Dragonfly Capital Launches $650M Crypto Fund Amid Market Turmoil

“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.”

Crypto venture capital firm Dragonfly Capital has closed its fourth fund at $650 million.

The fund comes as the broader cryptocurrency market faces a severe downturn, with token prices declining and investor enthusiasm weakened.

$650 Million Fund

Dragonfly’s previous fund, its third, deployed $500 million into startups such as Polymarket, Rain, and Ethena. The new $650 million vehicle aims to continue that trajectory and will provide capital for the firm to pursue early-stage investments at a time when the crypto venture sector is experiencing a slowdown as deal activity declines and firms face challenges in raising additional capital from investors, according to Fortune.

Speaking about the latest development, co-founder Haseeb Qureshi commented,

“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.”

The firm’s investments have included Layer 1 blockchain projects such as Avalanche, financial services firms like Amber Group, and other crypto projects. Besides, Dragonfly’s operations have continued through multiple market disruptions, such as the collapse of the Terra Luna ecosystem, the FTX bankruptcy, and a move away from China amid a local crypto crackdown.

Scrutiny Linked to Tornado Cash Investment

It has also faced regulatory scrutiny from the Department of Justice (DOJ). In July 2025, prosecutors informed a federal judge that they were considering criminal charges against employees of the crypto venture firm, including general partner Tom Schmidt, in relation to the 2020 investment in Tornado Cash.

The statement was made by prosecutor Nathan Rehn to District Judge Katherine Polk Failla of the Southern District of New York during a break in the trial of Tornado Cash developer Roman Storm, who was later convicted of operating an unlicensed money transmission. Dragonfly co-founder Haseeb Qureshi clarified that the firm has fully cooperated with the government investigation, which began in 2023. He had then stated that if charges are filed, they intend to defend themselves.

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The Justice Department later backtracked, and no charges were filed against Schmidt.