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Robinhood Ex-Crypto Compliance Head Said to Join Cross River (1)

June 14, 2022, 3:52 PMUpdated: June 14, 2022, 6:13 PM

Robinhood Markets Inc.'s former chief compliance officer for cryptocurrency has landed a new job at Cross River Bank, a regional lender serving financial technology companies, according to two people familiar with the matter.

Benjamin Melnicki is head of cryptocurrency compliance and regulatory for Fort Lee, N.J.-based Cross River, said the people, who spoke on the condition of anonymity because the move hasn’t been publicly disclosed. Melnicki left Robinhood in December and joined Cross River in May, the people said.

Robinhood has cut 9% of its staff—about 340 employees—as the online trading platform racked up roughly $2 billion in losses since going public last summer, Bloomberg News reported in April. The Menlo Park, Calif.-based company’s stock is down 58% this year.

Robinhood has sought to streamline its operations and reboot itself around new business lines, such as crypto, which was largely spared in the jobs cull. Robinhood’s brokerage arm debuted a crypto wallet in May to enable users to access decentralized financial applications and non-fungible tokens.

Cross River works with some of the largest fintech startups, including crypto exchange Coinbase Global Inc., Bloomberg News reported last year.

The lender, whose parent company is CRB Group Inc., announced in late March the closing of a $620 million investment round led by venture capital firm Andreessen Horowitz and billionaire Todd Boehly’s investment firm Eldridge Industries LLC.

Sullivan & Cromwell and Hunton Andrews Kurth advised Cross River on the fundraising. The bank said it would use to the funds to expand its operations in four key areas: embedded payments, cards, lending, and crypto.

Robinhood Departures

Melnicki is one of several lawyers to have recently left Robinhood.

Weilyn Wood left her role as an associate general counsel and assistant corporate secretary in May to become deputy general counsel for corporate at software company Confluent Inc. Wood was one of three Robinhood in-house lawyers listed on the company’s prospectus for an initial public offering that raised $2.1 billion.

Daniel Feldstein, Robinhood’s associate general counsel for employment, left in January to become deputy general counsel for cryptocurrency custodian and blockchain trust company Prime Trust LLC.

Piret Loone, an assistant general counsel at Robinhood, left the company in December to become a San Francisco-based general counsel and interim compliance chief for stealth fintech startup Link Financial Technologies Inc.

Feldstein and Loone joined Robinhood in 2020. Robinhood declined to comment on personnel matters.

Robinhood Reshuffling

Daniel Gallagher Jr., Robinhood’s law department leader, took on the new title of chief legal, compliance, and corporate affairs officer in January, the company said in its most recent proxy statement filed in May.

Gallagher joined Robinhood’s board in 2019 before being named its chief legal officer the following year. He wasn’t listed in the proxy as among the company’s six highest-paid executives last year, although Robinhood disclosed a $30 million pay package for Gallagher in 2020.

Robinhood recently recruited an assistant general counsel from Cooley in Walker Newell, a former US Securities and Exchange Commission lawyer who had come into the crosshairs of technology mogul Elon Musk, Bloomberg Law reported last month.

Eric Burt, a former consulting attorney at legal staffing company Axiom Global Inc., also joined Robinhood in May as an associate general counsel for corporate, securities, and transactions.

Robinhood this month welcomed Nada Bseikri as assistant general counsel for privacy and data protection. She was most recently an assistant general counsel and chief privacy officer at New York’s Apple Bank for Savings.

The company also this month hired Gabriella Geanuleas as assistant general counsel for litigation, regulatory enforcement, and investigations. She spent the past seven years as a trial attorney for the Commodity Futures Trading Commission.

Melnicki’s role running compliance for Robinhood’s crypto team has been absorbed by James Nguyen, who has been president and general counsel of the company’s crypto division. Norman Ashkenas, an attorney hired by Robinhood in September 2020 to serve as compliance chief for its brokerage business, was also named the top compliance executive for all Robinhood-related entities in January.

Melnicki

Robinhood recruited Melnicki last year from Grayscale Investments, a digital asset manager currently battling the SEC over its crypto-related business plans.

Grayscale hired Melnicki as its compliance chief in early 2021 from Ripple Labs Inc., a San Francisco-based technology company also fighting the SEC over a proposal to register digital assets as securities.

Melnicki, who was a regulatory counsel and Americas head of regulatory affairs at Ripple, has previously worked in-house at Bank of America Corp., Cantor Fitzgerald, and Puerto Rico’s Noble Bank International.

(Adds two Robinhood legal hires in 17th, 18th paragraphs.)

To contact the reporter on this story: Brian Baxter in New York at bbaxter@bloomberglaw.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloomberglaw.com; John Hughes at jhughes@bloombergindustry.com