KEN Griffin’s market-making giant Citadel Securities is looking to become a liquidity provider for cryptocurrencies, betting US President Donald Trump’s embrace of the industry will usher in a boom for the asset class.
It’s a clear pivot from the firm’s previously cautious stance on crypto market-making. Citadel Securities has had a limited presence in crypto trading, having steered clear of exchanges frequented by retail investors due to a lack of regulations around it in the US.
The firm aims to get added to the roster of market makers on various exchanges, including those run by Coinbase Global, Binance Holdings and Crypto.com, according to sources familiar with the matter.
Once the firm is approved on exchanges, it initially plans to set up market-making teams outside the US, the sources said, asking not to be identified as the plans are not public. The extent of the push and Citadel’s desire could change based on how or if new regulations roll out in the coming months.
Miami-based Citadel Securities did not have an immediate comment.
Until now, Citadel Securities has stayed off major crypto venues frequented by retail traders. After the collapse of Sam Bankman-Fried’s FTX in 2022, crypto exchanges drew criticism for a failure to separate businesses – including custody, market-making and trading – that can result in conflicts of interest and in the manipulation of funds.
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To create some certainty and serve institutional clients, Citadel Securities teamed up with brokerage firms, including Charles Schwab and Fidelity Investments, to form an institution-only crypto exchange that mirrored the way assets are held and settled in stock and bond markets. That venue, EDX Markets, went live in 2023, and offers trading in crypto products only for institutional investors.
Citadel Securities and other financial firms have been pushing for regulators to establish rules around investing in digital assets, creating a roadmap for institutions to get involved. If the US does that, the firm wants to be ready to provide liquidity, buying and selling digital assets like they do in other asset classes such as equities and fixed income, the sources said.
‘Crypto capital’
The financial industry is gearing up for more activity in digital assets under the Trump administration.
As a candidate, Trump pledged to make the US the “crypto capital of the planet” and since taking power, he has sought to overhaul rules that chilled activity under president Joe Biden. Trump quickly issued an executive order on digital assets and the US Securities and Exchange Commission launched a task force on crypto headed by Hester Peirce, a longtime advocate for the industry.
Citadel Securities has grown from a small group built alongside Griffin’s hedge fund into a global trading behemoth not only in US-listed markets but also international ones, pushing into investment banks’ favoured products under the leadership of chief executive officer Peng Zhao. It’s a market maker in equities, options, corporate bonds, Treasuries and exchange-traded funds (ETFs).
But unlike its trading peers, the firm stayed away from crypto market-making. Jane Street Group, known for its dominance in markets such as ETFs and corporate bonds – which account for the majority of its business – has been executing crypto trades since 2017. Jump Crypto built out its own crypto unit to become one of the world’s top market-making firms for digital assets.
But both of those firms pulled back from trading digital assets in the US amid a regulatory crackdown in 2023. A spate of crypto probes in the US prompted companies to look towards financial hubs overseas, including Dubai, Singapore and Hong Kong. Jump and Jane Street continued market making in crypto, though on a smaller scale, never abandoning the asset class entirely. BLOOMBERG
