European VCs are finally launching crypto funds — what took them so long?
“European VCs completely slept on blockchain,” says 1kx founding partner, Lasse Clausen, “That meant most VCs didn’t have the mandate from their limited partnership agreement to buy tokens”
In some jurisdictions, however, venture firms still face a problem as old as money itself: custody.
Yet there is a regulatory workaround. The €100 million Ledger Cathay Fund was set up as an unregulated special purpose vehicle, meaning they don’t need to have an EU custodian, says de Vauplane.
Also,
This week, a committee of the European Parliament passed its Markets in Crypto-Assets (MiCA) regulation, which will aim to bring digital assets under the wing of institutional regulation across the bloc. Following another vote, this could become law in two years.
“I think we’re ahead in Europe versus the U.S. with MiCA coming to the market in 2024 but in the U.S., it’s still state-by-state,” he says. “It’s going to provide clarity for investors and in the coming years, that’s going to be our competitive edge.”
Notice how slowly such things churn, with potentially 2 more years of refining.
However, funding has been picking up:
Europe surpassed Asia in the global share of blockchain venture funding raised in the second quarter of this year, jumping by 25% as other regions slumped, according to The Block Research.
At the moment, it isn't just about having some great Web3 idea, or even being able to implement it, but also the legal structure that can facilitate funding as well as clarify the status of the project tokens.