Citadel Securities, the prominent trading firm headed by CEO Peng Zhao, is preparing to expand into the cryptocurrency sector, betting on market growth fueled by former President Donald Trump’s pro-crypto policies. This marks a significant pivot for the firm, which had previously remained hesitant about cryptocurrency due to regulatory concerns.
Historically cautious about engaging with crypto, Citadel avoided major exchanges used by retail investors, citing uncertainty over regulatory frameworks. The firm, which began as a small operation, has grown into a global market-making giant in traditional financial instruments, including stocks, options, corporate bonds, Treasuries, and ETFs, often competing with leading investment banks.
Now, Citadel plans to take on the role of a market maker on major cryptocurrency exchanges such as Coinbase, Binance, and Crypto.com. Initially, the firm intends to set up operations outside the U.S., closely monitoring the evolution of domestic regulations.
This shift aligns with Trump’s ambitions to position the United States as the “crypto capital of the planet.” Since leaving office, Trump has introduced a series of policies to foster the growth of digital assets, including appointing SEC Commissioner Hester Peirce—an outspoken crypto supporter—to lead a new task force. These policy moves have prompted many financial institutions to reconsider their positions on crypto.
For years, Citadel avoided direct involvement in cryptocurrency, wary of issues related to transparency and potential conflicts of interest, particularly in the wake of the 2022 collapse of crypto exchange FTX. Instead, the firm formed a partnership with Charles Schwab and Fidelity to launch EDX Markets in 2023, a crypto exchange focused exclusively on institutional investors.
However, with regulatory clarity beginning to emerge, Citadel is now poised to extend its expertise in liquidity provision to the crypto market, mirroring its approach to traditional financial assets. The firm, alongside other major financial players, has advocated for clearer regulatory frameworks to encourage more institutional participation in the digital assets space.
While Citadel is late to the party, firms like Jane Street and Jump Crypto have been active in the crypto market since 2017. Despite scaling back their U.S. operations in 2023 in response to regulatory crackdowns, these firms have continued to engage with international markets, particularly in regions like Dubai, Singapore, and Hong Kong.
As Citadel Securities prepares to navigate this new frontier, the company is poised to reshape its role in the evolving cryptocurrency landscape, riding the wave of regulatory changes that promise to expand institutional involvement.
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