Paradigm, a prominent figure in the realm of crypto venture capital, is gearing up for a substantial fundraising endeavor with ambitious targets for its latest investment fund.
As per insights shared in a recent Bloomberg report, individuals familiar with the matter have disclosed that Paradigm is setting its sights on raising between $750 million to $850 million. Should the final figure settle at $750 million, this fund would stand out as one of the most significant in the industry since 2022, trailing only behind Andreessen Horowitz’s colossal $4.5 billion crypto fund established in May of that year.
The brainchild of Coinbase co-founder Fred Ehrsam and former partner at Sequoia Capital, Matt Huang, Paradigm operates as a “research-driven technology investment firm,” with a portfolio that boasts notable names like Uniswap, FTX, Cosmos, and Axie Infinity, among others.
Notably, Paradigm made waves in 2021 when it secured a $2.5 billion fund, which at the time stood as the largest crypto investment fund in existence. Earlier reports from The Information in September had hinted at Paradigm’s intention to target a $1 billion fund raise, indicating the firm’s ever-growing ambition and appetite for impactful investments in the crypto space.
Paradigm and FTX’s Downfall
During the trial of FTX co-founder Sam Bankman-Fried in October 2023, Huang provided testimony. Bankman-Fried, who has recently been sentenced to 25 years in prison, expressed to ABC News that he never believed his actions were illegal but acknowledged falling short of his own ethical standards.
Paradigm had previously invested $278 million in FTX. However, Huang revealed that Paradigm was unaware of the fraudulent activities that led to FTX’s bankruptcy. Consequently, Paradigm wrote off its entire investment in FTX.
Now, Paradigm finds itself embroiled in a class-action lawsuit initiated by FTX investors. This legal action alleges that Paradigm, alongside Sequoia and Thoma Bravo, unintentionally lent credibility to FTX by providing financial backing, thereby indirectly endorsing its legitimacy.
Backing Coinbase’s Legal Battle Against the SEC
Paradigm, a prominent figure in the crypto investment sphere, has recently thrown its weight behind Coinbase in its legal dispute against the Securities and Exchange Commission (SEC). The move by Paradigm comes as a show of solidarity with Coinbase’s pursuit of clarity and transparency in regulatory frameworks governing digital assets.
In its amicus curiae brief submitted to the court, Paradigm voiced strong criticism against the SEC’s regulatory tactics, characterizing them as overly punitive and lacking in constructive engagement in rulemaking processes. The firm emphasized the daunting challenges faced by entities like Coinbase in navigating compliance within the current regulatory landscape, which heavily relies on enforcement-based measures.
The friction between Coinbase and the SEC dates back to July 2022, when Coinbase sought guidance from the regulatory body regarding the regulatory status of certain digital assets. However, the SEC declined to provide clear guidance, prompting Coinbase to escalate the matter by filing a lawsuit against the regulatory agency. This legal battle underscores the broader industry’s struggle for regulatory clarity and the need for more proactive and constructive regulatory approaches.
read more about: The parent company of Farcaster has reached a valuation exceeding $1 billion following a funding round led by Paradigm.
