The former director of Trump Gary Cohn joins L.A. Blockchain Start-Up

Spring Labs, a start-up company in Los Angeles that wants to reorganize the consumer credit industry using blockchain technology, added Gary Cohn, Goldman Sachs' former executive and financial aid to President Trump, to his board of advisors.

The announcement marks Cohn's biggest move since he ended his sometimes harsh mandate with the Trump administration. The former official was a key figure in the White House tax reduction plan, but resigned in March as director of the National Economic Council in opposition to Trump's tariffs on aluminum and steel.

Cohn joins a board of consultants that already boasts a number of high-profile names, including Sheila Bair, former president of Federal Deposit Insurance Corp .; Nigel Morris, co-founder and former president of the Capital One bank; and Bobby Mehta, the former CEO of the TransUnion credit office.

Their association gives instant start-up credibility in an emerging field of technology that has potential widespread applications, but has been overshadowed by its association with fraudulent cryptocurrency offers. Last year, JP Morgan's managing director, Jamie Dimon, called bitcoin a fraud and "worse than tulip bulbs".

Others remain bullish on the technology. Walmart recently announced that its lettuce suppliers will need to use blockchain so that any outbreaks of foodborne diseases can be traced more quickly.

Blockchain is essentially a digital ledger maintained on millions of computers simultaneously. This decentralized network prevents any person from taking ownership of the ledger and corrupting it. When changes are made, anyone with access to the ledger can see the changes.

Spring Labs, which raised $ 14.8 million in seed funding in March, believes that the application of blockchain to consumer credit could help fight off hackers and simplify the way in which financial institutions access personal credit ratings. By sharing such data using blockchain, banks can potentially circumvent credit reporting companies such as Equifax and Experian, which aggregate consumer credit information and sell it to banks. Stricter security can also help prevent violations such as the one that affected 148 million Equifax customers in 2017.

"I've been very interested in blockchain technology for a number of years, and Spring Labs is developing a network that could have profound implications for the financial services industry, among others," Cohn said in a corporate press release. "I am thrilled to actively support the Spring Labs team in developing this important business and network."

Cohn received an undisclosed share of equity in Spring Labs. Adam Jiwan, CEO of Spring Labs, said that Cohn and the other 11 members of the company's board of directors have an equal participation in the Marina del Rey study.

"Gary brings an imprimatur of credibility and validation," said Jiwan. "This does not mean we can not fail, but we have tried to maximize the probability of success by taking on the brightest and surrounding ourselves with the best people we can."

Spring Labs was founded in 2017 by Jiwan, Anna Fridman and John Sun, who are also the founders of Avant, an online lender that gave rise to nearly $ 5 billion in loans and venture capitalist Peter Thiel as investor. Spring Labs also has an office in Chicago.

Jiwan said he was introduced to Cohn by a mutual friend at the investment bank Goldman Sachs. Jiwan gave his speech to the former administration official for breakfast, arguing that a decentralized network could have sensed an increased risk in the US real estate market before the 2008 financial crisis. Jiwan told Cohn that he wanted his help navigating the financial sector with all his regulations.