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In a new Twitter post dated Dec. 12, Du Jun, co-founder of cryptocurrency exchange Huobi Global, shared new insight on his experience of running 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 in March, and by April, it was already registered in Singapore. However, amidst the $40 billion Terra Luna implosion in May, Jun said that “old money has all but fled” after the incident.

Undeterred, Jun continued that in August, the VC fund was fully operational, with “a few partners pooling tens of millions of dollars to invest.” While an initial report early November revealed “very good” results, Jun said that the subsequent collapse of FTX was “far beyond expectations” for the industry:

“Layoffs, salary cuts, and contraction became main themes for crypto companies. One thought the feud between FTX and Binance would encourage healthy industry development, but it turned out FTX was so weak that it just straight-up surrendered, bringing a wave of catastrophe. Today Binance has over 75% market share, and whether he likes it or not, CZ’s [Binance CEO Changpeng Zhao] attitude towards regulation represents that of the entire industry, and it’s a huge challenge for CZ.”

With regard to decentralized finance, or DeFi, Jun attributed last summer’s boom to quantitative easing (QE) measures of the U.S. Federal Reserve. Tying it to regulation, Jun said that DeFi growth took place largely due to companies such as Coinbase, Circle, Grayscale, and Paxos “actively embraced regulation” and allowed large institutional investors to enter the space against the backdrop of QE.

“FTX’s implosion made traditional old money and government agencies afraid, or even disgusted, by the chaotic and orderless realm of crypto. For a long time thereafter, governments would not support relaxed policies that support development and innovation in crypto, nor would sovereign wealth funds invest in the market.”

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