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Huobi co-founder discusses challenges of managing $400m VC fund ‘Old money almost ran away’

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in a new twitter Mail On December 12, Du Jun, co-founder of cryptocurrency exchange Huobi Global, shared a new insight into his experience managing ABCDE Capital, a $400 million Web 3.0 venture capital (VC) fund, in June this year. According to Jun, the idea for ABCDE Capital came up in March, and by April it had already been registered in Singapore. However, amid the $40 billion crash of Terra Luna in May, John said that “the old money almost ran away” after the crash.

Undeterred, John continued that in August, the venture capital fund was fully operational, with “a few partners raising tens of millions of dollars to invest.” While an initial report in early November revealed “very good” results, John said FTX’s subsequent collapse was “far from expectations” for the industry:

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“Layoffs, salary cuts, and downturns have become major topics for crypto companies. One thought that the dispute between FTX and Binance would encourage the healthy development of the industry, but it turned out that FTX was so weak that it directly surrendered, causing a wave of disaster today, owning Binance has more than 75% market share, and like it or not, CZ [Binance CEO Changpeng Zhao] The attitude towards regulation is the attitude of the entire industry, and it is a big challenge for Czechoslovakia.”

Regarding decentralized finance, or DeFi, John attributed last summer’s boom to the US Federal Reserve’s quantitative easing (QE) measures. Linking it to regulation, John said DeFi’s growth has occurred largely because companies like Coinbase, Circle, Grayscale, and Paxos “actively embraced regulation” and allowed large institutional investors to enter the space on the back of quantitative easing.

“The collapse of FTX has made traditional money and government agencies fearful, or even loathing, of the chaotic and unregulated world of crypto. For a long time afterward, neither governments will support relaxed policies that support development and innovation in crypto, nor will sovereign wealth funds invest in the market.”

John also revealed that since ABCDE Capital began investing in August, the company has since accumulated seven companies in its portfolio in the security, data, social, zero-knowledge, and non-perishable token sectors. “ABCDE only invests in 15-20 companies a year; a good company is not afraid of the bear market, referrals are welcome, let’s continue!” co-founder wrote.