Michael Bodley

<div id="highlights-block_62ffd497c649d" class="highlights">
 <ul>
 <li>Cohen&#8217;s new crypto-focused entity, which is still in its early innings, is dubbed &#8220;On-Chain Investments&#8221;</li>
 <li>The endeavor builds on his widespread venture capital-style, having backed crypto startups personally via his family office and Point72 Ventures</li>
 </ul>
 
</div>



Steve Cohen has hired self-styled cyberpunk and reformed hacker &#8220;Acidphreak&#8221; as the first — and, so far, only — portfolio manager to lead investments for his <a href="https://cms.blockworks.co/steve-cohen-building-out-crypto-investment-firm/" target="_blank" rel="noreferrer noopener">new crypto-only asset manager</a>.



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.&nbsp;



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.”&nbsp;



<h3 class="wp-block-heading">&#8220;Acidphreak&#8221; dabbled in venture capital before working for Cohen</h3>



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.&nbsp;



He “remains a leader and mentor to a younger generation of hackers today,” Ladopoulos wrote on his <a href="https://www.linkedin.com/in/eliasnyc/details/experience/" target="_blank" rel="noreferrer noopener">LinkedIn</a>, 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.&nbsp;



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.&nbsp;



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 <a href="https://cms.blockworks.co/crypto-prices-collapse-across-the-board-dragged-by-bitcoin-and-ether/" target="_blank" rel="noreferrer noopener">crypto bear market</a>.&nbsp;



<h3 class="wp-block-heading">On-Chain exploring DeFi yield ahead of the Merge</h3>



Conservative sovereign wealth firms wary of digital assets, coupled with regulatory concerns — particularly <a href="https://cms.blockworks.co/new-cftc-bill-could-overrule-sec-but-leaves-fate-of-many-crypto-tokens-unresolved/" target="_blank" rel="noreferrer noopener">uncertainty</a> 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) <a href="https://cms.blockworks.co/what-is-yield-farming-what-you-need-to-know/" target="_blank" rel="noreferrer noopener">yield farming</a> opportunities, as well as staking plays, leading up to Ethereum’s highly anticipated <a href="https://cms.blockworks.co/the-investors-guide-to-the-ethereum-merge/" target="_blank" rel="noreferrer noopener">Merge</a> 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 <a href="https://cms.blockworks.co/billionaire-steve-cohen-ditches-crypto-startup-radkl-report/" target="_blank" rel="noreferrer noopener">pulling out of</a> proprietary digital asset trader Radkl.



Point72, for its part, has been working on <a href="https://cms.blockworks.co/point72-asset-management-in-early-innings-of-big-crypto-push/" target="_blank" rel="noreferrer noopener">setting up its own</a> 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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acidphreak

Steve Cohen Taps Hacker ‘Acidphreak’ as First Trader for Crypto Startup 

<div id="highlights-block_62f57ecfa84b2" class="highlights">
 <ul>
 <li>The move builds upon Point72 Asset Management’s forays into crypto derivatives </li>
 <li>The endeavor would require substantial resources in terms of employees and operational expenditures</li>
 </ul>
 
</div>



Hedge fund billionaire Steve Cohen is laying the groundwork for an investment firm focused exclusively on cryptocurrency, according to four sources familiar with the matter.



Though the new entity is in its early innings, sources said the business plans to trade spot cryptocurrencies — a segment Cohen’s multi-strategy hedge fund firm, Point72 Asset Management, has yet to touch. It would also trade digital asset derivatives, as well as look to write checks to outside digital asset-focused hedge fund managers, including possible seed deals.&nbsp;



The name of the startup — which is set up separately from Point72, Point72 Ventures and Cohen’s family office — isn’t known. But Cohen himself has played a key role in its formation, which would require substantial expenditures when it comes to staffing, not including pricey trading infrastructure and operational needs.



It’s the latest indication that Cohen, who has snapped up stakes in crypto startups he deems promising, is becoming more bullish still on digital assets. A growing number of deep-pocketed traditional financiers are weighing deploying big-time capital in the space, cognizant of bottom-basement prices as markets continue to roil following the <a href="https://cms.blockworks.co/tag/Terra" target="_blank" rel="noreferrer noopener">collapse</a> of Terra stablecoin UST and the demise of crypto lenders including <a href="https://cms.blockworks.co/tag/celsius" target="_blank" rel="noreferrer noopener">Celsius</a> and <a href="https://cms.blockworks.co/tag/voyager" target="_blank" rel="noreferrer noopener">Voyager</a>.



A spokesperson for Cohen and his asset management firms declined to comment. Sources were granted anonymity to discuss sensitive business dealings.



In addition to trading more vanilla spot cryptoassets, the new firm would likely dabble in decentralized finance projects, including <a href="https://cms.blockworks.co/what-is-yield-farming-what-you-need-to-know/#:~:text=Yield%20farming%20is%20the%20process,can%20employ%20more%20complex%20tactics." target="_blank" rel="noreferrer noopener">yield farming,</a> one source said. The up-and-coming business line would also look to engage in staking, an area drawn into the spotlight leading up to Ethereum’s pending transition from <a href="https://cms.blockworks.co/proof-of-work-vs-proof-of-stake-whats-the-difference/" target="_blank" rel="noreferrer noopener">proof-of-work to proof-of-stake</a>.



Though it’s thought that the startup has no immediate plans to accept outside capital, the endeavor is a mechanism for Cohen to start laying the foundation for a future broad-based crypto trading platform. Even during the bear market, competition for top-tier talent has intensified as Point72 multi-strategy hedge fund rivals, such as Millennium Management, have increasingly devoted resources to the sector.&nbsp;



Even Citadel’s Ken Griffin, long a skeptic who last fall dubbed cryptocurrency a “<a href="https://www.bloomberg.com/news/articles/2021-10-04/griffin-sees-crypto-mania-as-jihadist-call-against-the-dollar" target="_blank" rel="noreferrer noopener">jihadist call</a>” against the US dollar, has reversed course, acknowleding digital assets are here to stay.



That said, the space is ripe with regulatory concerns, as well as conservative sovereign wealth fund limited partners that have urged caution about crypto. Both points are rationale for multi-billion hedge fund firms, for the most part, to refrain from trading spot crypto products via their flagship vehicles, sources said.&nbsp;



“They’re still working through the details, but the plan was to not put all the bread in the flagship fund,” one source said. “They clearly have a lot of learning to do about the space. [Probably] are not ready to make that call just yet.”



The <a href="https://cms.blockworks.co/sec-orders-crypto-startup-to-register-ico-tokens-or-face-31m-fine/" target="_blank" rel="noreferrer noopener">regulatory uncertainty</a> between the SEC and the Commodity Futures Trading Commission (CFTC), in terms of whether the likes of bitcoin and ether are securities or commodities, has heightened tensions.



“The regulatory stuff is something they’re concerned about, as well,” one source said. “They’re worried about how they actually touch this asset class.”



Backing outside traders would be another way to pick up intelligence on viable — and, crucially for the asset manager, scalable — strategies, without the complications that would come with directly investing in digital assets internally.&nbsp;



It’s altogether a <a href="https://www.theblock.co/post/104522/steve-cohen-point72-crypto-market" target="_blank" rel="noreferrer noopener">natural extension</a> of Cohen’s angel investments into blockchain companies. Not all have panned out, including <a href="https://cms.blockworks.co/billionaire-steve-cohen-ditches-crypto-startup-radkl-report/" target="_blank" rel="noreferrer noopener">ditching his stake</a> in proprietary digital asset trader Radkl, but Cohen still enjoys preferred access to dealflow, by traditional finance standards.



“[It’s probably] what all these other guys are doing,” one source said. “The firms are not in crypto, so they tell investors, but the founders are.” Point72 has $26.1 billion in assets under management. The firm is looking to hire a host of candidates for its own <a href="https://cms.blockworks.co/point72-asset-management-in-early-innings-of-big-crypto-push/" target="_blank" rel="noreferrer noopener">developing internal crypto operations</a>.



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hedge fund

Steve Cohen Quietly Setting Up Crypto-only Asset Manager

Shalini Nagarajan

<div id="highlights-block_62e8f31ae75d4" class="highlights">
 <ul>
 <li>Cohen backed Radkl in a personal capacity, not via Point72</li>
 <li>The proprietary crypto trading firm launched in September last year by partners at GTS</li>
 </ul>
 
</div>



Billionaire hedge fund manager Steve Cohen is no longer an investor in crypto startup Radkl, <a href="https://www.bloomberg.com/news/articles/2022-08-01/billionaire-steve-cohen-exits-investment-in-crypto-startup-radkl?utm_campaign=socialflow-organic&amp;utm_content=business&amp;utm_source=twitter&amp;cmpid=socialflow-twitter-business&amp;utm_medium=social">Bloomberg reported</a> on Tuesday.



Cohen <a href="https://www.wsj.com/articles/steven-cohen-to-invest-in-crypto-quant-trading-firm-11631611803">reportedly</a> provided financial backing to Radkl in a personal capacity, not through his hedge fund and the size of his investment is not known.&nbsp;A source familiar with the matter confirmed his exit.



The chairman and CEO of Point72 Asset Management made plans to enter the crypto market in 2021 at a time when high-profile investors and institutions were warming up to digital assets.&nbsp;



The barely year-old proprietary crypto trading firm, launched by partners at Wall Street market maker GTS, is said to deploy sophisticated, high-speed, computerized trading models to invest in cryptoassets.&nbsp;



Pronounced “radical,” the startup has lost at least two managing directors already this year, including <a href="https://www.linkedin.com/in/jimgreco/">Jim Greco</a> and <a href="https://www.linkedin.com/in/beatriceocarroll/">Beatrice O’Carroll</a>, their LinkedIn profiles show. O&#8217;Carroll was still listed on Radkl&#8217;s website, however, alongside four others. The team <a href="https://radkl.io/team">page</a> has since been deleted. <a href="https://www.linkedin.com/search/results/people/?currentCompany=%5B%2275650000%22%5D&amp;origin=COMPANY_PAGE_CANNED_SEARCH&amp;sid=dyD">LinkedIn</a> shows the startup has 18 employees.



Radkl told Bloomberg it remains “extremely well capitalized” with its current investors. However, <a href="https://www.crunchbase.com/organization/radkl/company_financials">data on Crunchbase</a> shows Cohen was its only investor.



The billionaire’s hedge fund had made several crypto-related bets including crypto analytics firm Messari, infrastructure platform Zero Hash and around-the-clock trading platform 24Exchange.



He has decades of experience on Wall Street and founded two hedge funds. Of those, SAC Capital was ordered to shut down after it <a href="https://twitter.com/SDNYnews/status/397380537397948416?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E397380537397948416%7Ctwgr%5Ec7b6ae79570ab18f7ed46dd33d5e16b10ba66dc3%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwww.buzzfeednews.com%2Farticle%2Fmatthewzeitlin%2Fsac-capital-to-plead-guilty-and-shut-down-advisory-business">plead guilty</a> to engaging in insider trading. Cohen told <a href="https://stray-reflections.com/publicevent/30/Inner_Game_with_Steven_Cohen">Stray Reflections</a> in an interview last year that he was “fully converted” to crypto.



Blockworks learned last month that Point72 was <a href="https://cms.blockworks.co/point72-asset-management-in-early-innings-of-big-crypto-push/">looking to hire</a> a couple of senior blockchain-focused professionals, including a head of crypto technology and head of digital asset operations.



A spokesperson for Cohen declined to comment, while Radkl didn’t return Blockworks’ request for comment by press time.



This article was updated on August 3 at 3:15 am ET.



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Steve Cohen

Billionaire Steve Cohen Ditches Crypto Startup Radkl

<div id="highlights-block_62c8867d27a8a" class="highlights">
 <ul>
 <li>The firm, like rival Millennium Management, had already been trading crypto-based institutional products</li>
 <li>The focus on actively traded spot crypto strategies comes on the heels of Cohen’s personal venture capital-style investments in blockchain technology companies</li>
 </ul>
 
</div>



The staffing of Point72 Asset Management’s burgeoning cryptocurrency operations is starting to take shape as the multi-strategy hedge fund firm deepens its push into digital assets, according to two sources familiar with the matter.



The firm — which is run by founder Steve Cohen and trades a wide variety of traditional financial assets, including equities, commodities and debt — is looking to hire a couple of senior blockchain-focused professionals, including a head of crypto technology who would report to the Mark Brubaker, the firm’s chief technology officer.&nbsp;



Brubaker, sources said, has been conducting interviews with potential candidates in recent weeks, with some introductions coming by the way of a third-party recruiting outfit focused on crypto.



The second role would be more of a head of digital asset operations, which would encompass coordinating efforts between middle- and back-office teams that support portfolio managers and analysts. Additional junior and mid-level hires are in the works.



The plan for Point72’s crypto dealings — which ought to build upon Cohen’s relatively early venture capital-style investments in the space via his family office and the firm’s venture arm — is to start with quantitative trades and build out a business model from there.



“There are high-level, serious people [at Point72] that are getting in on crypto now,” one source said. “They’re finally taking it seriously. It’s early, but this looks like the early innings of a big push. And it’s finally clear that Steve [Cohen] has signed off on it.”



Prominent hedge funds have by and large stayed on the crypto sidelines. Before the recent market crash, top financiers were worried about regulation; they’re now also worried about whether digital assets will continue to free-fall in what’s been a tough time to enter quickly gyrating markets.&nbsp;



There’s also the not-insignificant matter of sizable institutional limited partners, especially conservative-leaning sovereign wealth funds, wary of the firm and others they invest with pushing into crypto too fast — especially when it’s unclear, arguably, whether digital assets have a large enough market cap to justify the big tickets Point72 and its rivals need to generate meaningful alpha from those trades.&nbsp;



To kick things off, the firm last month installed Jump Trading veteran Elie Galam as head of crypto for the quant division, Cubist Systematic Strategies, <a href="https://news.bloombergtax.com/crypto/point72-hires-quant-crypto-chief-to-boost-digital-asset-trading" target="_blank" rel="noreferrer noopener">Bloomberg reported</a>. Galam and at least two supporting portfolio managers have been tasked with doing due diligence on trading fairly liquid, high-market-cap spot cryptocurrencies — plus related derivatives.



The firm had already been trading digital asset-backed ETFs and similar institutional products, including Grayscale Investments’ Ethereum Trust (ETHE) and Bitcoin Trust (GBTC). The Cubist unit is also trading certain crypto derivatives already.&nbsp;



The firm is not, however, trading spot digital assets.&nbsp;



Cubist more broadly, meanwhile, is undergoing a bit of an overhaul. The unit is adding a centralized quant platform — which Galam will be a part of. Here’s how it works: Each trader contributes algorithms, or supporting article intelligence or machine learning applications, to a master quantitative strategy. It’s a setup favored by the likes of DE Shaw and Renaissance Technologies. 



The division will continue its traditional practice, too, of divvying up &#8220;pods&#8221; of portfolio managers and supporting analysts who hone their own independent strategies that feed into the firm’s flagship fund.



Sources were granted anonymity to discuss sensitive business dealings. A spokesperson for Point72 declined to comment.



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