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Key Takeaways:
- Citadel Securities is expanding into cryptocurrency market-making, targeting major exchanges such as Coinbase and Binance as regulatory ambiguity diminishes.
- The firm’s entry signifies a strategic move to take advantage of competitors’ withdrawal from the U.S. crypto market amid stricter regulations.
- The Trump administration’s favorable view towards cryptocurrency may foster a more accommodating regulatory environment and stimulate institutional involvement.
Citadel Securities is entering the crypto market-making arena, positioning itself as a liquidity provider in anticipation of regulatory changes following the 2024 U.S. presidential election.
Ken Griffin’s market-making firm Citadel Securities is aiming to become a liquidity provider for cryptocurrencies, betting that President Donald Trump’s support for the industry will lead to growth for the asset class. https://t.co/uUMAU2CsO4
— Bloomberg (@enterprise) February 24, 2025
Bloomberg reported on Monday that Citadel Securities is working to establish a presence on major cryptocurrency exchanges, including Coinbase, Binance, and Crypto.com.
This represents a strategic shift for the market-making giant, which had previously adopted a cautious approach to digital assets, steering clear of retail-oriented platforms due to regulatory uncertainties in the U.S.
Citadel Securities’ Crypto Strategy Develops Outside the U.S.
Citadel Securities intends to initiate its crypto operations outside the U.S., with potential expansion dependent on regulatory developments. The firm has not yet made a public announcement regarding its strategy.
In contrast to competitors like Jane Street and Jump Crypto, the firm has largely steered clear of digital assets.
$64 billion asset manager Citadel to offer crypto trading and become a liquidity provider for cryptocurrencies.
Woah wow.. What’s next?
pic.twitter.com/7HqS9PBOZM
— Han Akamatsu 赤松 (@Han_Akamatsu) February 24, 2025
pic.twitter.com/7HqS9PBOZMHowever, with firms like Jane Street and Jump retreating from the U.S. crypto market following increased regulatory scrutiny in 2023, Citadel Securities appears to be seeking an opportunity to fill the void.
The firm has already ventured into digital assets through EDX Markets, an institution-only crypto exchange launched in 2023 in partnership with Charles Schwab and Fidelity Investments.
EDX was designed to leverage traditional market structures for crypto trading, providing institutional investors with a familiar model for execution and settlement.
Citadel Securities’ expansion into crypto aligns with broader industry efforts to navigate changing U.S. regulations on digital assets.
Trump Administration Advocates for U.S. as ‘Crypto Capital’
During the Future Investment Initiative conference in Miami last week, Donald Trump expressed his vision of the U.S. as a global center for cryptocurrency.
President Donald Trump reiterated his vision of making the U.S. the “crypto capital” at a Miami conference. Will this stance drive policy changes? #CryptoRegulation #CryptoPolicy #Web3https://t.co/0HP5gog3PA
— Cryptonews.com (@cryptonews) February 20, 2025
He demonstrated similar pro-crypto campaign promises at the Bitcoin 2024 conference last year, where he stated that the U.S. would become a “Bitcoin superpower.”
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Despite Trump’s previous skepticism—labeling Bitcoin a scam in 2019—his position has shifted significantly.
Since taking office, he has issued an executive order on digital assets and supported the SEC’s establishment of a crypto task force led by Hester Peirce. His administration has also formed a national crypto policy group.
Nonetheless, Trump’s approach has faced criticism, particularly following the launch of his meme coin, TRUMP. The coin’s significant price decline raised questions about its legitimacy.
Critics contend that industry growth necessitates a stable regulatory framework rather than speculative hype.
Meanwhile, the SEC and CFTC are exploring collaboration on crypto regulations, discussing the revival of a joint advisory committee that would provide clearer guidelines for the industry.
Fox Business journalist @EleanorTerrett reports that the SEC and CFTC are in discussions to join forces on crypto regulation, a potential breakthrough the industry has been awaiting.
#Cryptoregulation #SECandCFTChttps://t.co/0KaMMCmlkl— Cryptonews.com (@cryptonews) February 13, 2025
Fox Business journalist @EleanorTerrett reports that the SEC and CFTC are in discussions to join forces on With leadership changes occurring at both agencies, the crypto sector is closely monitoring for possible shifts in policy direction.
Frequently Asked Questions (FAQs)
How does Citadel’s EDX Markets initiative differ from its new crypto market-making plans?
EDX Markets, launched in 2023 with Fidelity and Charles Schwab, is an institutional-only crypto exchange that mirrors traditional settlement processes. In contrast, Citadel’s new market-making strategy initially targets retail-focused platforms like Coinbase and Binance through non-U.S. teams to circumvent regulatory uncertainty. This dual approach allows Citadel to serve both institutional and retail segments while assessing regulatory conditions.
What specific regulatory changes did Trump’s 2025 executive order introduce for crypto?
Trump’s January 2025 executive order revoked previous crypto frameworks, opposed a U.S. central bank digital currency (CBDC), and established a working group to develop federal crypto regulations. It prioritizes private-sector stablecoins over CBDCs and mandates agencies to review conflicting guidance, indicating a deregulatory shift aimed at promoting private innovation.
How might the SEC-CFTC joint advisory committee reshape crypto compliance?
The revived committee aims to align regulatory efforts between the two agencies, address jurisdictional overlaps, and create standardized disclosure frameworks. This could reduce compliance costs for companies navigating fragmented regulations, particularly regarding stablecoins and token classification. The collaboration may also expedite the approval of crypto ETFs and derivatives products.
Why did Citadel delay crypto entry until 2025 despite rivals’ earlier moves?
Citadel avoided crypto due to concerns about market structure integrity and regulatory risks following the FTX collapse. While competitors like Jane Street entered earlier, the 2023 regulatory crackdown forced them to scale back U.S. operations, creating a liquidity gap that Citadel now aims to fill under clearer Trump-era policies.
What operational risks may challenge Citadel’s crypto market-making ambitions?
Key risks include reliance on evolving U.S. regulations, potential conflicts of interest in multi-exchange operations, and competition from established crypto-native firms like Jump Trading. Additionally, replicating equities-level liquidity in crypto’s 24/7 markets necessitates technological adaptation.
The post Ken Griffin’s Citadel Securities Eyes Crypto Market-Making on Coinbase and Binance appeared first on Cryptonews.
