Incumbents in capital markets and banks are struggling to stem staff outflows to cryptocurrency businesses. Last week, market maker Citadel Securities (Citadel) filed for a restraining order against Vincent Prieur, a former employee who joined Swiss startup Portofino.
The new company was founded by Leonard Lancia and Alex Casimo, former Citadel Securities staffers. Two weeks ago, it announced $50 million in funding from Valar Ventures, Global Founders Capital and Coatue. While Casimo and Lancia left Citadel Securities in March 2021, Prieur left a year later.
In court documents, Citadel Securities described Portofino as “a key competitor who was deceptively and surreptitiously formed by other former Citadel Securities executives.”
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Prieur’s departure in March this year reportedly came four days after Citadel Securities’ first systematic crypto exchange, which was executed in Asia. However, Prieur resigned in January and was asked to stay on to train his replacement. Citadel says Prieur is a key member of the team that developed its crypto strategy, citing an annual performance review in which Prieur said his main accomplishment was “leading CitSec’s foray into crypto.”
In its opposition response, Prieur’s legal team says it “had no liability whatsoever for cryptocurrency-related matters.” He claims his role in cryptocurrency was to “review publicly available information, openly posted by public exchanges, regarding the procedural mechanisms of registration for trading cryptocurrencies on those exchanges. Prieur has (for example) not considered or presented any strategy on how Citadel should trade cryptocurrencies, or what clients or methodologies should be considered, or anything like that.
Additionally, Prieur says his non-competition covers relying on confidential information or working in a position similar to that of Citadel. He claims that the so-called confidential information is about registering as a crypto exchange, something that was specific to Citadel and which Portofino has done before and traded billions before he arrived. He notes that Citadel Securities is a fixed income and equity market maker, while Portofino is a cryptocurrency market maker.
Prieur’s legal team requested the production of a powerpoint purporting to be its crypto-related work product, but Citadel refused to do so. Prieur’s side says that’s because “the facts show that Prieur did not create or possess any proprietary information that could possibly warrant an injunction against him.”
They state that in the summer of 2021, Citadel Securities moved its cryptocurrency initiative from the United States to Asia, “where an entirely new and separate designated team in Asia led (and continues to lead) efforts of Citadel to explore and pursue all cryptocurrency business divisions from this time forward. Prieur did not move to Asia to continue on this team, and his involvement (such as it was) in Citadel’s “crypto operations” was then effectively reduced to 0% of his working time. »
The hearing is set for tomorrow.
Meanwhile, earlier this month, Citadel Securities was disclosed as one of the backers of a new digital asset exchange EDX Markets, alongside Charles Schwab, Fidelity Digital Assets, Virtu Financial and d ‘others.
In our own experience, Citadel Securities can be very aggressive. After a non-controversial article about the launch of EDX Markets, Ledger Insights was contacted several times by two separate companies acting on behalf of Citadel Securities. We have made a small edit, but have declined to remove a reference to Citadel Securities as the originator of the consortium, as we believe this is factually accurate. The companies did not claim it was inaccurate, but nonetheless continued to push for change, which we believe was inappropriate.
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Citadel Securities Sues Ex-Employee For Leaving Crypto Firm – Ledger Insights
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