Posted In:

Citadel Securities, Paradigm, Crypto


#420
Take From The Poor To Give To The Rich

Published:

Jan 15, 2022


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Posted In:

Citadel Securities, Paradigm, Crypto

Published:

Jan 15, 2022


Author:


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First they come for your constitution. Then they come for your coins.

Citadel Securities — a leading global electronic market maker and WallStreetBets public enemy number one at the center of Robinhood’s payment for order flow model — this week announced a $1.15b investment from Sequoia and prominent crypto fund Paradigm. The deal is the first time the firm has taken outside money since forming in 2001, valuing the market maker at roughly $22b.

The press release of the deal notably raised eyebrows, particularly for crypto market participants, with a statement from Paradigm signaling that the firm could soon be providing its ‘technology and expertise’ to more markets, including crypto.

Crypto market structure has rapidly evolved in the past few years, but a firm as large and impactful as Citadel Securities entering the crypto market would only further accelerate that maturation. And the numbers speak for themselves. Last summer, Citadel Securities automated equities platform traded nearly 40% of all US listed equities retail volume and 99% (!) of US-listed options volume — making them the largest wholesale market maker in the industry.

Given Citadel chairman Ken Griffin's history of apathy and at times direct distaste towards crypto, some may be wondering what’s changed? While it’s hard to know exactly what to interpret from the headlines, speculation abound, one nugget to point to was Griffin’s comment last year at a conference that the firm would only enter crypto once they felt the regulatory outlook environment was more clear and properly regulated.

It’s also becoming harder to ignore the success that others have had to date in crypto. On brand with the competitiveness (and his son’s advice) that led Griffin to outbid a crypto collective that raised over $40m to buy a rare copy of the US constitution, maybe the move simply is Citadel Securities eyeing the one last asset class it’s not top of the league tables — yet.

Portfolio News


Bottlepay becomes the first lightning company to be a registered cryptoasset business with the FCA - Bottlepay is one of a small number of cryptoasset firms to have secured such approval and is the first Lightning Network payments company to have done so. The registration marks a milestone in the maturation of Bitcoin’s Lightning Network and will further the development of the financial infrastructure of the future. Read more

The different paths to innovation in neobanking in Latin America - FTC's Carlos Alonso Torras spoke about the future of neobanking in the LendIt Fintech LatAm 2021 conference, alongside portfolio company CEOs Norman Muller and Vilash Poovala. Co-founders and CEOs of Fondeadora and Oyster, respectively. Read more

Take From The Poor To Give To The Rich


Ken Griffin’s Citadel Securities sells $1.15b stake to Sequoia and Paradigm - The deal values Citadel Securities at $22b, and is the first time it has taken any outside investors. Griffin plans to spend the money on more aggressive international expansion. Read more

Citadel Securities gains new partners - The move brings Citadel Securities closer to crypto, as Paradigm focuses on investing in crypto and Web 3-related firms. Up until this point, Citadel Securities has avoided trading cryptocurrencies because of what Griffin has called regulatory uncertainties around them. Read more

Industry News


World’s biggest crypto fortune began with a friendly poker game - Zhao's road to crypto riches began in Shanghai in 2013 during a friendly poker game with Bobby Lee, then CEO of BTC China, and investor Ron Cao, who both encouraged him to put 10% of his net worth into Bitcoin. After spending some time studying it, he took the plunge and ended up selling his apartment for Bitcoin. In 2017, he founded Binance (a portmanteau of binary and finance) and it quickly blossomed into a crypto powerhouse. Read more

Coinbase buys FairX to launch crypto derivatives - The move could open the door for Coinbase to offer crypto derivatives products in the U.S. At present, only a handful of exchanges allow U.S. investors to trade bitcoin and ether futures, with cash-settled products being both the most popular and the longest-available products. FTX.US acquired LedgerX last August with a similar aim. Read more

Citigroup to exit Mexico consumer banking business - The bank said this week it would exit consumer, small-business and middle-market banking in Mexico, a business best known as Banamex. Citigroup said the change was part of its continuing “strategic refresh.” Read more

PayPal mulling proprietary stablecoin to help drive platform growth - The potential stablecoin could be used alongside Bitcoin to make purchases through Checkout with Crypto and could be purchased on PayPal’s exchange to help drive volume—though the latter’s viability will depend on establishing consumer interest and adoption. Read more

TPG prices IPO at $29.50 a share - Publicly traded private-equity firms have posted strong performance since the U.S. economy emerged from the coronavirus-driven downturn. Low interest rates have made borrowing cheap and prompted institutional investors to pour money into the asset class. Including dividends, shares of industry behemoth Blackstone have more than doubled in the past year alone. Read more

Goldman Sachs steps into ‘growth mode’ in Latin America after record year in revenue - Goldman's revenue in Latin America was driven by a record year in asset management, global markets and investment banking; with revenue up 60% in the region compared with the previous five years. Read more

TransUnion brings credit data checks to crypto lending - TransUnion will let consumers give blockchain companies access to their personal credit data through the security firm Spring Labs’ ky0x Digital Passport. Consumers will be able to receive better interest rates when borrowing money from financial-services companies that operate on public blockchains such as Ethereum by providing this information, the companies said. Read more

There’s still no Amazon for housing, but fintech’s working on it - The bumpy year underscored a problem that’s been holding back the adoption of technology in real estate for the past two decades. Each sale of a home involves hundreds of thousands if not millions of dollars, and no two properties are exactly alike. Read more

GM launches new credit card with Goldman Sachs - General Motors launched a credit card this week with Goldman Sachs, and revamped its rewards program to let customers earn more points to put toward buying or leasing Buicks, Cadillacs and other GM cars, the automaker and bank said in a joint statement. Read more

India’s central bank starts fintech division - India’s central bank is setting up a FinTech department to drive innovation, oversee the exchange of cryptocurrencies and develop regulations for the release of its upcoming central bank digital currency (CBDC). Read more

SEC pushes for more transparency from private companies - The SEC has begun work on a plan to require more private companies to routinely disclose information about their finances and operations, according to a semiannual rule-making agenda and people familiar with the matter. It is also considering tightening the qualifications that investors must meet to access private markets, and increasing the amount of information that some nonpublic companies must file with the agency. Read more

China offers digital Yuan at Olympics to test overseas appeal - With less than a month to go before kickoff, and the event already encumbered by diplomatic boycotts and the threat of virus outbreaks, China is looking to use the games to showcase the digital yuan’s clout globally. Visitors can download an app or get a physical card that stores the digital yuan, or convert foreign bank notes into e-CNY at self-service machines, according to the Bank of China Ltd., a state lender and official partner of the games. Read more

Underused office buildings get new life as deluxe apartments - With multifamily housing in short supply and rents hitting record highs the U.S.'s surplus of outdated office buildings could be ripe for apartment conversion. As a note there were 151 office buildings, hotels, or other commercial properties that were converted to apartments in the U.S. in 2021. Read more

Select Financings


Accelerant - Atlanta based insurance risk exchange raised $193m in new funding led by Eldridge Industries. Read more

Accrue Savings - Delaware based “save now pay later” startup raised $25m in Series A funding led by Tiger Global. Read more

Acorn Finance - Sacramento based marketplace for home improvement financing raised $8.4m in Series A funding led by MassMutual Ventures. Read more

AcreTrader - Arkansas based farmland investing platform raised $40m in Series B funding led by Anthemis Group. Read more

Alasco - Munich based financial management platform for real estate projects raised $40m in Series B funding led by Insight Partners. Read more

Bolt - San Francisco based e-commerce checkout experience company raised $355m in Series E funding led by BlackRock. Read more

Brex - San Francisco based corporate credit card company focused on startups raised $300m in Series D-2 funding led by Greenoaks and TCV. Read more

CAIS - New York based alternative investment platform for financial advisors raised $225m in growth funding led by Apollo and Motive Partners. Read more

Checkout.com - London based online payments platform raised $1b in new funding from investors including Franklin Templeton, Qatar Investment Authority, Insight Partners and Tiger Global. Read more

Conduit - Boston based API for decentralized finance products raised $17m in Seed funding led by Portage Ventures. Read more

Gr4vy - San Mateo based provider of cloud-native payments orchestration solutions raised $15m in Series A extension funding led by March Capital. Read more

KionWorks - Indonesia based financial platform for SMEs raised $43m in Series C funding led by MDI Ventures. Read more

Novo - Miami based neobank for SMBs raised $90m in Series B funding led by Stripes. Read more

Paysail - San Francisco based invoicing payments platform that leverages asset-backed stablecoins raised $4m in Seed funding led by Uncork Capital. Read more

Pluang - Jakarta based investment app raised $55m in Series B extension funding led by Accel. Read more

PrimaryBid - London based new public share investment platform is raising $150m in Series C funding led by SoftBank. Read more

Qonto - France based challenger bank focused on businesses raised €486m in Series D funding led by Tiger Global and TCV. Read more

Qraft Technologies - Seoul based enabled fintech company raised $146m in new funding led by SoftBank. Read more

Refyne - India based earned wage access platform raised $82m in Series B funding led by Tiger Global. Read more

SEBA Bank AG - Switzerland based online bank focused on digital assets raised $119m in Series C funding led by a consortium of investors including Altive, Ordway Selections, Summer Capital and DeFi Technologies. Read more

Twig - London based cash-out app for lifestyle assets like fashion raised $35m in Series A funding led by Fasanara Capital. Read more

Web3Auth - Singapore based crypto onboarding and authentication startup raised $13m in Series A funding led by Sequoia Capital India. Read more

Zero Hash - Chicago based B2B digital-asset-as-a-service infrastructure platform raised $100m in Series D funding from investors including Bain Capital, NYCA, and Point72 Ventures. Read more

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