San Juan Mercantile Exchange Welcomes Noble Bank Employees and Nasdaq Exec Prior to Launch

Back in November last year, Noble Bank was the subject of many news stories as they were close to bankruptcy. The firm offered both banking and OTC trading services, and they fervently sought a buyer to save them after Bitfinex kicked them to the curb.

While the fate of many of the employees is still a mystery, there is quite a few that have made their way to a crypto firm called Mercantile Global Holdings.

Mercantile Global Holdings is a crypto firm, which is hosted in Puerto Rico and still has not gotten much publicity in the industry. They have been working on an exchange and banking opportunity for customers with digital assets and is led by James “Bo” Collins, the former president of the New York Mercantile Exchange.

Collins originally found publicity when he had spoken with the Wall Street Journal in an interview and revealed that he was fully investing in Bitcoin back in October 2017. This was around the same time that he was in the middle of launching the Morpheus Asset Strategies crypto fund. At the time, he said,

“Virtual currency for me is a deep passion. We’re just now beginning to turn it into a business.”

The Block notes that there have been no outside contributions, even though the fund is presently in operation. The new work that Collins is pursuing with MGH could be launched by March. Speaking to Bloomberg News last year, Collins said,

“What we want to prepare for and help facilitate is when a really large broker dealer wants to give access to their millions of clients but they want to do it in a safe and sound, secure way, run by professionals.”

The services that will be offered at this launch are surprisingly similar to the services that Noble Bank once provided. To offer a crypto exchange that is comparable to Coinbase and Binance, the SJMX unit will take charge of this sector. The exchange aims to provide options for clients that want to use multiple custodians for their investments, which is part of the reason that there are 40 different venues for the market data they collect.

Optimally, the high-quality services will be enough to entice institutional clients, as the platform hopes, considering that MGH presently implements

“industry practices modeled after CFTC guidelines.”

San Juan Mercantile Bank & Trust International, the banking business for MGH, is working on measuring up to the regulators locally so that they can operate properly. However, it is scheduled to launch before the crypto exchange. One Puerto Rico hedge funder said,

“It’s definitely innovative to be seeking CFTC clearance, a nice ‘cross’ custodial offering, in addition to being a futures exchange (that apparently will execute trades on cboe for you?)”

The staff features Nick Varelakis, who used to be the COO and interim CFO of Noble Bank. Now, he is the CFO of MGH, while Rick Beaman, the former Nasdaq Futures CEO, is now a CEO for SJMX. Beaman chose to leave Nasdaq behind in October last year after a decade, though he did not give any indication that this would be his next step when he left.

The Block names three other employees on the team, including:

  • Jason Brewer
    • Formerly: A VP of special projects at Noble Bank
    • Currently: A VP at MGH
  • Brian Doherty
    • Formerly: A business operations & client service analyst
    • Currently: An operations analyst at MGH
  • Justin Ondrof
    • Formerly: A product manager at Noble Bank
    • Currently: An associate at MGH

Presently, there are at least 10 former employees of Noble Bank that have been hired by MGH and their affiliates. Collins, however, originally broke into the financial services industry as a trader of cotton, crude, and natural gas at the New York Mercantile Exchange.

He created the MotherRock energy derivatives fund, managing almost $500 million at once. However, a loss of $230 million due to volatility in the markets that Collins traded within shut it down. He also launched Lone Star Capital in 2014, offering investment services for derivatives technology.

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