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- Despite the scenario, many crypto and Web3 projects based in the U.S. received considerable funding.
- The U.S. authorities are waging war on the crypto industry.
The U.S. is constantly raiding the crypto battlefield, creating a situation of uncertainty in the industry. Many crypto entities have hinted at moving from the country to more favorable locations. Venture Capitalists invest heavily in crypto and Web3 projects despite the hostile U.S. crypto environment.
There have been multiple attacks on the crypto industry by the U.S. authorities, particularly the Securities and Exchange Commission is barraging the industry with numerous lawsuits. The infamous case of Ripple vs. SEC has been going on since December 2020, where the industry is trying to prove XRP is a security. Recently they issued a Wells Notice to crypto exchange Coinbase regarding the sale of unregistered securities.
Venture Capitalists Love Crypto
VCs tend to avoid a slow bear market, especially during uncertainty in regulations. But since the start of 2023, multiple crypto and Web3 projects have received venture capital. This deviation hints that they are not bothered by the current U.S. crypto scenario.
There has been some considerably huge investment in crypto and the Web3 sector, as highlighted by a Defi investor on April 18, 2023.
Due to a harsh crypto winter last year and significant collapses, the industry’s most prominent VC firms also collapsed. Three Arrows Capital and Alameda Research were among the big names in this sector. However, analysts argue that “crisis means opportunity.”
LayerZero managed to raise around $120 Million in 2023 from a16z and Sequoia Capital. This protocol works to create cross-chain dApps, which are interoperable across all significant chains. After raising around $135 Million in Series A funding in March 2022, the current valuation of the protocol is about $3 Billion.
Scroll ZKP, with a valuation of around $1.8 Billion, secured funding of $50 Million, with inventors including Sequoia and Polychain Capital. The project works on developing smart contracts at Ethereum Virtual Machine (EVM).
Eigenlayer, an Ethereum re-staking platform, also raised $50 Million in a funding round led by Blockchain Capital. This protocol enables ETH re-staking to other networks to boost their security and crypto-economics.
AI-focused crypto protocol Fetch.ai managed to get funding of $40 Million from an investment firm, DWF Labs. The platform aims to use Artificial Intelligence to automate tasks like executing transactions.
Other crypto and Web3 projects which garnered VC interest and got fundings are Plai Labs, a social platform with $32 Million. Sei Network, an optimized trading platform, secured $30 Million.
Hostile Crypto Environment Pushing Crypto away from the U.S.
Due to regulatory pressure and the surrounding environment, many crypto companies are trying to shift from the U.S. while many are looking towards Asia for better opportunities. The funding scenario hints towards the same: many multi-billion dollar fundings have been invested in Asian Web3 and crypto startups. Bitget Web3 Fund announced a fund of $100 Million earlier this month.
Bitget says the Asia-focused fund aims to “foster a positive attitude towards the digital currencies economy and support the development of the Web3 environment.” Similarly, in late March 2023, Hong Kong’s investment firm ProDigital Future announced investing $100 Million in Web3 and crypto startups of the region.
Hong Kong is supposed to roll out its crypto framework in June 2023; if it works as expected, the Fragrant Harbor could become a hub for VC investments. Big money from mainland China is also supposed to enter the sector via legal avenues.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
