Lantern Ventures to Wind Down Funds as Crypto Market Struggles Persist

TLDR

• Lantern Ventures is closing external funds and returning capital to investors amid market challenges.
• The firm peaked with $600 million in assets under management before facing recent setbacks.
• Lantern Ventures may pivot to a family office or seek a buyer as it winds down operations.
• Staff layoffs are expected as the firm adjusts to a smaller scale in the volatile crypto market.
• Lantern’s affiliate fund, Pharos USD, was the largest creditor in Celsius’ 2022 bankruptcy.

Lantern Ventures, a crypto trading firm founded by former Alameda Research co-founder Tara Mac Aulay, is winding down its operations. After seven years of managing assets in the volatile world of cryptocurrency, the London-based hedge fund is returning capital to investors and closing external funds. The company is also reportedly in discussions to find a buyer or pivot its operations to a family office model.

Fading Amidst Market Turmoil

According to a report by CoinDesk, Lantern Ventures peaked at $600 million in assets under management, but recent market conditions have proven challenging. The crash in crypto markets on October 10 compounded difficulties for many firms, making institutional fundraising increasingly difficult. Lantern’s decision to close its funds marks a significant change for the company and its staff.

In addition to shutting down its external funds, Lantern Ventures’ staff is expected to face layoffs, as the company adjusts to a smaller scale. The firm’s move is in line with broader trends in the crypto industry, where many firms have struggled to navigate the volatile market.

Exploring Future Paths

Lantern is considering alternatives for its future, including the possibility of relaunching as a family office. While it seeks a buyer for its operations, it remains uncertain how the firm will reshape itself in the future. This decision is a stark reminder of the challenges faced by crypto investment firms in today’s market environment.

Before founding Lantern Ventures, Tara Mac Aulay had been CEO of the Center for Effective Altruism, an organization linked to Sam Bankman-Fried’s FTX. Lantern itself was built on a foundation of philanthropy, with half of the founders’ profits directed to charitable causes.

The firm’s affiliate, Pharos USD Fund SP, was listed as the largest creditor in the bankruptcy proceedings of the crypto lender Celsius in 2022. As Lantern Ventures winds down, the crypto sector continues to face turbulence. The firm’s closure highlights the ongoing difficulties for crypto hedge funds as they attempt to navigate an unpredictable market.

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