Thread by @ofnumbers

Yesterday a reporter asked me:

"Which US-based cryptocurrency-related companies had the highest legal revenue per employee."

I know there are a lot of headline numbers out there but the undisputed answer is this:

OTC service providers such as Cumberland (DRW), Jump, Circle & others

- their trading desks are typically less than a dozen people including developers, traders, back-office
- minimum ticket is >$100k (weeds out retail)
- all counterparties KYC'ed (which results in less fraud)

So while Coinbase may have generated $1b in revenue last year, they are hit with huge amounts of fraud and maintain a very large headcount (~250 employees).

In contrast, according to multiple sources, the large OTC desks probably make $30-40m per head each year.

For perspective, because Coinbase now has one of the most popular apps in the iOS store and with all the current frenetic FOMO, its visibility has led to large amounts of identity theft & fraud.

One estimate is that "Coinbase has 20x the fraud of Paypal"
bitsonline.com/automata-neal-…

It bears mentioning that a number of the "crypto hedge funds" that have popped up over the past 18 months to buy into ICOs:

(1) they probably have violated some set of laws around self-dealing, anti-touting, lack broker-dealer licenses, etc.
(2) may have to disgorge funds

FIN