Sideways: Masters 2.0 – Blythe and Bitcoin
Soon after Bill Winters was appointed CEO of Standard Chartered, his highest-profile protégé from their shared days at JPMorgan also announced a new job.
Blythe Masters, who played a leading role in marketing the development of credit derivatives and later headed commodities at JPMorgan, has become CEO of Digital Asset Holdings, a new platform for the settlement of digital currencies, such as Bitcoin.
Blythe Masters, CEO
Masters, like Winters, had attracted intense speculation about her next move after she was forced out of JPMorgan. Winters is settling into the conventional career-capping move that had long been predicted for him, as the CEO of a big banking group.
Masters, by contrast, is returning to her roots in derivatives marketing by attempting to take a potentially disruptive financial innovation to a wider audience. This is partly due to exigency. She found her route to the top of JPMorgan blocked when her ambitious plans to dominate bank trading of commodities began to seem a poor fit for a changed regulatory environment, and she failed to secure a senior position at Mercuria when the trading firm took on many of JPMorgan’s commodity assets last year.
Masters showed a talent for the bureaucratic infighting that accompanies a rise though the ranks in any organization as big as JPMorgan, but appeared to relish the prospect of a more freewheeling environment in announcing her new role.
“Digital Asset has a revolutionary technology platform that eliminates the counterparty risk and lack of transparency that has hindered mainstream adoption of cryptographic technology,” Masters said. “I’m thrilled to join the team to grow the company and drive broad-based adoption of our platform.”
Masters’ many fans, on Wall Street and elsewhere, will have been pleased to see that she had the first quote in the release announcing the official launch of Digital Asset, and that the subsequent quotes from the platform’s two co-founders were largely devoted to explaining why they were so excited that they had managed to sign her up as CEO.
Sunil Hirani and Don Wilson, the co-founders, have healthy egos of their own, however. Their track records also indicate that Digital Asset could indeed become a formidable platform if the three principals manage to play well together and stay on the right side of evolving regulations for Bitcoin and other digital currencies.
Digital Asset certainly won’t suffer due to a lack of
Hirani started his career in interest rate derivatives sales at Bankers Trust and credit derivatives sales at Deutsche Bank, before cofounding Creditex, a credit default swap execution platform. After Creditex was sold to Intercontinental Exchange, Hirani set up trueEX, an exchange for interest rate swaps.
TrueEX notes that it was the first exchange approved by the Commodity Futures Trading Commission in the US as a designated contract market for swaps. That indicates that Hirani is on rather better terms with the US derivatives regulator than his partner Wilson.
Wilson is the founder of DRW Trading, a proprietary dealer that has developed a reputation for aggression, even by Chicago standards. He is an advocate for new financial products that would undermine the traditional dominance of over-the-counter derivatives by an oligarchy of Wall Street banks (former ranking member: Masters, Blythe).
Wilson once had a willing audience for his ideas at the CFTC, but relations have cooled since the regulator accused him of manipulating one of the new, thinly traded swap futures contracts for an illicit profit. A flurry of suits and countersuits between DRW and the supervisor began in 2013.
Digital Asset certainly won’t suffer due to a lack of pugnacious principals as it seeks to establish a leading role in the settlement and promotion of digital currencies. And if Masters can help the platform to develop scale with established financial firms like her old employer, she might make some of her former colleagues wish they had also made the leap to a digital start-up, and away from the modern Wall Street of compensation constraints and compliance.