The decentralized derivatives exchange Injective Protocol joins a wave of other crypto startups who have bolstered their legal departments with lawyers from top international firms. Injective is backed by several-profile crypto investment firms, crypto exchanges, and entrepreneur Mark Cuban.
Brandon Ferrick, a former lawyer at Sullivan & Cromwell LLP, was hired as general counsel. Ferrick spent three years at the renowned New York law firm before transitioning in-house.
“My goal is to work with interest groups, lawmakers, and regulators to parse these important distinctions to ensure DeFi markets remain safe, efficient, and open to all,” Ferrick said.
Injective Protocol’s Unique Crypto Edge
Injective offers derivatives, forex, cross-chain margin trading, synthetic tokens, and futures trading. One of its goals is to build a decentralized platform that is an alternative to Robinhood Financial. Injective believes operating in a decentralized manner would avoid the trading halts Robinhood experienced in 2021 with certain meme stocks.
The platform features high speeds, low transaction fees, and protection from front running, scams, and hacking. It also does not charge gas fees, which are typical on centralized crypto exchanges. Gas fees are payments required for the energy needed to validate transactions on the Ethereum blockchain.
Mark Cuban is optimistic about his strategic investment. “Why do I invest in Injective: the whole stop out because of the capital requirements, Robinhood didn’t do it on purpose to hurt traders, they just didn’t have enough equity and they would have gone bankrupt because they had too many customers,” said the billionaire entrepreneur and Shark Tank judge. “But if you’re doing it in a decentralized manner, every investor gets to see how much Injective has of all of this, there’s no hiding it and that creates an opportunity.”
Injective Protocol believes that it combines the advantages of other decentralized crypto exchanges. The startup’s competitors include both centralized and noncentralized exchanges, and its main competitors include CME Group, BitMEX, LedgerX, and OKEx. In addition to facilitating derivatives trading, developers can create their own derivatives and markets to trade.
“Legacy institutions and practices create a number of artificial delays and middlemen that prevent innovation in the financial markets ecosystem,” stated Eric Chen, CEO. “At Injective, our goal is to enable an unparalleled decentralized trading experience, whereby retail traders globally can for the first time access limitless markets without the typical predatory fees and slow transaction times.”
Bolstering In-House Legal Departments with Law Firm Hires
The startup is far from novel in hiring in-house lawyers directly from top law firms. As regulators concentrate their focus on cryptocurrency markets, it is critical for startups in the space to have expert legal support.
Andreessen Horowitz’s a16z crypto team hired Miles Jennings, former partner from Latham & Watkins LLP, as its general counsel. The a16z crypto investment vehicles have raised billions of dollars to allocate to crypto and web3 investments.
While a law firm partner, Jennings co-chaired Latham & Watkin’s global blockchain and cryptocurrency task force. He began in the space in 2017 working with ConsenSys as a firm client. He subsequently advised many major venture firms who invested in crypto, helping them navigate acquisitions, financings, fund investment structurings, and regulatory challenges. His breadth of knowledge will be critical to a16z’s efforts to support its portfolio companies and evaluate new investment opportunities.
More Crypto Private Practice Lawyers
In a similar vein, the cryptocurrency loan company Celsius Network Ltd. hired a number of lawyers from private practice. Celsius Network is a blockchain-based platform that provides low-cost loans and compounding yield services. The company raised $400 million in October 2021 and has a $3 billion valuation.
Celsius Network hired Ron Deutsch, a former mergers and acquisitions attorney at law firm Paul Weiss, as general counsel. Mr. Deutsch is in charge of legal, regulatory, and corporate governance functions at the crypto company. He also provides legal guidance on acquisition and investment opportunities. In addition, Celsius Network has hired several lawyers to fill senior corporate counsel positions from Paul Weiss and other large corporate law firms. Private practice legal expertise is useful in the rapidly evolving digital asset market.
With respect to being an in-house lawyer at a crypto company, Ferrick believes “the biggest challenge for the digital asset space is precision of language.” Ferrick added that regulatory frameworks can only be designed when lawmakers understand “important nuances in this nascent and complicated environment.”