Global trading giant Citadel Securities has secured its first outside investment in a deal that may set the stage for it to move into digital assets.
Venture-capital firm Sequoia Capital and cryptocurrency investor Paradigm made the $1.15 billion investment, which values Citadel at around $22 billion.
According to The Wall Street Journal, Citadel’s majority owner, hedge fund billionaire Ken Griffin, has so far been “a crypto skeptic and avoided trading digital currencies in his businesses even as they have soared in price and popularity.”
But CoinDesk said the deal “brings Citadel Securities closer to crypto, as Paradigm focuses on investing in crypto and Web 3-related firms.” Paradigm’s portfolio includes Coinbase, Cosmos, Uniswap, and Ethereum scaling solutions like Optimism and Aztec.
In November 2021, the firm launched the largest crypto fund to date — $2.5 billion dedicated to Web3 projects.
“Citadel Securities has developed software and algorithms that have driven substantial improvement to market structures for the benefit of institutional and retail investors everywhere,” Matt Huang, co-founder and managing partner of Paradigm, said in a news release.
“We look forward to partnering with the Citadel Securities team as they extend their technology and expertise to even more markets and asset classes, including crypto,” he added.
Citadel, founded in 2002, handles about 27% of the shares that are traded in the U.S. stock market each day, according to its website. A large part of that volume comes from processing trades for online brokerages such as Robinhood.
The firm said the investment by Sequoia and Paradigm will give it capital to continue expanding globally.
“In Sequoia and Paradigm, we have partners that appreciate how the strength of our market expertise, advanced predictive analytics, and superlative software engineering can redefine an industry,” Griffin said.
Sequoia is one of the country’s largest venture firms with roughly $80 billion under management. It has backed companies including Airbnb and Google before they were publicly traded.
The Citadel investment “could be a precursor to an initial public offering,” the Journal speculated.