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Paradigm says crypto will be one of the most ‘important technical and economic shifts’ of the coming decades, but the sector has taken some significant hits over the years.
Crypto-focused VC Paradigm has announced its third venture fund to support crypto projects at their earliest stages.
The VC has raised $850m for this latest fund and follows the launch of its $2.5bn fund in 2021. The earlier fund was raised to support the “next generation of crypto companies and protocols”. Reports suggest Paradigm has been working on this new fund for months and had discussions with investors earlier this year.
The crypto-focused VC was founded in 2018 by Matt Huang and Fred Ehrsam. Huang was previously a partner at Sequoia Capital and led its cryptocurrency investments, while Ehrsam was the co-founder of cryptocurrency exchange Coinbase, which went public in 2021.
In a blogpost announcing the fund, Huang said they founded Paradigm with the belief that crypto would be “one of the most important technical and economic shifts of the coming decades”.
“Six years later, that belief has only gotten stronger,” Huang said. “Bitcoin has monetised to $1trn. Ethereum, Solana and other blockchains are scaling. Stablecoins are being adopted globally. Frontier research speeds along. New infrastructure is enabling consumer applications. Hundreds of millions of people own crypto. And crypto is now a main character on the world’s political stage.
“It’s more important than ever to accelerate a positive future for crypto, not just as investors but as builders.”
The crypto market has had an interesting period over the past six years, but not all of it has been positive. Trust in the sector took a hit after FTX collapsed. Its founder, Sam Bankman-Fried, was sentenced to 25 years in prison for stealing from FTX customers earlier this year.
Meanwhile, cryptocurrency exchanges continue to face pressure from US regulators. Earlier this year, Binance founder and former CEO Changpeng Zhao was sentenced to four months in prison in the US for failing to establish adequate anti-money laundering protections.
The decision followed a settlement last November, when Binance agreed to pay more than $4bn to resolve a US investigation.
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