Arthur Cheong's DeFiance Capital raising $100 million to invest in liquid tokens

Quick Take

  • DeFiance Capital plans to raise a $100 million fund to invest in liquid tokens, sources tell The Block.
  • Almost half of the targeted fundraise already has been completed, one source said.

DeFiance Capital, the crypto venture capital firm that recently distanced itself from bankrupt crypto hedge fund Three Arrows Capital (3AC), is in the process of raising a $100 million fund to invest in liquid tokens, three sources with direct knowledge of the matter told The Block.

The fund is called "Liquid Venture Fund," one of the sources said, adding that almost half of the targeted fundraise has been completed.

While the target raise is $100 million, the fund can get started with investing with less, two of the three sources confirmed. DeFiance Capital has received some commitments from one crypto fund of funds and a few family offices.

DeFiance Capital was founded in 2020 by Arthur Cheong, and the firm once described itself as a “sub-fund and share class of Three Arrows Capital.” After 3AC got into financial trouble in June, DeFiance Capital said in July that it is a separate firm from 3AC and operates independently.


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3AC had grown into one of the crypto industry's biggest hedge funds, before May's collapse of the Terra ecosystem left it facing significant losses. In June, a court in the British Virgin Islands appointed financial advisory firm Teneo to handle 3AC's liquidation. 3AC later filed for Chapter 15 bankruptcy in New York.

DeFiance Capital recently said it had been "materially affected" and "prejudiced" by the liquidation of 3AC.

DeFiance's new fundraising effort comes as more venture capital giants are looking to invest in liquid tokens. Earlier this year, Sequoia Capital launched a $500 million-$600 million crypto fund to primarily invest in "liquid tokens" — tokens that are already listed on crypto exchanges and those that are yet to be listed — Shaun Maguire, partner at Sequoia Capital, told The Block at the time.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Yogita Khatri is a senior reporter at The Block, covering all things crypto. As one of the earliest team members, Yogita has played a pivotal role in breaking numerous stories, exclusives and scoops. With nearly 3,000 articles under her belt, Yogita holds the records as The Block's most-published and most-read author of all time. Prior to joining The Block, Yogita worked at crypto publication CoinDesk and The Economic Times, where she wrote on personal finance. To contact her, email: [email protected]. For her latest work, follow her on X @Yogita_Khatri5.
Ryan Weeks is deals editor at the The Block, focused on fundraising, M&A and institutional trends in the crypto space, among other things. He is particularly interested in investigative work — so please send tips! Ryan previously worked at Financial News, Dow Jones as a fintech correspondent in London. Prior to that, he wrote for several different publications, including Sifted, AltFi and Wired. Beyond journalism, Ryan is a keen reader and writer. He enjoys all things active, especially running, rugby, climbing and tennis.