Representations of Bitcoin and other cryptocurrencies on a screen showing binary codes are seen through a magnifying glass in this illustration picture taken (Photo : REUTERS/Florence Lo/Illustration)
Ken Griffin, founder of Citadel Securities, one of the world's biggest market-making firms, said the company does not trade cryptocurrencies due to regulatory uncertainties around them.
Some market makers - firms that provide market liquidity by streaming buy and sell quotes for others to trade against - such as Jump Trading and DRW, have embraced the nascent asset class, but Griffin said Citadel Securities has not.
"I just don't want to take on the regulatory risk in this regulatory void that some of my contemporaries are willing to take on," he told the Economic Club of Chicago.
U.S. Securities and Exchange Commission Chair Gary Gensler told a Senate hearing last month that his agency was examining several aspects of cryptocurrencies, including the offer and sale of crypto tokens, crypto trading and lending platforms, and the custody of crypto assets.
"Chairperson Gensler is spot on on the need to have thoughtful regulation around cryptocurrency," Griffin said.
"I actually think that doing so will make it a smaller market because it will become a far more competitive market when there is regulatory clarity and that will be good," he said.
Regulators globally have voiced concerns that the rise in privately operated currencies could undermine their control of their financial and monetary systems, increase systemic risks and hurt investors.
Griffin said Citadel would trade cryptocurrencies if they were regulated, regardless of what he thinks of them personally.
"Let's face it, it's a jihadist call that we don't believe in the dollar," he said.
