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By: Brad Koeppen, CMT Digital and Ryan Gentry, Lightning Labs

When the investment bank Lehman Brothers collapsed on September 15, 2008, its failure, and the ensuing capital markets crisis, revealed a fatal flaw in the prime brokerage business: concentrated counterparty risk. By using a single prime broker for all of their needs — trading, settlement, leverage, securities lending — hedge funds and institutions amassed too much exposure to one counterparty. In this case it was Lehman Brothers, which had one of the biggest prime brokerage units on Wall Street. …

CMT Digital Limited

CMT Digital, a division of the CMT Group, is focused on crypto asset trading, blockchain tech investments, & legal/policy engagement.

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