Blockchain-focused venture capital firm CoinFund, which has invested in the likes of non-fungible token (NFT) gaming giant Dapper Labs and NFT marketplace Rarible, has spent the past year building its team to help portfolio companies navigate the complex regulatory landscape in the U.S.
Last month, CoinFund tapped former Commodity Futures Trading Commission (CFTC) Chairman J. Christopher Giancarlo as a strategic advisor on Web 3 regulation. Giancarlo, affectionately called “Crypto Dad” by many in the industry for his pro-crypto stance, has plenty of experience operating at the intersection of regulation and technology.
Giancarlo was welcomed aboard by CoinFund Managing Partner and President Christopher Perkins, who joined the firm last summer from Citigroup, where he co-led the futures, clearing and foreign-exchange brokerage businesses.
In an interview with CoinDesk, Perkins said he joined the company with a “sell-side perspective of building regulated businesses.” His role involves helping portfolio companies navigate the regulatory environment and working with regulators and policymakers on “thoughtful policy design.”
“We want to give our entrepreneurs and founders sufficient safe harbor to innovate, to grow, to test, to take risks. And we want to do that in a safe fashion,” said Perkins, who added that he helps companies figure out “what regulatory Legos need to come together” to operate or partner in the United States.
Crypto’s complicated regulatory environment is an often-cited reason why institutions are slow to leap into the industry.
“Adoption is slow but it’s coming,” Perkins said. The problem isn’t a lack of interest, according to Perkins, but rather the operational complexities of entering the crypto space. To assess a move into crypto, institutions often form task forces, which take time to do research and make their recommendations.
On the regulation front, Perkins said that from a macro perspective, the U.S. leads global crypto policy. He has seen increasing bipartisan support for blockchain technology with notable proponents including Sen. Ted Cruz (R-Texas), Democratic New York City Mayor Eric Adams and Republican Miami Mayor Francis Suarez.
“You’re seeing this very unique circumstance where the left and the right are starting to align. So we have an eye on the midterm elections, especially,” said Perkins, expecting to see more politicians supporting blockchain technology.
“Pretty much everyone I speak to is very favorable of regulation,” said Perkins. “We want a principles-based regulation that’s predicated on things like investor protections."
"We want to make sure there’s not fraud, manipulation and abuse," he added, noting he believes the CFTC is well positioned to police these areas.
CoinFund closed its $83 million Ventures fund in early 2021, marking the Brooklyn, New York-based firm’s largest pool to date. Institutional investors (pensions, endowments and family offices) contributed more than half of the funding.
Perkins told CoinDesk the firm will continue to invest in its existing seed, venture and liquid strategies without specifying plans for future funds.
Investment focuses for the firm include gaming, infrastructure, decentralized autonomous organizations (DAOs), non-fungible tokens (NFTs), decentralized finance (DeFi) and all the points where those verticals intersect, said Perkins.
Perkins sees NFTs as the gateway to user adoption of Web 3 as celebrities pour into the space, as well as with NFTs “starting to play a major part of popular culture.”
“There’s a degree of interconnectedness, where you’re starting to see games emerge where you can play with your NFT. You can financialize, trade and lend your NFT. And all of that requires infrastructure,” said Perkins. “At the end of the day, what is crypto? Crypto is nothing more than community.”
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