AI boom siphons capital from crypto startups, VCs warn

The artificial intelligence boom is syphoning money away from crypto startups, venture capitalists warn.

Charles Chong, vice-president of strategy at crypto advisory firm BlockSpaceForce, told DL News that investors have “real alternatives with faster revenue visibility.”

“Crypto teams need to work harder,” he said. “That’s pushing founders to be more precise about defensibility, monetisation, and how their models hold up in a slower market.”

Chong’s words of caution come as crypto startups raised $128 million in the first week of March, DefiLlama data shows. That brings the total amount raised in 2026 to nearly $2.5 billion so far.

Still, this week’s investors include the likes of Peter Thiel’s Founders Fund, Ripple, Y Combinator, Wintermute, and Sequoia Capital, all piling into infrastructure for payments, trading, decentralised finance.

“Investors are still writing cheques, but only for teams that can clearly explain value capture and opportunity cost, especially in a world where AI offers a very different risk-reward profile,” Chong said.

Here are the top three raises this week.

ARQ, $70 million

ARQ, the Latin American fintech previously known as DolarApp, secured $70 million in Series B round, the largest venture round in the sector this week.

The raise was led by Sequoia Capital and Founders Fund. It seemingly signals institutional confidence as the company shifts from a cross-border dollar transfer service into a broader digital banking platform.

Handling more than $10 billion in annualised transaction volume across roughly two million users, ARQ plans to deploy the capital toward a full brand overhaul and the rollout of new products including wealth management services and high-yield local currency accounts.

The move highlights rising demand across Latin America for stablecoin-linked financial infrastructure, as consumers and businesses seek protection from persistent currency volatility and limited access to traditional banking services.

Crossover Markets, $31 million

Crossover Markets raised $31 million in Series B funding roundTradeweb Markets led the raise that valued the firm at roughly $200 million. Additional investors included Ripple and crypto market-maker Wintermute.

The company operates CROSSx, an execution-only electronic communication network built for institutional digital asset trading

Unlike many crypto exchanges, the startup says it separates trade execution from custody and market-making functions, a structure designed to minimise conflicts of interest and appeal to traditional financial firms.

QFEX, $9.5 million

QFEX, a hybrid derivatives exchange focused on tokenised real-world assets, raised $9.5 million in seed funding led by Yuri Sagalov of General Catalyst, with backing from Y Combinator and investor Paul Graham.

Founded by Cambridge mathematics graduates and former high-frequency traders from Citadel and Tower Research Capital, the platform allows investors to trade equities, commodities and foreign currencies via perpetual derivatives that operate around the clock.

You’re reading the latest instalment of The Weekly Raise, our column covering fundraising deals across the crypto and DeFi spaces, powered by DefiLlama.

Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email him at [e-mail].