Mark Smith’s Path To Electronic Trading: From Banking to Blockchain

Jul 29, 2022

John Lothian

John Lothian

Executive Chairman and CEO

Part Two of the Marketswiki Education Video Series Interview with Entrepreneur Mark Smith

Mark Smith started his career at broker-dealer Edward Jones, became an entrepreneur and then after his second firm was purchased by Citi, he found himself working for the bank, which he found an eye-opening experience.

The speed and risk taking of entrepreneurship was replaced by careful, considered bureaucracy.

It was a cultural mismatch that left him counting the days until he could leave. He went from being able to come up with an idea one week and implementing it the next to the idea being resourced and roadmapped and then maybe being implemented in a year.

This divergence in outcomes inspired Smith to want to try to be an entrepreneur again. So Smith and his former partners founded a bank.

In the banking world at Citi, Smith saw that there was a lot of technology that was entrenched, and, he said, “band-aided year after year.”

The bureaucracy of Citi evoked being caught in the Innovator’s Dilemma, Smith said. He wanted to use the internet as the front door of the bank, but regulations still needed to be followed for older strategic structures.

The firm owned a broker dealer and a futures commission merchant and wanted to buy a clearing house so they could provide a whole suite of financial products.

They had big plans and Smith raised $50 million and the bank opened its doors in November of 2007, when being a bank was not what you wanted to be as the banking economy was collapsing.

Despite their minute size and being more Main Street than Wall Street, Smith and his partners soon discovered the bank would be regulatory captured by new laws like Dodd Frank, which would make business harder to do and more expensive for a small operator like them.

They were forced to choose between being a bank or being a financial services firm and they really had no choice, they had to go with the bank charter and ditch the broker-dealer and FCM.

Smith was told by the banking regulators that the bank had to open 10 branches because it was going to be community banking that would save the world from the financial crisis. Smith and his partners were not cut out for this kind of banking, so they hired some bankers that were. They told the bankers to build it and sell it.

In 2012 they sold the bank to First National Bank of Boca Raton at a slight profit.

From there, Smith was inspired to find a technological solution to some of the regulatory problems he encountered with the banking experience. That led him to the Satoshi Nakamoto white paper. He started buying some bitcoin in 2010 and 2011 and began to look at it for a business opportunity in 2012.

He then founded a company called MathMoneyFX, which became Symbiont. He thought he was going to use the bitcoin blockchains, but instead pivoted in 2014 to build his own blockchain. That was when he changed the name of the company to Symbiont.

In the last eight years, Symbiont has built that platform and has engaged some of the largest financial institutions as investors, like Vanguard and Citi.

The backers of Symbiont include some of the people who have beaten Smith over the years. He kept a list of those people and reached out to them. They included Justin Brownhill of SenaHill Partners, LP and Neal DeSena. Duncan Niederauer is also an investor and joined the board. Dan Gallagher, formerly of the SEC and now chief legal officer of Robinhood, is a board member. Citi is an investor. Other familiar names are there too.

The Symbiont technology does not involve crypto economics, including no tokens.

Smith explains in the rest of the interview how Symbiont works and how they have worked with Vanguard, ISDA and others building solutions on their blockchain.

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