Breaking the Mold: Former Regulator Launches Crypto Venture Firm
Former regulator Matthew Homer is making waves in the crypto industry by launching his own venture firm, the Department of XYZ, which recently raised $5.1 million. This move is breaking the mold in an industry where former regulators typically serve as legal counsel or advisors, rather than investors.
Homer, who previously oversaw crypto at the New York Department of Financial Services, is backed by limited partners who are former regulators from various agencies and industry leaders like Compound’s Robert Leshner and Multicoin’s Kyle Samani. The fund aims to provide essential regulatory advice to portfolio companies, rather than leading funding rounds.
In an interview with Fortune, Homer explained that the lack of a firm owning the regulatory lane in the venture space inspired him to launch the Department of XYZ. He emphasized the importance of having regulatory expertise on speed dial for startups navigating the complex regulatory landscape.
Homer’s journey from a regulator at the Federal Deposit Insurance Corporation to a venture investor reflects his evolving perspective on the potential of crypto. His time at DFS during the early days of the pandemic made him realize the benefits of crypto’s transparent and public nature compared to traditional financial institutions.
With a focus on financial infrastructure, stablecoins, and DeFi platforms, Homer’s fund has already made early investments in companies like Mountain Protocol and Superstate. Despite the uncertain regulatory environment in the U.S., Homer believes he can help founders anticipate and navigate regulatory challenges to avoid costly mistakes.
As more funds chase consumer apps and speculative assets, Homer’s unique position as a former regulator turned investor sets the Department of XYZ apart in the crypto industry. With a diverse group of advisors and industry leaders backing the fund, Homer is poised to make a significant impact in the evolving regulatory landscape of the crypto space.