Silicon Valley’s Andreessen Horowitz to Launch Cryptocurrency Investment Fund

Legendary venture capital firm Andreessen Horowitz is preparing to launch a new fund that will invest exclusively in cryptocurrencies and other related endeavors.

Tech news outlet Recode reports that the prominent Silicon Valley firm is hiring staff for a “separately managed fund focusing on crypto assets,” which will be the VC’s first dedicated solely to this nascent industry.

That said, Andreessen is no stranger to cryptoasset investing. The firm has invested in cryptocurrency unicorns Coinbase and Ripple, as well as smaller ventures such as CryptoKitties, one of the most popular Ethereum-based decentralized applications (DApps). Andreessen has also provided backing to Polychain Capital, one of the larger cryptocurrency hedge funds.

Little else is known about the new fund, including how large it will be and whether “crypto assets” refers to cryptocurrencies and tokens exclusively or also includes cryptocurrency companies.

Notably, one of the positions for which Andreessen is hiring is a lawyer, who will be responsible for navigating the murky regulatory environment around cryptoassets. In particular, he or she will determine whether prospective investments are compliant with Securities and Exchange Commission (SEC) regulations.

In March, representatives from Andreessen Horowitz attended a meeting with SEC officials along with fellow members of an industry working group. Sources familiar with the meeting — which was also attended by representatives from Union Square Ventures — said that the working group pressed the SEC to provide formal guidance that ethereum and a number of initial coin offering (ICO) tokens are not securities under federal law, but the agency was hesitant to grant this broad exemption.

The other new hire, a finance manager, will assist the firm in collecting investments from its limited partners. He or she will also face the difficult challenge of assigning valuations to prospective cryptoasset investments — a tall order given the novelty of the space.

Andreessen has not yet announced the new fund publicly.

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David Murray

David has been following the development of cryptocurrency technology for several years, and he is optimistic about its potential to democratize the financial system.

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