Crypto exchange goes mainstream with hire of Instinet CEO

Fibo Quantum

Coinbase, a US cryptocurrency business backed by the New York Stock Exchange, is hiring the chief executive of a broker owned by Japanese investment bank Nomura.

Jonathan Kellner, the CEO of Instinet, is joining the San Francisco-based crypto exchange as managing director of its institutional coverage group, a person with direct knowledge of the matter said. He will play a key role in selling Coinbase’s new range of institutional products for professional investors.

The products, which were unveiled by the firm in May, include custody services for storing cryptocurrencies, further development of its electronic market for trading crypto, and prime services for more sophisticated trading.

The hire underlines Coinbase’s ambition to target asset managers, banks, hedge fund and family offices and form a link between traditional finance and the evolving crypto market. It also shows how crypto firms are turning to experienced Wall Street operators as the nascent industry matures.

Coinbase hired new chief legal officer Brian Brooks from Fannie Mae in September, new vice president of engineering Tim Wagner from Amazon Web Services the previous month, and compliance chief Jeff Horowitz from BNY Mellon’s Pershing in July. Alesia Haas, the firm’s finance chief, joined in April from Oz Management.

At Instinet, Kellner oversaw an agency broker that matches buyers and sellers in the equity markets. The group has been one of the pioneers of electronic trading and is known for its algorithms and data-driven approach.

The hire comes after a report by the New York attorney general’s office found potential conflicts of interest at various cryptocurrency exchanges. The report said Coinbase “disclosed that almost 20% of executed volume on its platform was attributable to its own trading”. However, Mike Lempres, its chief policy officer, wrote in a subsequent blog that the firm “does not operate a proprietary trading desk” or conduct market-making.

Lempres wrote: “When Coinbase executes these trades, it does so on behalf of Coinbase consumer customers, not itself.”

Kellner’s departure from Instinet comes after much speculation about his future. Financial News reported in August that Ralston Roberts, Goldman Sachs’ co-head of execution services and electronic trading in Europe, is set move back to the US to become Instinet’s chief operating officer. He is seen as a potential successor to Kellner.

Instinet was bought by Nomura in 2007 from private equity firm Silver Lake Partners for $1.2bn.

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