red tape, courting talent from Goldman Sachs, BlackRock and others.
- "You're taking brand risk — Goldman is one of the storied institutions of Wall Street," said Justin Schmidt, former head of digital asset markets at Goldman Sachs.
Wall Street has been beefing up hiring for digital asset teams. But some employees are walking away from name-brand institutions in search of more risk, and potentially, more reward.
JPMorgan Chase, Morgan Stanley and Goldman Sachs are among the firms with dedicated groups for cryptocurrency and its underlying blockchain technology. JPMorgan has one of the largest crypto teams, with more than 200 employees working in its Onyx division. The JPM Coin digital currency is being used commercially to send payments around the world.
Umar Farooq, the CEO of Onyx by JPMorgan, said the team has to worry about compliance and protecting the bank's brand and often moves slower than your average crypto start-up. But when products are launched, they reach "a scale that a fintech can only dream of."
"There aren't many places where you can roll out a new platform and that platform can go from literally nothing to transacting a billion dollars of trade a day in a few months," Farooq told CNBC. "That sort of scale can only be possible when you operate at a company like JPMorgan Chase. The upside of that scale is way more important than whatever downsides might exist by virtue of more regulations or controls."
When it comes to hiring, Farooq said it's a mix of current JPMorgan employees and competing for talent with start-ups and bigger tech companies. From first-year analysts to senior management and managing directors, there's a greater interest in making the move to crypto, he said.
Financial services firms added three times as many crypto jobs last year than in 2015, according to recent data from LinkedIn. In the first half of 2021, that pace jumped by 40%. Banks on a crypto hiring spree included Deutsche Bank, Wells Fargo, Citigroup, Capital One, Barclays, Credit Suisse, UBS, Bank of America and BNY Mellon.
The crypto boom on Wall Street coincides with more funding and hiring in the start-up world. Crypto and blockchain companies raised a record $25 billion last year, an eightfold increase from a year earlier, according to CB Insights data.
Farooq said that even with the start-up boom, JPMorgan has seen "limited attrition." Those leaving have been people "wanting to start their own company versus wanting to leave and go do something similar."
However, JPMorgan did lose one of its highest-profile crypto deputies last year. Christine Moy is on garden leave after departing her role as managing director and global head of crypto and metaverse at Onyx. She has yet to announce her next move.
"After over a half-decade laying the foundations for blockchain-based infrastructure across financial markets and cross-border payments, creating new businesses that have already scaled into the $USD billions at J.P. Morgan, I am looking to challenge myself further by finding new opportunities to create value and drive impact for the Web3/crypto ecosystem from a new angle," Moy told CNBC in an email.
Leaving Wall Street
Other top crypto executives who left Wall Street recently expressed some frustration at how long it takes to get projects moving within a large financial institution.
Mary Catherine Lader, chief operating officer at Uniswap Labs, left her job as a managing director at BlackRock last year. Her foray into crypto started as a side project within the asset management company.
"It certainly wasn't my primary job," Lader said. "It was kind of a hobby, as it is for so many people on Wall Street, and it definitely wasn't something that at the time I was thinking about, because it was early stages of adoption."
At Uniswap, Lader is now working on an emerging decentralized cryptocurrency exchange. She said she couldn't pass up the opportunity to work on the next wave of innovation.
"This technology is so critical to the future of finance that it didn't feel like a risk at all," Lader said. "I was sad to leave the people I had loved working with for many years. I have tremendous respect for the firm, but it didn't feel like a risk. That's a great thing about where we are in Web3."
Justin Schmidt, former head of digital asset markets at Goldman Sachs, made a similar career change last year. He joined institutional crypto trading platform Talos and described the risk in a similar way, calling the decision "multidimensional."
"Inherently, you're taking a brand risk — Goldman is one of the storied institutions of Wall Street," Schmidt said. "You are also taking a risk by staying someplace more traditional, and I very firmly believe that this is a generational change and there's a generational opportunity here."
Cryptocurrency start-ups and banks describe a shift in the hunt for top talent. Many are looking beyond top candidates with MBAs, and instead considering those with less conventional resumes. Lader and Schmidt said some of their best crypto hires have been self-taught engineers or crypto influencers they first interacted with on Twitter.
"I constantly am meeting people who are 23 years old, who are as smart about markets as people I worked with on Wall Street for years," Lader said. "People who frankly had no interest in financial services, who would never really explore or consider working on Wall Street, are excited to work at UniSwap Labs and companies like us."