Capital markets and banking incumbents are scrambling to stop the outflows to cryptocurrency firms. Last week, market maker Citadel Securities (Citadel) filed for a restraining order against Vincent Prieur, a former employee who joined Swiss-based startup Portofino.

The new company was founded by former Citadel Securities staff Leonard Lancia and Alex Casimo. Two weeks ago, it announced a $50 million funding from Valar Ventures, Global Founders Capital and Coatue. While Casimo and Lancia left Citadel Securities in March 2021, Prieur departed a year later.

In court documents, Citadel Securities described Portofino as “a key competitor who was deceptively and surreptitiously trained by other former Citadel Securities executives.”

Prieur’s departure in March this year is claimed to have occurred four days after Citadel Securities’ first systematic cryptocurrency trade, which was executed in Asia. However, Prieur resigned in January and was asked to stay on to train his replacement. Citadel claims that Prieur is a key member of the team that developed its crypto strategy, citing an annual performance review in which Prieur said that his main accomplishment was “leading CitSec’s foray into crypto.”

In their opposition response, Prieur’s legal team states that he “had no responsibility whatsoever for any matter related to cryptocurrencies.” He states that his role in cryptocurrency was to “review publicly available information, openly published by public exchanges, regarding the procedural mechanisms for registering to trade cryptocurrencies on those exchanges.” Prieur did not (for example) consider or present any strategy on how Citadel should trade cryptocurrencies, or what clients or methodologies should be considered, or anything of the sort.”

Additionally, Prieur states that his non-competence covers trusting sensitive information or working in a similar capacity as he does at Citadel. He claims that the so-called sensitive information relates to the registry as a crypto exchange, something that was specific to Citadel and that Portofino had already done and already traded in billions before joining. He notes that Citadel Securities is a market maker in fixed income and equities, while Portofino is a market maker in cryptocurrencies.

Prieur’s legal team requested the production of a powerpoint purporting to be his cryptocurrency-related work product, but Citadel refused to do so. Prieur’s side asserts that this is because “the facts show that Prieur did not create or possess any proprietary information that could justify an injunction against him.”

They state that in the summer of 2021, Citadel Securities moved its cryptocurrency initiative from the US to Asia, “where an entirely new and separate designated team in Asia led (and continues to lead) Citadel’s efforts to explore and search for any cryptocurrency. business divisions from then on. Prieur did not move to Asia to remain part of that team, and his involvement (as it was) in Citadel’s ‘crypto trades’ was effectively reduced to 0% of his work time.”

The hearing is set for tomorrow.

Meanwhile, earlier this month, Citadel Securities was revealed as one of the sponsors of a new digital asset exchange, EDX Markets, along with Charles Schwab, Fidelity Digital Assets, Virtu Financial, and others.

Our own experience is that Citadel Securities can be very aggressive. Following an uncontroversial article about the launch of EDX Markets, Ledger Insights was contacted on multiple occasions by two separate companies acting on behalf of Citadel Securities. We made a small change, but we refuse to remove a reference to Citadel Securities starting the consortium, as we believe this to be true. The companies did not claim it was inaccurate, but they nonetheless continued to push for the change, which, in our opinion, was inappropriate.