Dragonfly Capital, a prominent player in the cryptocurrency venture capital sector, has announced the closing of its fourth fund, amounting to $650 million. This move comes during a turbulent period for the broader cryptocurrency market, which has seen significant declines in token valuations and diminishing investor interest.
The new fund surpasses the $500 million raised for Dragonfly”s previous fund, which supported various startups including Polymarket, Rain, and Ethena. The firm aims to leverage this new capital to pursue early-stage investments, particularly as the crypto venture landscape experiences a slowdown characterized by reduced deal activity and challenges in securing additional funding from investors.
Co-founder Haseeb Qureshi expressed confidence in the firm”s strategy, stating, “We talk out loud and we say what we think. In a space that is just completely flooded with bulls**t and with fakers and self-promoters, I think that has actually been a superpower.” This candid approach has set Dragonfly apart in an increasingly crowded market.
Dragonfly Capital has a track record of investing in significant Layer 1 blockchain projects, including Avalanche and financial service firms like Amber Group. Moreover, the firm has navigated through various market disruptions, including the fallout from the collapse of the Terra Luna ecosystem and the high-profile bankruptcy of FTX. Despite these challenges, Dragonfly”s operations have remained robust.
However, the firm has also faced scrutiny due to its involvement with Tornado Cash, a crypto protocol linked to privacy solutions. In July 2025, prosecutors indicated potential criminal charges could be considered against employees of Dragonfly Capital, including general partner Tom Schmidt, regarding their investment in Tornado Cash made in 2020. This statement arose during the trial of Tornado Cash developer Roman Storm, who was ultimately convicted for operating an unlicensed money transmission service.
Qureshi clarified that Dragonfly has fully cooperated with the investigation initiated by the Department of Justice (DOJ) in 2023, asserting their commitment to defend against any charges should they arise. Fortunately for the firm, the DOJ later decided not to pursue any charges against Schmidt.
As Dragonfly Capital rolls out its new fund amidst these market challenges, its ability to secure early-stage investments could potentially influence the future landscape of cryptocurrency ventures, offering a beacon of hope in a market currently marked by uncertainty.
