In a strategic move that marks a significant shift in its approach towards cryptocurrencies, Ant Group, a fintech powerhouse under the Alibaba conglomerate founded by billionaire Jack Ma, has revealed its plans to withdraw from the A&T Capital crypto investment fund, valued at $100 million. This decision comes just months after the resignation of Yu Jun, co-founder of A&T Capital, coinciding with an investigation into allegations of sexual harassment against him, which had ignited a public outcry at the time.
NEW: China’s Ant Group is planning to pull its investment from a $100 million fund as it retreats from crypto https://t.co/oVKft4SnTJ pic.twitter.com/zLkjzgbTzR
— Bloomberg Crypto (@crypto) September 18, 2023
Ant Group’s Background
Yu Jun, the former Chief Executive Officer of Ant Group, had played a pivotal role in establishing A&T Capital, an investment vehicle created by the fintech giant with the primary aim of investing in overseas blockchain projects and cryptocurrency ventures. The fund was established in April 2021 and quickly became known for its investments in prominent cryptocurrency startups during the bullish trends of 2021. Notable investments included Matrixport, a digital asset lending platform, and ConsenSys, the infrastructure development company behind Ethereum and MetaMask. Ant Group had been a major investor in A&T Capital.
Changing Crypto Investment Landscape
PitchBook data reflects a noticeable decline in venture capital inflows into the cryptocurrency sector, marking its lowest point since Q1 2020. This decline is primarily attributed to the cryptocurrency market crash of 2022, coupled with the surging interest in artificial intelligence (AI) technology.
Ant Group’s decision to exit the A&T Capital fund underscores a growing sense of caution among Chinese companies regarding cryptocurrencies. This shift mirrors the evolving crypto landscape in the “Land of a Billion People” in 2023, with some notable occurrences being:
- June 2023: Chinese law enforcement successfully dismantled a professional Bitcoin-based illicit substance trafficking network. Additionally, China’s state broadcaster CCTV reported on the SEC’s lawsuit against Binance and its CEO, Changpeng Zhao.
- July 2023: Zhaojun, the CEO of the Multichain project, had his computer, phone, hardware wallet, and cryptographic keys seized by Chinese authorities. Subsequently, the Multichain team was forced to permanently halt project operations.
- August 2023: Several high-ranking personnel from Chinese-origin cryptocurrency exchange Huobi (now HTX) found themselves under scrutiny by Chinese law enforcement. This action was initiated as the government continued its crackdown on unregistered platforms, money laundering, and illegal capital outflows, causing a flurry of FUD around Huobi.
In contrast, the Chinese government appears to be embracing cryptocurrencies within Hong Kong’s special economic zones, introducing regulations for crypto management and granting licenses to numerous international crypto companies to operate and provide services to citizens.
Conclusion
Ant Group’s decision to withdraw from the A&T Capital crypto investment fund reflects the changing dynamics and regulatory environment surrounding cryptocurrencies in China in 2023. With notable crackdowns on illicit crypto activities and a more measured approach by Chinese authorities, it appears that the landscape for cryptocurrencies within the country is evolving rapidly.
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