Key Takeaways:
Citadel Securities is expanding into cryptocurrency market-making, targeting major exchanges like Coinbase and Binance as regulatory uncertainty eases. The firm’s entry signals a shift to capitalize on competitors’ retreat from the U.S. crypto market amid tightening regulations. The Trump administration’s pro-crypto stance could create a friendlier regulatory environment and encourage institutional participation.Citadel Securities is entering the crypto market-making sector, positioning itself as a liquidity provider amid expectations of regulatory shifts following the 2024 U.S. presidential election.
Bloomberg reports on Monday that Citadel Securities is working to secure a foothold on major cryptocurrency exchanges, including Coinbase, Binance, and Crypto.com.
This marks a shift in strategy for the market-making giant, which had previously taken a cautious approach to digital assets, avoiding retail-focused platforms due to regulatory uncertainties in the United States.
Citadel Securities’ Crypto Strategy Develops Outside the U.S.
Citadel Securities plans to launch its crypto operations outside the U.S., with potential expansion hinging on regulatory developments. The firm has yet to issue a public statement on its strategy.
Founded by Ken Griffin, Citadel Securities has become a dominant global trading force, providing liquidity across equities, options, corporate bonds, Treasuries, and exchange-traded funds.
Unlike competitors such as Jane Street and Jump Crypto, the firm has largely avoided digital assets.
However, with firms like Jane Street and Jump pulling back from the U.S. crypto market following increased regulatory scrutiny in 2023, Citadel Securities appears to be looking for an opportunity to fill the gap.
The firm has already entered digital assets through EDX Markets, an institution-only crypto exchange launched in 2023 in collaboration with Charles Schwab and Fidelity Investments.
EDX was designed to apply traditional market structures to crypto trading, offering institutional investors a familiar model for execution and settlement.
Citadel Securities’ expansion into crypto aligns with broader industry efforts to navigate evolving U.S. regulations on digital assets.
Trump Administration Pushes for U.S. as ‘Crypto Capital’
During the Future Investment Initiative conference in Miami last week, Donald Trump stated that he envisions the U.S. as a global hub for cryptocurrency.
He demonstrated similar pro-crypto campaign promises at the Bitcoin 2024 conference last year, where he declared that the U.S. would become a “Bitcoin superpower.”
Despite Trump’s past skepticism—calling Bitcoin a scam in 2019—his stance has shifted dramatically.
Since taking office, he has issued an executive order on digital assets and supported the SEC’s formation of a crypto task force led by Hester Peirce. His administration has also formed a national crypto policy group.
However, Trump’s approach has been criticized, especially after the rollout of his meme coin, TRUMP. The coin’s sharp price drop raised doubts about its legitimacy.
Critics argue that industry growth requires a stable regulatory framework, not speculative hype.
Meanwhile, the SEC and CFTC are exploring collaboration on crypto regulations, discussing the revival of a joint advisory committee that could provide clearer guidelines for the industry.
With leadership changes underway at both agencies, the crypto sector is watching closely for potential shifts in policy direction.
Frequently Asked Questions (FAQs)
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 bypass regulatory uncertainty. This dual approach allows Citadel to cater to institutional and retail segments while testing regulatory waters.
Trump’s January 2025 executive order revoked prior 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, signaling a deregulatory shift aimed at fostering private innovation.
The revived committee looks to align regulatory efforts between the two agencies, address jurisdictional overlaps, and create standardized disclosure frameworks. This could reduce compliance costs for firms navigating fragmented rules, particularly around stablecoins and token classification. The collaboration may also accelerate the approval of crypto ETFs and derivatives products.
Citadel avoided crypto due to concerns about market structure integrity and regulatory risks after the FTX collapse. While rivals like Jane Street entered earlier, the 2023 regulatory crackdown forced them to scale back U.S. operations, creating a liquidity gap Citadel now intends to fill under clearer Trump-era policies.
Key risks include dependency 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 requires technological adaptation.
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