Q4 2023: Crypto VC Funding Overview
The crypto venture capital landscape remains subdued in the fourth quarter, with fewer high-profile funding rounds closing compared to earlier in the year. According to Kaden Stadelmann, chief technology officer at Komodo Platform, the “crypto sector is facing pressure from numerous angles,” noting that AI has siphoned considerable demand from crypto, and that “VC investment in AI far outpaces VC investment into crypto.” Stadelmann also cited macroeconomic uncertainty as a reason venture capital firms are taking a more cautious approach.
At the same time, much of the remaining activity has shifted toward the core Bitcoin (BTC) business ecosystem, which often doesn’t rely on traditional venture funding. “Bitcoin-focused ventures can bootstrap through community and network support rather than VC,” said Gabe Salinas, CEO of Alamo Labs and founder of the San Antonio Bitcoin Club.
Despite the slowdown, capital is still flowing selectively into projects that build the plumbing of the digital asset economy, particularly in areas such as stablecoins, payment infrastructure and decentralized trading platforms.
Recent Funding Rounds: A Closer Look
Telcoin Closes $25 Million Funding Round to Build Digital Asset Bank
Telcoin, a fintech company developing blockchain-based financial services, has raised $25 million in an ongoing pre-Series A funding round to advance the launch of its digital asset bank, which is expected later this year. The funding forms part of Telcoin’s capitalization requirements under its conditionally approved Nebraska Digital Asset Depository Institution (N-DADI) charter — a special state-level banking framework that allows institutions to custody digital assets and offer blockchain-based financial services under US banking supervision.
The raise also supports Telcoin’s plans to enter the stablecoin market with the launch of eUSD, a new US dollar–pegged stablecoin designed for consumer use within the Telcoin ecosystem. The eUSD token will prioritize usability for payments and remittances over serving primarily as a trading instrument.
F-Prime Backs Hercle’s $60 Million Raise
Hercle, a digital asset and stablecoin infrastructure company, has raised a total of $60 million in funding to accelerate its global expansion and develop institutional-grade stablecoin infrastructure for faster cross-border payments. The raise includes a $10 million equity investment led by F-Prime, with participation from Fulgur Ventures and Exponential Science, alongside a $50 million credit line to support liquidity.
Hercle says its platform has processed more than $20 billion in transactions for over 200 institutional clients, including financial institutions, payment providers and exchanges. The company reports that 90% of transactions settle in under five minutes, highlighting its focus on speed and scalability for large-value global payments.
Sui DEX Momentum Raises $10 Million
Momentum, the largest decentralized exchange (DEX) on the Sui blockchain, has raised $10 million in a new funding round at a fully diluted valuation of $350 million. The round was led by HashKey Capital, with participation from Anchorage Digital and other institutional investors.
Founded by former Libra and Amazon engineer Wendy Fu, Momentum has emerged as the leading DeFi protocol on Sui, based on total value locked (TVL), user base and cumulative trading volume. The platform reports 2.1 million users and more than $22 billion in cumulative trading volume.
Momentum said it plans to use the new capital to expand beyond the Sui ecosystem through crosschain integrations and to develop institutional-grade compliance features that will enable regulated onboarding for professional investors.
Temple Digital Raises $5 Million to Build Institutional Trading Infrastructure
Temple Digital Group, an infrastructure developer building on the institutionally focused Canton Network, has raised $5 million in seed funding led by Paper Ventures, with participation from more than a dozen other investment firms.
Temple is developing a privacy- and compliance-focused trading stack that combines traditional market features, such as order books and post-trade reporting, with blockchain-based capabilities, including tokenization, instant settlement and digital wallets.
The company said it will utilize the new funding to expand its product suite and implement additional integrations across the Canton Network.
Arx Research Raises $6.1 Million to Boost Merchant Stablecoin Adoption
Arx Research, a hardware and software provider focused on digital payments, raised $6.1 million from investors including Castle Island Ventures, Placeholder, 1kx and Inflection. The funding will be used to scale manufacturing and prepare for the commercial launch of its products early next year.
The company is developing Burner Capital, a handheld point-of-sale (PoS) device that enables merchants to accept both stablecoin and traditional payments on a single terminal. The device integrates with Flexa, allowing merchants to accept multiple cryptocurrencies — including Bitcoin, Ether (ETH) and Solana (SOL) — alongside stablecoins.
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