It's been around two months. In March 2022, Michael Roberts, a Bank of America managing director and EMEA head of prime brokerage platform, quit BofA after over 24 years and joined Copper, the crypto custodian. There, he's building a whole new prime broking service.
Needless to say, things have changed a bit in crypto country since March. But if Roberts is unsettled by the TerraUSD death spiral or the bitcoin sell-off, he's not letting on. The time had come to leave finance, says Roberts. And the crypto market is about more than just events of the past week and month.
"I didn't want to move to another bank, I wanted to move into the crypto sector," he tells us. "At Merrill Lynch and then Bank of America I built out the prime brokerage business from 1998. I was part of the DNA, but you need to understand what you love. What I loved was innovating and building out products for clients."
In the early days of prime services in banks, jobs were all about innovation says Roberts. However, the financial crisis added a layer of bureaucracy and regulation that was compounded by Brexit. "It's become harder to innovate in banking," he says. "The analogy that I use is an airplane: if you change something, you'd better make sure that you do it in a slow and more considered way."
By comparison, Roberts says working in crypto "pattern matches" to his early experience of innovating in prime broking at Merrill Lynch. "It's a smaller industry and you can come up with more ideas. If you want to innovate and to harness new technology, crypto is the place to do it."
Some crypto players are better than others. Roberts says he chose Copper specifically because it's the best in class crypto custodian and can offer institutional prime services clients reassurance around asset storage and exchange access. "We will be harnessing what Copper has built already for its crypto-native clients and serving institutional clients. What we have is of a very high standard and can easily be made into an institutional prime solution."
The new prime business hasn't been launched yet, but is due later this year. Roberts moved with two colleagues from BofA and the three are currently familiarising themselves with the Copper platform. "Right now, it's a four to five person team, but it will undoubtedly expand," he says.
What about the travails of TerraUSD? Roberts says it's not an issue and that if anything the broader crypto market has been proven sound. "This market marks to market much more often than traditional asset classes, and there is none of the overnight risk you get in banking, which means the market clears far more easily. The issue has been limited to one particular protocol that wasn't architected properly, and this will no longer be part of the ecosystem."
He says the long term case for crypto remains. "The use for digital assets is still strong - they can optimize the cost base in banks, and this week has shown that they can reduce the risk from events like Archegos because of their efficient clearing mechanism."
Roberts says there are plenty of other people in banking who'd like to move into crypto and that he could spend all day advising them if he wanted. "I get a lot of incoming messages about this. I usually tell people to do their homework and to go down the crypto assets rabbit hole themselves."
Having been down that hole, he says the options are manifold: "You don't have to move into a pure crypto firm. You can also work in digital assets within a bank or a consulting firm."
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