Peter Thiel-Backed Crypto Lender BlockFi Hires General Counsel

BlockFi Inc., a cryptocurrency lender funded by billionaire Peter Thiel and internet entrepreneurs the Winklevoss twins, has welcomed aboard a new top lawyer as it continues to search for a CFO.

Jonathan Mayers, who spent the past decade as an in-house lawyer at hedge fund Renaissance Technologies LLC, joined BlockFi earlier this month as its first-ever general counsel. Mayers is the latest in a string of lawyers hired in the cryptocurrency and digital asset management sector, which is ramping up its legal and compliance capabilities in an effort to legitimize itself among regulators and traditional financial services institutions.

“As the space continues to mature, we’ll need a firm regulatory structure more analogous to that of traditional finance to ensure capital can move through the crypto ecosystem safely and ethically,” BlockFi co-founder and CEO Zac Prince said in a statement announcing Mayers’ hire. “Jonathan brings a trove of experience from some of the most recognized names in finance to help us continue to do so.”

Launched in August 2017, Jersey City, N.J.-based BlockFi operates a cryptocurrency trading and lending platform that is poised to generate $50 million in revenue this year, according to the company, which began searching for an in-house legal chief in May.

Mayers said in an interview that he couldn’t pass up the “tantalizing opportunity” to get involved “almost at the ground level” in a company operating in the cryptocurrency arena. The Covid-19 pandemic has not only contributed to a spike in hiring, but created an increased appetite for digital assets as more traditional investments falter, Mayers said.

Mayers spent four years in-house at banking giants Barclays PLC and Deutsche Bank AG prior to joining Renaissance, an East Setauket, N.Y.-based hedge fund known for its quantitative modeling founded by mathematician and billionaire investor James Simons. Mayers left Renaissance in 2017 and co-founded Cape Springs Capital Partners LLC, a private equity firm that he said has switched from pursuing controlling stakes in small and mid-sized businesses to more passive investments.

While Cape Springs remains a going concern, Mayers told Bloomberg Law that since joining BlockFi two weeks ago he’s been busy getting up to speed on the legal and compliance framework at his new employer. The company in February raised $30 million in a second found of fundraising led by Thiel-backed venture capital firm Valar Ventures LLC.

Betting on BlockFi

Thiel, a former associate at Sullivan & Cromwell, has roots in South Africa, where Mayers was born and raised. But it was BlockFi chief risk officer Rene van Kesteren who Mayers said recruited him to the company.

Bloomberg News has reported that BlockFi’s backers include Winklevoss Capital Management LLC, the family office of Tyler and Cameron Winklevoss, best known for their legal battle with Facebook Inc. founder Mark Zuckerberg. Other investors include Fidelity Investments-owned Avon Ventures, hedge fund manager and noted cryptocurrency investor Michael Novogratz’s Galaxy Digital Ventures LLC, and Morgan Creek Capital Management LLC’s Morgan Creek Digital.

While cryptocurrencies still have their fair share of critics, some longtime skeptics have started to come around to the business. JPMorgan Chase & Co. chairman and CEO Jamie Dimon famously called bitcoin a “fraud” in 2017, but two years later his company started its own cryptocurrency, JPM Coin.

“There are real efficiencies and benefits to digital assets,” Mayers said. “We want to get stakeholders involved and engage with global regulators in a responsible way.”

Mayers, who is working from his home with two small children in Hillsdale, N.Y., a task he cautioned is “not for the faint of heart,” said he hopes to be able to help BlockFi navigate an evolving legal and regulatory compliance landscape for cryptocurrency companies. Mayers lives not far from Robert Werner, the new legal chief at the Libra Association, a digital currency group grappling with its own regulatory issues whose members include Facebook.

Haynes and Boone and Gunderson Dettmer are the two law firms that primarily serve as outside counsel to BlockFi. Mayers, who began his U.S. legal career as an associate at Davis Polk & Wardwell, which he joined at the height of the dotcom boom two decades ago, doesn’t anticipate any immediate changes to that lineup, noting that he and BlockFi have been pleased with the advice they’ve received.

Mayers said Gemini Trust Co. LLC, a digital currency exchange also backed by the Winklevoss brothers, is a separate entity from BlockFi, although the latter does use New York-based Gemini as the primary custodian for its cryptocurrency assets.