Cohen’s new crypto-focused entity, which is still in its early innings, is dubbed “On-Chain Investments”
The endeavor builds on his widespread venture capital-style, having backed crypto startups personally via his family office and Point72 Ventures

Steve Cohen has hired self-styled cyberpunk and reformed hacker “Acidphreak” as the first — and, so far, only — portfolio manager to lead investments for his new crypto-only asset manager.

Elias Ladopoulos, better known as “Acidphreak” from his time leading the New York-based “Masters of Deception” hacker collective, joined Cohen’s On-Chain Investments unit in June, according to two sources familiar with the matter.

The sources, who were granted anonymity to discuss sensitive business dealings, categorized the hire as “somewhat surprising” for Cohen, noting Ladopoulos’ relative lack of Wall Street ties.

It indicates Cohen, a hedge fund billionaire, is prioritizing bring crypto natives on staff at On-Chain — a departure from most of Wall Street’s digital asset dealings. A number of rival multibillion-dollar firms have instead turned to traditional finance talent with some element of crypto experience to build out their operations in the space.

A spokesperson for Cohen, who runs Point72 Asset Management and has backed crypto startups via his family office and the multi-strategy hedge fund firm’s venture capital arm, declined to comment.

“It’s Web3, and [Cohen’s] obviously connected in the space and knows his stuff,” one source said. “Honestly, hiring TradFi [traditional finance] guys that think they know crypto is probably the dumb way to go.”

“Acidphreak” dabbled in venture capital before working for Cohen

The Masters of Deception, dubbed “The Gang That Ruled Cyberspace” in a 1995 biography, developed innovative techniques to breach private networks of major corporations, eventually getting entangled with authorities, including the FBI.

Ladopoulos has since served as a prized white-hat hacker — former bad actors hired by corporations and blockchain startups to probe for vulnerabilities in their code — and acted as a consultant for a number of high-profile businesses and even governments.

He “remains a leader and mentor to a younger generation of hackers today,” Ladopoulos wrote on his LinkedIn, where a descriptor for his stint as “Acidphreak” says, “Too much to explain here, Google it…”

A longtime quant and blockchain aficionado, Ladopoulos has already invested in venture capital plays via firms such as Raptor Group. He also has extensive experience with artificial intelligence, including machine learning techniques.

At On-Chain, Cohen has tasked him with backing promising crypto startups and building out the firm’s quant digital asset spot and derivative trading strategies, Blockworks has learned. It’s a time-consuming and pricey process — especially given the rapid rate of alpha decay in the sector as crypto markets have quickly become more efficient.

On-Chain, which is still in its early stages, is an entirely separate entity from Point72, Point72 Ventures and Cohen’s personal family office, which itself commands billions of dollars. There are no plans to accept outside capital from the jump, but sources dubbed the initiative as allowing Cohen to build out a platform and snap up talent, which has become more abundant during the crypto bear market.

On-Chain exploring DeFi yield ahead of the Merge

Conservative sovereign wealth firms wary of digital assets, coupled with regulatory concerns — particularly uncertainty between the role of the SEC and the Commodity Futures Trading Commission in the US — has rendered multi-strategy operators hesitant to include cryptocurrency, or even related derivatives, under their flagship hedge fund umbrellas.

In addition to venture and spot investments, On-Chain is planning to put capital to work in decentralized finance (DeFi) yield farming opportunities, as well as staking plays, leading up to Ethereum’s highly anticipated Merge to proof-of-stake, sources told Blockworks.

Staffers at the entity have also been engaging in preliminary due diligence conversations with outside crypto-focused hedge and venture portfolio managers. That could involve potential seed deals and give On-Chain a chance to vet alternative investment strategies and potentially bring new traders in-house.

Cohen has also been backing outside managers via his family offices, in addition to the firm’s focus on direct venture investments. He’s notched a number of notable hits — and a miss (or two) — including recently pulling out of proprietary digital asset trader Radkl.

Point72, for its part, has been working on setting up its own internal blockchain-focused team. Traders there have already been investing in crypto derivatives and institutional trust products, including Grayscale Investments’ bitcoin and ether vehicles, GBTC and ETHE.

The firm had $26.1 billion in assets under management as of July 1.

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