Dragonfly Capital Unveils $650 Million Crypto Fund During Market Challenges

Crypto venture capital firm Dragonfly Capital has successfully raised $650 million for its fourth fund amid the ongoing decline in the cryptocurrency market.

The latest fund is designed to support early-stage investments at a time when the sector is grappling with shrinking investor interest and diminished token valuations.

$650 Million Fund

Dragonfly’s previous fund saw $500 million allocated to various startups, including Polymarket, Rain, and Ethena. The newly established fund aims to continue this momentum despite challenging conditions in the crypto investment landscape.

Co-founder Haseeb Qureshi stated:

“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.”

Dragonfly’s investment strategies encompass Layer 1 blockchain initiatives like Avalanche and partnerships with financial entities such as Amber Group, ensuring sustained operations through market fluctuations like the collapse of the Terra Luna ecosystem and the FTX bankruptcy.

Scrutiny Linked to Tornado Cash Investment

The firm has also encountered legal scrutiny from the Department of Justice. In July 2025, prosecutors raised the possibility of criminal charges against Dragonfly employees, including general partner Tom Schmidt, over a 2020 investment in Tornado Cash. The prosecutor, Nathan Rehn, communicated this to Judge Katherine Polk Failla during the trial of Tornado Cash developer Roman Storm, who was ultimately convicted of illegally transmitting money. Co-founder Haseeb Qureshi reassured that the firm has fully cooperated with the government’s inquiries, which began in 2023, and expressed their intention to defend against any potential charges.

The Justice Department later withdrew its considerations, and Schmidt faced no charges.