Other industry highlights:

• Seven-Year Prop VC Fund Opens to Outside Capital After 49x DPI

• Crypto Multi-Strat to Operate Within $6B Asset Manager

• Crypto Heavyweights Back $15M Venture Fund II

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^{🗞 Allocator Developments 🗞}

World’s Largest Stablecoin Issuer Backs $3B Private Credit Fund — Tether is making a significant push into private credit through the launch of StableFund, a jointly sponsored evergreen vehicle with specialist asset manager Fasanara Capital. The two firms are anchoring the strategy with $400M of combined co-investment and are targeting up to $3B from third-party institutional investors. Fasanara will manage the fund and deploy capital into short-duration, asset-backed lending, while Tether will serve as co-sponsor, originator and advisor, sourcing USD₮-linked financing opportunities and providing stablecoin settlement infrastructure.

VC Firm Anchors $300M Abu Dhabi-based Stablecoin Fund — Global crypto venture firm Hashed has agreed to serve as the anchor investor in a new $300M private credit fund managed by Thoro Capital Management, the Abu Dhabi-based firm founded by Further Ventures co-founder Mohamed Hamdy. The strategy will provide U.S. dollar loans settled through stablecoins to digital asset businesses, using traditional corporate credit underwriting based on financials, cash flows and covenants rather than relying primarily on crypto collateral. Hashed will provide capital and support Thoro’s geographic expansion as the manager launches and scales the strategy.

Crypto Heavyweights Back $15M Venture Fund II — FalconX, Hutt Capital and Arrington Capital are among the disclosed limited partners backing Breed VC’s second early-stage venture fund, alongside individual investors Nic Carter, Rob Hadick and Jake Brukhman. The $15M fund, which closed earlier in 2026, targets early-stage investments in open financial infrastructure and decentralized AI, with checks ranging from approximately $250K to $750K.

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🔥 What’s Hot in Crypto 🔥

Seven-Year Prop VC Fund Opens to Outside Capital After 49x DPI

Moonrock Capital is opening its investment strategy to outside investors for the first time, launching an early-stage venture fund focused on pre-seed opportunities across digital assets and onchain finance. The launch follows seven years of investing proprietary capital, during which the firm built its track record, brand and investment strategy before approaching external LPs.

From 2019 onwards, Moonrock says its proprietary investments generated a 49x DPI on invested capital. Historically, the firm has taken a hands-on approach to early-stage investing, writing first cheques into pre-seed companies and working closely with founders well beyond the initial investment. With its first fund, Moonrock plans to build a concentrated portfolio of equity and token investments at larger average cheque sizes to double down on their track record and unique dealflow access they have built.

The decision to raise external capital comes as Moonrock sees a more favorable backdrop for institutional digital asset investing. The firm points to greater regulatory clarity across the U.S. and Europe, growing participation from traditional financial institutions in onchain markets, and what it views as a widening gap in which industry fundamentals are now running ahead of asset prices rather than following them. Moonrock believes bringing in outside capital will allow it to institutionalize the platform, expand its brand and deploy larger cheques while preserving the hands-on investment approach developed through its proprietary portfolio.

The strategy will centre on three primary themes. The first is "frontier finance", targeting markets and business models made possible by blockchain infrastructure that were previously difficult or impossible to build within traditional financial systems, with stablecoins serving as a leading example. The second is an anticipated inflection point in European financial markets, where Moonrock sees the need for financial innovation converging with regulation increasingly designed to enable digital asset markets at scale. With the U.S. providing growing validation for digital asset adoption, the firm expects that momentum to increasingly extend into Europe. The third is the emerging "intent economy", where Moonrock expects a new generation of agent-native financial products, applications and marketplaces to be built onchain as autonomous software agents become increasingly capable of transacting and interacting directly with financial infrastructure.

Moonrock's three founding partners bring complementary backgrounds across science, finance, entrepreneurship and engineering, reinforced by years of investing together across crypto market cycles. Managing Partner Simon Dedic leads investment direction and key relationships, while General Partners Valentin Wunderlich and Leon Schleer bring markets and engineering expertise, respectively. The firm intends to stay deliberately small, taking the view that early-stage strategies have a real capacity ceiling and that returns matter more than scale.

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Crypto Multi-Strat to Operate Within $6B Asset Manager

Monarq Asset Management is set to operate within the 21shares platform as FalconX brings its asset management businesses closer together, according to an investor letter obtained by Crypto Funds Watch from a confidential source familiar with the situation. The move is an internal reorganization rather than an external transaction, with Monarq remaining the fund’s investment manager and its mandate, fees and investor liquidity terms unchanged.

Beginning October 1, Monarq’s compliance, risk management, reporting and governance functions are expected to transition onto 21shares’ institutional infrastructure. Monarq’s existing leadership will continue directing capital allocation and portfolio strategy, while Duncan Moir, CIO of 21shares and former head of digital assets at Aberdeen, will oversee the combined active management capability.

The move marks the latest chapter for an investment business with roots stretching back several crypto cycles. Monarq was previously known as MNNC Group, which raised more than $100M in 2024, and traces its lineage to quantitative crypto hedge fund LedgerPrime, which managed roughly $400M at its peak. FTX acquired LedgerPrime parent Ledger Holdings in 2021, before members of the investment business later relaunched under MNNC and subsequently rebranded as Monarq.

FalconX became Monarq’s strategic investor and majority shareholder in 2025 and also acquired 21shares that year, setting the stage for the consolidation. According to the investor letter, 21shares manages more than $6B across approximately 60 products listed on more than ten regulated exchanges, supported by its proprietary Onyx operating platform.

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Discretionary Crypto Manager Tops $200M in AUM with $30M Distressed Fund Launch

Third Eye has launched a $30M distressed fund focused on special situations and dislocation-driven opportunities across digital assets. The fund began trading on September 1 and expands the firm’s investment platform, which manages more than $200M across its discretionary fund, distressed fund and side-pocket vehicles.

The new strategy will deploy capital into complex, illiquid and mispriced situations where returns are driven primarily by market dislocations rather than broad crypto market direction. Target opportunities include bankruptcy claims and estate-driven recoveries, stablecoin dislocations, DeFi restructurings and recoveries, LP secondaries, asset-backed and collateralized credit, and litigation-related trades.

Third Eye sees a persistent funding gap in these areas as volatility, forced selling and fragmented markets create opportunities that can be difficult for traditional capital to access. Legal and technical complexity, compliance constraints and relatively small transaction sizes can limit institutional participation, while distressed situations often require investors to move quickly and combine legal, on-chain and traditional financial analysis.

The distressed fund is led by CEO and Co-CIO Tian Zeng, a veteran of Citi, Deutsche Bank and Citadel, alongside Co-CIO Federico Natali, a former JPMorgan exotics trader and crypto-native trader known for his performance across major digital asset trading venues.

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🍿 Blockchain Bytes 🍿

• RockawayX, a $2B digital asset investment firm, committed $150M to Catapult, a new initiative aimed at bringing private credit and other yield-generating real-world assets onchain. The program will provide venture funding, product structuring, liquidity, market making and distribution for tokenized credit products, expanding a platform that already includes venture funds, a market-neutral strategy and roughly $300M deployed through its vault business (Coindesk)

• Motus Capital Management, which manages a fundamental, directional hedge fund focused on liquid crypto markets, reported a net $13M increase in cumulative capital raised across its onshore and offshore fund entities, according to newly amended Form D filings (EDGAR)

• Kat Sullivan recently departed her role as Head of Business Development at Feynman Point Asset Management, which reportedly operated as Republic Digital, according to her LinkedIn. Sullivan previously served as Head of Business Development and Investor Relations at Reflexive Capital and brings more than 15 years of experience across institutional crypto and traditional finance (Kat Sullivan)

• DAG Wealth, the investment advisory arm of Digital Ascension Group, added the Canary Macro Income Fund to its platform for Qualified Clients. Managed by Canary Asset Management, a subsidiary of Canary Capital Group, the actively managed strategy combines traditional and digital assets and seeks to generate income across varying market environments through macro, income and crypto exposures (GlobalNewswire)

• Pythagoras Investments appointed Eric Zhao as CEO following founder Mitchell Dong’s departure to pursue an energy trading venture. The digital asset manager oversees approximately $90M, including $45M in its Arbitrage strategy, which returned 0.25% in August and approximately 2.5% year to date; Zhao previously served as COO and portfolio manager, while Yusen Chau remains CIO (Opalesque)

• Hyperithm’s onchain AUM surpassed $250M in August. One of Asia’s longest-running crypto hedge fund managers, Hyperithm has a more than seven-year track record and reports a 3.7 Sharpe ratio since inception (Hyperithm)

• Two Prime, one of the largest crypto asset managers, with its most recently publicly reported AUM at $1.75B according to Nasdaq last year, launched the Axiom WBTC Yield Vault, its first onchain product, targeting a 2% APY through loans to vetted institutional borrowers — Two Prime committed roughly $12M, or 150 BTC, of first-loss capital to the vault, extending an institutional credit business that has originated more than 3,000 BTC of balance-sheet loans (TwoPrime)

• Valour launches Valour Funds SPC, expanding beyond its lineup of more than 100 digital asset ETPs into actively managed strategies. Its first hedge fund, Smart Crypto Fund SP, will use a proprietary AI-driven strategy developed by Swiss portfolio manager Neuronomics to dynamically allocate across liquid digital assets (PRNewswire)

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