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U.S. crypto fund targets Asian investors for new $800M growth equity fundDan Tapiero, the New York-based founder of 1RoundTable Partners and 10T Holdings, is on a mission to raise between $700 million and $800 million for his upcoming fourth fund, with a recent focus on Asian investment interest.A recent report by Deal Street Asia pointed out that Tapiero has turned his attention to the potential of inward Asian investment, not least through his recent one-week business trip to the region in early December.Photo by Towfiqu barbhuiya on UnsplashInvestment vehicles1RoundTable Partners was Tapiero’s original investment vehicle, positioning itself as a growth equity fund building a portfolio focused exclusively on growth-stage blockchain and crypto projects. 10T Holdings was established more recently, targeting mid to late stage digital asset ecosystem (DAE) firms as part of its equity fund. Earlier this year, 10T was reported by Bloomberg to have $1.2 billion under management while seeking another $200 million in new funding.10T Holdings has fully deployed its three previous funds, forming a portfolio of 24 active DAE companies, including Gemini, Animoca Brands, Yuga Labs and Deribit. Tapiero’s cautious approach to valuations has been rewarded. He turned down opportunities in FTX and Celsius Network at their peaks prior to both entities failing spectacularly in 2022.Crypto equity fund resilienceThe crypto industry faced challenges, including the collapse of FTX, leading to tighter regulations and reputational damage. Venture investments in the sector saw a decline, with statistics from Galaxy Digital Holdings indicating that Q3 2023’s venture investments were below $2 billion, the lowest since Q4 2020.Tapiero is undeterred and is actively raising his fourth growth equity fund, focusing on “digital asset ecosystem (DAE) companies.” This fund, managed under 1RoundTable Partners, will primarily invest in mature DAE companies with $40–50 million in annual revenue and a market valuation exceeding $400 million. Tapiero’s strategy of targeting lower-risk, growth-stage opportunities aligns with his hedge fund legacy.Asian investor focusTapiero is actively seeking new investors in Asia for Fund IV, targeting a first close in Q1 2024. His efforts are focused on addressing the lack of growth-stage capital, particularly in Asia, where confidence in digital assets has strengthened due to crypto-friendly regulations.The veteran macro investor, who founded Gold Bullion International in 2009 prior to turning his attention to the digital assets space, sees a window of opportunity in the secondary market. Having already invested about $660 million through 10T Holdings, he notes that investors may have only a “six-month window” to capture discounted opportunities.In an interview with Bloomberg earlier this month, Tapiero outlined his view that Q4, 2023 will be the crypto sector’s “best quarter since the bull market.” He added:“We think that the bear market finished in Q4 2022. We had a sideways move for a while and then in July [2023] things sparked off with Larry Fink’s [BlackRock CEO] comments.”As Tapiero navigates the crypto landscape with a strategic focus on growth and risk management, his approach appeals to traditional investors, including major pension funds. Fund IV represents a step toward contributing to the ongoing evolution of the digital asset ecosystem. It’s on that basis that the investment industry veteran is targeting Asian limited partnerships (LPs).

Rather than restrict or ban crypto, the Iranian government appears to have taken on a more positive approach, moving towards embracing the new asset class and regulating it.Photo by Lara Jameson on PexelsRegulatory frameworkOn Dec. 7, Iran’s Nour News Agency reported Minister of Economic Affairs and Finance Abdolnaser Hemmati as saying that Iran is moving towards managing and eliminating the adverse effects of digital currency on the economy and instead harnessing its positive effects, with a regulatory framework being brought in to ensure that positive outcome. Hemmati went on to confirm that digital money falls under the oversight of Iran’s central bank. The minister stated that he hopes that cryptocurrencies would be developed with the objective of boosting youth employment levels and boosting economic assets held within the Islamic Republic of Iran, while helping to nullify sanctions and aligning Iran’s activities in this respect with the global economy. Circumventing sanctionsThe United States first imposed sanctions against Iran in 1979. The Islamic Republic had been the most sanctioned country in the world up until February 2022 when Russia surpassed Iran due to Western opposition to Russia’s special military operation in Ukraine. Sanctions were lifted in 2016 as part of a deal on the limiting of Iran’s nuclear program. That deal was scrapped during U.S. President-elect Donald Trump’s first term in office, with the latest sanctions imposed on entities involved in the transportation of Iranian oil last week. At a BRICS summit held in Kazan, Russia in October, Russia added cryptocurrency to the agenda with a view towards discussing with Iranian and other BRICS country representatives its potential use to bypass sanctions. In July the Bank of Russia set out a recommendation to Russian businesses to use crypto in order to reduce the impact of Western sanctions. Up to $50B in crypto held by IraniansA subsequent report from Nour News Agency on Dec. 8 had good news for Hemmati relative to his aspiration to boost economic assets held within Iran. The report cited Iranian economist Sadegh Alhosseini, who claims that crypto assets to the value of between $30 billion to $50 billion are controlled by Iranians.  The economist provided the estimate after Iranian finance ministry and Central Bank of Iran (CBI) officials outlined that they are looking to make the crypto market in Iran more transparent. If Alhosseini’s estimate is accurate, it would mean that Iranians hold crypto assets to the equivalent value of one-third of the entire gold market in Iran. Alhosseini outlined these findings within a report published by the CBI which provided a summary of proposed upcoming policies relative to cryptocurrencies. The main objective of these proposed policies is to aid crypto traders to remain compliant with anti-money laundering (AML) regulations and local taxation requirements. The CBI has also been working towards launching the digital rial, a central bank digital currency (CBDC). The CBDC project has been running since 2018 and relies upon Hyperledger Fabric, an enterprise blockchain framework that was originally developed by the Linux Foundation. Having been locked out of the SWIFT financial messaging network, Iran has launched ACUMER as an alternative which it hopes to use for trade purposes with Asian partners. Direct payments between Russian and Iranian banking systems have also been enabled. 

Tokyo Government Launches Initiative to Support Security Token BusinessesThe Office of the Governor for Policy Planning under the Tokyo Metropolitan Government made an announcement yesterday regarding its new initiative aimed at promoting the issuance of security tokens.Photo by Ben Cheung on PexelsBlockchain-based security tokensGiven the growing interest in blockchain technology, which allows for decentralized peer-to-peer transactions, various applications have emerged within the financial sector. Notably, blockchain-based security tokens hold significance as they possess the potential to promote retail investments and reshape startup financing. This potential largely stems from the fact that these tokens can be issued in smaller denominations than traditional securities, facilitating direct connections between issuers and investors.Promoting growthIn an effort to broaden this market, the Tokyo government undertakes this initiative to foster the growth of security token issuance. This endeavor is expected to stimulate the development of various use cases for security tokens, as well as facilitate the widespread exchange of valuable expertise and insights into potential challenges within this sector.Financial supportIn accordance with the Financial Instruments and Exchange Act and the Specified Joint Real Estate Ventures Act, the Tokyo government will introduce subsidies for Tokyo-based businesses involved in security token-related activities. This initiative aims to provide financial support to businesses by covering a portion of the expenses associated with token issuance. Eligible expenses that can be subsidized by the government include platform usage, consultation, and system development costs.Under this program, the Tokyo government will offer financial assistance by funding up to half of the project-related expenses, with startups eligible for up to two-thirds. The maximum grant amount per project is set at 5 million yen ($36,000). Businesses can apply for these subsidies starting from May 31, 2023, with the application window remaining open until February 29, 2024. Although applications can be submitted at any point during this period, the window will close once the allocated budget is exhausted.