The Steve Cohen-backed 24 Exchange has shut down its spot crypto trading service, citing a lack of demand.
The multi-asset class trading platform secured $14million in 2021 in a funding round led by Cohen’s Point72 Ventures on the back of the crypto bull run.
Recent regulatory scrutiny and the implosion of major players such as FTX, Celsius and others have however resulted in a substantial decrease in customer interest and demand for spot crypto services, thereby forcing it to wind down.
Despite the turn of events, 24 Exchange is not quitting the space. Chief executive officer Dmitri Galinov told Bloomberg that it will continue to provide its crypto non-deliverable forward product to clients who wish to mitigate their exposure to digital assets through hedging strategies.
It is also making plans to apply for a 24/7 equities trading licence with the SEC. Galinov revealed that the firm had previously applied but had “run out of time”. The licence, if approved, will enable its clients to trade equities with a minimum increment of one one-thousandth of a share.
Bearish on crypto
Events leading up to the closure of spot crypto trading on 24 Exchange suggests a newfound bearish stance by the hedge fund.
In August 2022, Steve Cohen exited his investment in crypto trading start-up Radkl. A spokesperson for the $24bn hedge fund told Bloomberg following the exit: “Radkl remains extremely well capitalised with its current investors and continues to grow rapidly.”
Cohen and his hedge fund had gained significant recognition for their substantial investments in the cryptocurrency realm before the recent departures. In fact, there were increasing rumours suggesting that Point72 was in the process of establishing a specialised asset management division focused on cryptocurrencies.
A source told Blockworks: “They’re still working through the details, but the plan was to not put all the bread in the flagship fund… They clearly have a lot of learning to do about the space. [Probably] are not ready to make that call just yet.”
Adam Carson, a partner of the investment team, confirmed the firm’s recognition of crypto as a promising new avenue for business growth.
He said last year: “We talked to our existing portfolio of fintech companies and we heard, especially from financial institutions, one thing very clearly, crypto was a big priority….Either their customers were demanding crypto products or they saw it as a new business opportunity.”
At the time of the comment, Point72 had announced its fifth investment in a cryptocurrency company.
