BlockTower Capital has experienced a security breach where fraudsters gained unauthorized access and managed to withdraw funds from the fund’s accounts. This puts the company which has an asset base of $1.7 billion at risk.
The $1.7AUM crypto investment firm has suffered a security breach resulting in the partial draining of its funds.
Per a Bloomberg report, while the funds are still missing and the hacker has not been apprehended, BlockTower Capital is deploying blockchain forensics analysts to determine how the money was stolen and has recently informed its limited partners about the theft.
BlockTower Capital is a crypto-asset investment firm that combines professional trading, investing, and portfolio management in the emerging digital asset class.
Founded by Ari Paul and Matthew Goetz in 2017, BlockTower Capital is known for its multidisciplinary approach, blending venture capital and trading strategies across cryptography, game theory, and economics.
The firm’s mission involves navigating the complexities of programmable blockchains and contributing responsibly to developing the globally connected crypto industry.
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BlockTower Capital not only invests in blockchain projects but also actively participates in the development of blockchain infrastructure, focusing on financial services’ future, including on-chain asset securitization and support for credit originators.
Firms and projects such as token developer Dapper Labs, gaming studio Sky Mavis, and Terraform Labs, creator of the failed TerraUSD stablecoin have enjoyed investments from BlockTower.
It’s worth noting that this hack is not the first setback for BlockTower. Last year, BlockTower Capital decided to shut down its “market-neutral” crypto fund that had managed over $100 million at one point. The market-neutral fund aimed to generate returns regardless of the direction of crypto prices.
BlockTower cited several reasons for shutting down the fund and returning capital to investors. Amongst the reasons it listed was the implosion of FTX and its primary hedge fund fell victim to fraud, resulting in losses for the company.
Despite the closure of the market-neutral fund, BlockTower continues to operate and pursue other investment strategies, particularly in the realm of “real-world” assets.
