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

Steve Cohen has hired self-styled cyberpunk and reformed hacker “Acidphreak” as the first – and so far only – portfolio manager to lead investments for his new crypto-only asset manager.

Elias Ladopoulos, better known as “Acidphreak” from his time as leader of the 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 spoke on condition of anonymity to discuss sensitive business connections, categorized the hiring as “somewhat surprising” to Cohen, noting Ladopoulos’ relative lack of Wall Street ties.

It indicates that Cohen, a hedge fund billionaire, is taking prioritizing crypto-natives to staff On-Chain seriously – a departure from most of Wall Street’s digital asset trading. Rather, a number of rival multibillion-dollar firms have 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 heavily backed crypto startups via his family office and the multi-strategy hedge fund’s venture capital arm, declined to comment.

“It’s Web3, and [Cohen’s] obviously connected to the room and knows his stuff,” a source said. “Honestly, hiring TradFi [traditional finance] guys who think they know that crypto is probably the dumb way to go.”

‘Acidphreak’ worked in venture capital before working for Cohen

The Masters of Deception, called “The Gang That Ruled Cyberspace” in a 1995 biography, developed innovative techniques to breach the private networks of large corporations, eventually entangling themselves with authorities, including the FBI.

Ladopoulos has since served as a prized white-hat hacker — former bad actors hired by companies and blockchain startups to probe vulnerabilities in their code — and served as a consultant to a number of high-profile businesses and even governments.

He “remains a leader and mentor to a younger generation of hackers today,” Ladopoulos wrote on his LinkedIn, where a description of his efforts as “Acidphreak” reads: “Too much to explain here, Google it…”

A long-time quant and blockchain aficionado, Ladopoulos has already invested in venture capital games via firms like the 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 building out the firm’s quant digital asset spot and derivatives trading strategies, Blockworks has learned. It’s a time-consuming and expensive process – especially given the rapid rate of alpha decay in the sector as crypto markets have rapidly become more efficient.

On-Chain, which is still in its early stages, is a completely separate entity from Point72, Point72 Ventures and Cohen’s personal family office, which itself has billions of dollars. There are no plans to accept outside capital from the jump, but sources called the initiative to allow Cohen to build out a platform and bring in talent, which has become more abundant during the crypto bear market.

On-Chain explores DeFi dividends before the merger

Conservative sovereign wealth firms wary of digital assets, combined with regulatory concerns – particularly uncertainty between the role of the SEC and the Commodity Futures Trading Commission in the US – have made 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 plans to put capital to work in DeFi return breeding opportunities, as well as staking, leading up to Ethereum’s long-awaited proof-of-stake merger, sources told Blockworks.

Employees of the unit have also participated in preliminary due diligence discussions with external crypto-focused hedge and venture portfolio managers. It could involve potential seed deals and give On-Chain a chance to consider alternative investment strategies and potentially look to bring new dealers in-house.

Cohen has also supported outside managers via his family offices, in addition to the firm’s focus on direct venture investments. He has had a number of notable hits – and a miss (or two) – including recently pulling out of proprietary digital asset trader Radkl.

Point72, for its part, has been working on setting up its own internal 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 firm had $26.1 billion under management as of July 1.

Get today’s best crypto news and insights delivered to your inbox every night. Subscribe to Blockworks’ free newsletter now.