(Bloomberg) — Citadel Securities LLC’s pursuit of Silicon Valley funding may be as much about billionaire Ken Griffin’s firm finally embracing cryptocurrencies as it is about raising money.
The Chicago-based electronic market maker revealed a $1.15 billion investment from Sequoia Capital and Paradigm, two venture capital firms with extensive interests in crypto, hinting at Citadel Securities’ potential entry into the space via firms that can help it gain expertise.
San Francisco-based Paradigm announced in November that it is launching a record $2.5 billion venture-capital fund aimed at crypto companies and protocols, while co-founder Matt Huang was formerly a partner at Sequoia Capital and Fred Ehrsam, another co-founder, helped start crypto exchange Coinbase Global Inc.
With the investment, Huang said Paradigm looks forward to “partnering with the Citadel Securities team as they extend their technology and expertise to even more markets and asset classes, including crypto,” according to a statement on Tuesday. Sequoia Capital is also leaping into the crypto space, bankrolling a bevy of startups focused on the its ecosystem and the underlying technology. The cash injection could lead to an eventual initial public offering, according to people with knowledge of their plans.
Read more: Griffin Sets Citadel Securities on IPO Path With Tech Backers
Some of Wall Street’s trading giants, including Jump Trading, Jane Street, and Hudson River Trading, have already been active players in crypto trading in the past few years, as they apply their quantitative approach to a nascent market full of volatility and inefficiencies. Jump, for instance, powers Robinhood Markets Inc. customers’ free crypto trades and has expanded its crypto arm as it positions itself a major player in digital assets.
Coming Around
Griffin, however, has been a skeptic of the asset class, equating it in October to “a jihadist call” by those who don’t believe in the dollar and that he is not a fan of the resources allocated to the digital assets. Still, he said his firm would trade cryptocurrencies if they were properly regulated and praised Securities and Exchange Commission Chair Gary Gensler for applying greater scrutiny to cryptocurrencies.
In November, Griffin outbid a group of crypto investors under the name of ConstitutionDAO for a copy of the U.S. Constitution. He gave credit to the group for raising more than $40 million, and said digital assets “speak to the desire to change America.” He has also recently come around on Ethereum, saying Bitcoin would be replaced “conceptually” by Ethereum’s blockchain.
“The train is, in some sense, still in the station,” Griffin said at a DealBook conference last year as he explained he isn’t worried he missed out on crypto. Tuesday’s announcement suggests he may be ready to get on board.
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