Paradigm Targets Over $750 Million in Upcoming Fundraising Effort

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Hongji Feng

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Hongji Feng

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Hongji is a crypto and tech reporter. He graduated from Northwestern University's Medill School of Journalism with a Bachelor's and a Master's. He has previously interned at HTX (Huobi Global),...

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April 3, 2024 03:37 EDT

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Paradigm, a key player in crypto venture capital, is eyeing a significant fundraising goal for its latest investment fund.

According to a recent Bloomberg report, people familiar with the matter said that Paradigm has targeted the $750 million to $850 million range. If finalized at $750 million, this fund will represent the industry’s most substantial since 2022, after Andreessen Horowitz’s $4.5 billion crypto fund established in May.

Founded by Coinbase co-founder Fred Ehrsam and Sequoia Capital’s former partner Matt Huang, Paradigm is a “research-driven technology investment firm” backing Uniswap, FTX, Cosmos, Axie Infinity, among other projects.

Paradigm secured a $2.5 billion fund in 2021, which was the largest crypto investment fund at that point. Reports from The Information in September indicated that Paradigm was targeting a $1 billion fund raise.

Paradigm and FTX’s Collapse

In October 2023, Huang provided testimony during the trial of FTX co-founder Sam Bankman-Fried, which has received a 25-year prison sentence.

“I never thought what I was doing was illegal,” Bankman-Fried recently told ABC News. “But I tried to hold myself to a high standard, and I certainly didn’t meet that standard.”

Paradigm had previously allocated $278 million to FTX. Huang disclosed that Paradigm was not aware of the fraudulent activities leading to the exchange’s bankruptcy and subsequently wrote off its investment in FTX entirely.

Paradigm is involved in a class-action lawsuit initiated by FTX investors. The lawsuit accuses Paradigm, along with Sequoia and Thoma Bravo, of inadvertently endorsing FTX’s legitimacy with their financial backing.

Supporting Coinbase’s Lawsuit Against SEC

Paradigm has filed an amicus curiae brief in support of Coinbase’s ongoing legal battle against the Securities and Exchange Commission (SEC), backing for the exchange’s quest for clearer regulations.

In the filed document, Paradigm criticized the SEC’s approach to regulation as overly punitive and resistant to engaging in rulemaking. The firm highlighted the challenges of attempting compliance under the SEC’s current enforcement-based regulatory strategy.

The conflict with the SEC began in July 2022 when Coinbase sought guidance on digital asset regulations, which the SEC subsequently refused, leading to the current lawsuit initiated by Coinbase.