Citadel plans to expand into the crypto market amid regulatory shifts
Bloomberg News reported that Citadel Securities plans to expand its crypto market-making business with the goal of providing liquidity for major crypto exchanges.
According to people familiar with the situation, the company is planning to join the crypto market by becoming a market maker on platforms run by Coinbase Binance and Crypto.com.
Citadel’s crypto expansion, according to the sources, will first focus on non-US exchanges and markets, pending approval.
The company has not yet confirmed the extent of their market-making ambitions. Their involvement will depend on the regulatory developments that occur in the next few months.
Market impact and regulatory landscape
Citadel, unlike some of its trading counterparts, has not been directly involved in the crypto market-making. Jane Street Group, which is a major player on the exchange-traded fund (ETF) and corporate bond market, has been trading crypto since 2017.
Jump Trading also established a cryptocurrency division, Jump Crypto. It became one of leading liquidity providers.
Jane Street and Jump Crypto were forced to reduce their US-based trading of digital assets in 2023 due to regulatory challenges. Increasing regulatory scrutiny led to many firms shifting their focus towards international financial hubs like Dubai, Singapore and Hong Kong.
Citadel’s expansion is therefore a sign that the crypto market has matured. This depends on a regulatory framework that will allow established financial firms, following the election of President Donald Trump, to be more active.
Trump promised to make the US the “crypto-capital of the world.” Since his election, Trump’s administration has issued a number of statements. Executive order On crypto to create a regulating framework.
The Securities and Exchange Commission established a Dedicated crypto task force Hester Peirce is a pro-crypto commissioner who has been known to support pro-innovation regulations.
Citadel has developed the EDX Exchange with Charles Schwab & Fidelity Investments, despite its cautious stance on the crypto-market. The exchange was designed to mimic the settlement and custodial mechanisms used by traditional securities markets, but for institutional clients.
