- Cohen’s new crypto-focused venture, which is still in its infancy, is dubbed On-Chain Investments.
- The venture builds on his widespread venture capital style, having personally backed crypto startups through his family office and Point72 Ventures
Steve Cohen has hired self-proclaimed cyberpunk and reformed hacker “Acidphreak” as his first – and so far only – portfolio manager to lead investments for his new crypto-only money manager.
Elias Ladopoulos, better known as “Acidphreak” from his days leading New York-based hacking collective Masters of Deception, 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 deals, called the hiring “somewhat surprising” for Cohen and noted that Ladopoulos had relatively few Wall Street connections.
It suggests that Cohen, a hedge fund billionaire, is serious about prioritizing crypto natives when occupying on-chain — a departure from most digital asset transactions on Wall Street. A number of competing multi-billion dollar companies have turned to more traditional finance talent with some crypto experience element to grow their businesses in this space.
A spokesman for Cohen, who runs Point72 Asset Management and has been a strong backer of crypto startups through 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 to the space and knowledgeable,” said a source. “Honestly, discontinue TradFi [traditional finance] People who think they know crypto is probably the stupid way.”
“Acidphreak” tried his hand at venture capital before working for Cohen
Dubbed “The Gang That Ruled Cyberspace” in a 1995 biography, the Masters of Deception developed innovative techniques to penetrate the private networks of large corporations and eventually entangle themselves with authorities, including the FBI.
Ladopoulos has since served as a esteemed white-hat hacker — former bad actors hired by corporations and blockchain startups to look for vulnerabilities in their code — and as a consultant to a number of high-profile corporations 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 time as an “acidphreak” reads, “Too much to explain here, Google it…”
A longtime fan of quant and blockchain, Ladopoulos has previously invested in venture capital through firms such as Raptor Group. He also has extensive experience in artificial intelligence, including machine learning techniques.
At On-Chain, Cohen has tasked him with supporting promising crypto startups and expanding the firm’s strategies for quantitative trading in digital assets and derivatives, Blockworks has learned. It’s a time-consuming and costly process — especially given the rapid rate of alpha decay in the industry as crypto markets have rapidly become more efficient.
On-Chain, which is still in its infancy, is an entirely separate entity from Point72, Point72 Ventures, and Cohen’s personal family office, which has billions of dollars of its own. There are no plans to accept outside capital from the jump, but sources said the initiative allowed Cohen to build a platform and snag talent that has become more plentiful during the crypto bear market.
On-Chain Explores Pre-Merger DeFi Yield
Conservative state-owned 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 — have led multi-strategy operators to hesitate to invest in cryptocurrencies or even cryptocurrencies to include related derivatives in their list of flagship hedge fund umbrellas.
In addition to venture and spot investments, On-Chain plans to allocate capital to DeFi yield farming opportunities as well as staking games, leading to Ethereum’s much-anticipated merge to proof-of-stake, sources told Blockworks.
Company employees have also conducted preliminary due diligence discussions with outside crypto-focused hedge and venture portfolio managers. That could include potential seed deals and give on-chain an opportunity to explore alternative investment strategies and potentially bring in new traders.
In addition to the firm’s focus on direct venture investing, Cohen also supports external managers through his family offices. It’s had a string of notable successes — and a failure (or two) — including its recent exit from proprietary digital asset retailer Radkl.
For its part, Point72 has been working to build its own in-house blockchain-focused team. Traders there have already invested in crypto derivatives and institutional trust products, including Grayscale Investments’ bitcoin and ether vehicles, GBTC and ETHE.
The company had $26.1 billion in assets under management as of July 1.
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