The head of the London Metal Exchange is stepping down to lead a start-up that safeguards cryptocurrencies for big investors.
Komainu, a custody business for digital assets backed by Nomura and billionaire hedge fund manager Alan Howard, on Friday appointed Matthew Chamberlain as its next chief executive.
The move by Chamberlain, who has led the world’s biggest industrial metals marketplace since 2017, highlights how experienced executives from traditional markets continue to be lured into the fast-growing world of digital assets.
Many bank and fund managers are keen on exploring trading cryptocurrency but dislike the responsibility of safekeeping their own digital assets.
Companies such as Komainu promise to store bitcoin, ether and other cryptocurrencies on their owners’ behalf. Named after the stone lion-dogs that guard the entrance to Shinto shrines, it was founded in 2018 as a joint venture between Nomura, blockchain company Ledger and crypto investor CoinShares.
Komainu raised $25m in a Series A funding round last year and has about $5bn of assets under custody.
Explaining his decision to switch commodities for crypto, Chamberlain — a former head of European financial technology at UBS, said he strongly believed in the transformative capacity of a blockchain-empowered world.
“But such technologies will only deliver their true potential when robust infrastructure exists to make them easily and reliably available to all those who wish to participate in this unprecedented period of financial democratisation,” he said.
Chamberlain, 39, will join Komainu in May. Adrian Farnham, head of the LME’s clearing house, will take over as a temporary chief executive while the bourse, which is owned by Hong Kong Exchange and Clearing, searches for a replacement.
Chamberlain joined the LME in 2012 after advising HKEX on its $2.2bn acquisition of the market when he was a banker at UBS.
He won plaudits for pushing through a complicated reform of the LME’s much maligned warehousing system after buyers complained about long queues to access their metals.
Five years later he was appointed chief executive, the youngest head of a major exchange, to try to halt a decline in trading in the face of competition from rivals such as CME Group of the US and the Shanghai Futures Exchange.
He set about trying to modernise the exchange, famous for its open outcry trading pit where traders use shouting and hand movements to execute bespoke orders for industrial metals such as copper, nickel, lead and zinc.
His plan was to tilt the 145-year old exchange towards a structure more familiar to mainstream financial investors and hedge funds.
He also launched a responsible sourcing initiative, and under his leadership the exchange banned floor traders and their support staff from consuming alcohol during working hours.
The LME also introduced its first code of conduct, in a move to stamp out sexist entertainment at LME Week, its annual shindig in central London.
However, activity at the LME has remained subdued with volumes contracting for a third consecutive year in 2021 — even though its index of six main metals ended the year up more than 30 per cent, the most since 2009.
Chamberlain was frustrated in his plans to close the LME’s distinctive Ring trading floor and its famous red sofas permanently after brokers and industrial traders resisted switching to a fully electronic market.
Having got through the pandemic the Cambridge computer science graduate decided it was time to move and take up a new challenge, according to people with knowledge of the situation.
“Just like the LME is market plumbing for the commodities space,” one of the people said, Komainu was “market plumbing for digital assets”.