Patrick Sells is going from banking cryptocurrency businesses shunned by most financial institutions to pitching crypto-related services to banks that may suddenly be warming to the sector.
Sells, the former chief innovation officer of New York-based Quontic Bank, is joining New York Digital Investments Group (NYDIG) as its head of bank solutions, the company announced Wednesday.
Sells will be responsible for developing NYDIG’s custody, execution, financing and anti-money laundering and know-your-customer compliance services for banks through a white-labeled offering.
In other words, if banks want to offer crypto trading and custody to their customers, NYDIG stands ready to do all the work for them behind the scenes. And such banks might be out there, judging from the public comment letters filed by a handful of U.S. institutions over the summer in response to a national regulator’s request for input.
One of only 26 companies to receive New York State’s rarefied BitLicense, NYDIG is best known for managing multi-million-dollar crypto funds and offers prime brokerage and custody services to institutional clients. It raised $150 million for twin crypto funds earlier this month. It is a unit of Stone Ridge, an alternative asset manager handling $10 billion for clients.
Quontic is a tiny bank with only $1.4 billion in assets, about 0.044% the size of JPMorgan. Sells and his former boss, Quontic CEO Steven Schnall, provided hard-to-come-by bank accounts to cryptocurrency firms and gave Quontic employees a crypto education by handing out $20 in bitcoin to each staff member.
Sells won American Banker magazine’s Digital Banker of the Year award in 2020, and revealed that he was working with Schnall on a deposit product tied to crypto.
While the crypto industry has historically been served by only a handful of banks, several new banking options are on the horizon, from new chartered Wyoming-based community banks designed to handle digital assets to crypto payments firm BitPay filing to become a national U.S. bank.
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