Join ’em if you can’t defeat ’em. Citadel Securities is following this approach with its newest endeavor. Even as its creator expresses his own mistrust about the market, the market-making behemoth is getting into the crypto game. Will a Citadel crypto product, backed by some of the industry’s greatest venture capital companies, become a market leader among exchanges?
Ken Griffin, a seasoned investor, launched Citadel Securities. He founded it 20 years ago to offer liquidity and trade execution for both institutional and retail customers. Citadel LLC, a hedge fund formed by Griffin, is its sibling firm.
Citadel is one of the world’s leading market makers, with operations in over 50 countries. Investors have been speculating about the likelihood of a Citadel initial public offering in recent months (IPO). The rumors surface as the business receives a $1.15 billion investment from Sequoia Capital and Paradigm, two venture capital companies. Citadel has not commented on the possibility of an IPO, although it is thought that this investment is one of the first stages.
As a consequence of its relationship with Robinhood, the firm has gotten a lot of attention (NASDAQ:HOOD). Citadel Securities is the company’s primary market maker for its e-trading platform. In early 2021, both were scrutinized by individual investors as the Securities and Exchange Commission (SEC) looked into Robinhood’s payment-for-order-flow strategy.
The Securities and Return Commission (SEC) questioned whether the concept allowed market makers to profit from retail transactions in exchange for kickbacks. However, when a court rejected a class action lawsuit filed by retail dealers, most of the buzz has died down.
Citadel Crypto Exchange is Coming Soon, Despite Griffin’s Reservations About Cryptocurrency
With another big piece of news, the firm is building on the buzz it’s gotten in the previous 18 months. A Citadel cryptocurrency exchange is on the way, according to CoinDesk. The announcement comes only weeks after Griffin called for more crypto regulations.
According to the article, the business is working on its own cryptocurrency trading floor alongside fellow market-maker Virtu Financial. Citadel is hesitant to label the offering a centralized exchange since it sounds like a VC-backed one. Citadel defines the upcoming offering as “more of a crypto trading ecosystem or marketplace than an exchange,” according to a person close to the announcement.
The corporation has been recruiting individuals to lead a bigger crypto division in preparation for the trading product’s launch. Citadel does not seem to be content with merely a trading platform for its crypto ventures.
Griffin’s opinion on cryptocurrency makes this revelation all the more intriguing. Indeed, he has already expressed his distrust about the asset class. He even went so far as to term crypto a “jihadist appeal” against fiat money in October of last year.
In March, he softened his attitude, admitting that he “hasn’t been correct” on the larger market. However, this does not imply that he is a raging bull. Griffin has urged for greater rules to be imposed on the market by authorities. Griffin wants to see crypto projects pushed to provide greater transparency into their operations, citing the collapse of the Terra Classic (LUNC-USD) ecosystem as an example.