London-based Lantern Ventures, a crypto investment firm co-founded by associates of Sam Bankman-Fried and rooted in effective altruism, is shutting down its operations and returning capital to investors.
The closure marks the end for a company that, at its peak, managed over $600 million in digital assets. It involved layoffs as the firm begins the process of divesting its external funds.
The decision follows a prolonged “crypto winter” and increasing difficulties within the institutional cryptocurrency sector.
Lantern Ventures was led by Tara Mac Aulay, a recognized crypto trader and a co-founder of Alameda Research alongside Bankman-Fried.
Before her focus on crypto trading, Mac Aulay served as executive director of the Center for Effective Altruism, a philanthropic initiative also supported by the now-disgraced FTX founder.
The investment firm itself was founded on philanthropic principles, committing 50% of its founders’ profits to high-impact charitable causes.
However, the prolonged downturn in crypto markets, coupled with the collapse of FTX and other major lenders, severely eroded the firm’s business model.
Access to institutional capital became increasingly challenging after these industry seismic events. Analysts noted that significant market price drops on October 10 further complicated funding rounds, accelerating the demise of mid-sized firms like Lantern Ventures.
The firm had explored options including talks with potential buyers and even considered relaunching as a private family office before opting for a complete shutdown.
Lantern Ventures’ exposure to the volatile crypto market was significant. One of its affiliated funds, Pharos USD Fund SP, registered in the Cayman Islands, emerged as the largest individual creditor in the 2022 bankruptcy of crypto lender Celsius, claiming approximately $80 million.
This financial link highlighted the deep interconnectedness among crypto investment firms during the market’s expansion phase between 2020 and 2022, a period when institutional liquidity fueled high-risk ventures.
Lantern’s exit is seen by some as marking the end of an era for trading firms that emerged from the boom associated with Alameda and FTX. Its closure underscores how widespread distrust and a contraction of liquidity have forced numerous institutional players, even those with solid reputations or philanthropic missions, to leave the cryptocurrency ecosystem.