Citadel Securities invests $400mn in Crypto.com at $20bn valuation

Crypto.com has secured a $400mn investment from Citadel Securities at a $20bn valuation, according to Finextra. The funding gives the digital asset exchange fresh institutional capital as it seeks to extend its business beyond crypto trading into tokenised securities, derivatives and other asset classes.

Finextra reported that the investment is Crypto.com’s first institutional funding round. The deal brings together a large market maker in Citadel Securities and a digital asset platform that says it serves millions of users worldwide.

The capital is expected to support Crypto.com’s expansion across asset classes and to help connect digital asset infrastructure with traditional market activity, Finextra reported. That strategy includes tokenised securities, which represent conventional financial instruments on distributed ledger-based systems, and derivatives, contracts whose value is linked to an underlying asset or benchmark.

For Crypto.com, the transaction adds a major traditional markets participant to its investor base. For Citadel Securities, the investment gives it exposure to a company seeking to build market infrastructure around digital assets and 24-hour trading models.

Push into broader market infrastructure

Crypto.com was founded in 2016 and has built its brand around digital asset exchange services. Finextra reported that the company claims millions of users worldwide.

The exchange has also been pursuing a broader regulated footprint in the United States. Finextra said Crypto.com recently received conditional approval from US regulators for a national trust bank charter, making it one of the latest digital asset firms to gain that status.

A national trust bank charter can give a firm a regulated framework for certain custody and trust activities, subject to supervisory conditions. Finextra did not provide further details on the conditions attached to Crypto.com’s approval.

The latest funding is expected to speed the company’s move into products that sit closer to traditional capital markets, Finextra reported. In practical terms, that means using digital asset systems for instruments beyond cryptocurrencies, including securities represented in token form and derivatives trading infrastructure.

Executives cite convergence of markets

Kris Marszalek, chief executive of Crypto.com, said the company sees crypto infrastructure becoming part of wider financial rails. “The size of the opportunity in front of us is staggering, as crypto increasingly becomes the rails for finance,” Marszalek said, according to Finextra.

Marszalek said the company had spent the past decade building regulatory and technology infrastructure and was positioned to pursue growth across asset classes.

Jim Esposito, president of Citadel Securities, framed the investment around the link between established financial markets and digital asset systems. “The convergence of traditional financial markets and digital asset infrastructure is an exciting evolution with the potential to further improve market efficiency,” Esposito said, according to Finextra.

Finextra did not report additional terms of the transaction, including the ownership stake acquired by Citadel Securities, whether the valuation was pre-money or post-money, or any governance rights attached to the investment.

This story draws on original reporting from Finextra Research.