The letter,seen by this masthead,tells investors that figure will likely stay at 5 per cent or less for its funds established in 2021,and emphasised that AirTree had no direct exposure to FTX which was once worth $US32 billion ($45 billion).
All six of AirTree’s partners,including industry veteran and AirTree co-founder Craig Blair,pinned the failure of FTX,which grew significantly as users cashed in on the price growth of largely unregulated cryptocurrency assets,on “human misconduct rather than technological failings”.
FTX collapsed in November amid a general downturn in cryptocurrencies andallegations that its founder,Sam Bankman-Fried had loaned customer assets to a floundering crypto hedge fund that he owned called Alameda Research. Bankman-Fried has been charged with fraud over his alleged actions,which he denies,and plead not guilty early this month.Some of his associates have confessed.
The saga led to a prolonged downturn in cryptocurrency prices,increased regulatory scepticism and job cuts at a number of prominent Web3 start-ups globally.
The AirTree letter said most of its Web3 investments would only endure general market volatility fromFTX’s collapse,while two could be marginally more affected.
In February last year AirTree,which is one of the country’s three largest venture capital funds,launched a $50 million fund dedicated to Web3 investments. The firm was never uncritically bullish,but projected confidence in the space,adopting the industry jargon of “diamond hands” and “black belt HODLers” to indicate its commitment despite market volatility.