Crypto Investment Firm BlockTower Capital Suffers Losses in Hack

Crypto retail investors have frequently been victims of hacks and scams within the industry, and now a major investment firm has been targeted.

BlockTower Capital’s main hedge fund has been compromised and partially drained by fraudsters, according to Bloomberg. The company manages $1.7 billion in assets. The stolen funds are still missing, and the hacker has not been caught. BlockTower has hired blockchain forensics analysts to investigate the theft and has informed its limited partners about the incident, one source said.

Crypto hacks continue to impact the digital asset industry, with fraudsters stealing about $1.7 billion from projects last year, according to TRM Labs. Founded in 2017, BlockTower has offices in Miami and New York and has invested in companies such as nonfungible token developer Dapper Labs, gaming studio Sky Mavis, and Terraform Labs, the creator of the failed TerraUSD stablecoin. In 2022, the firm raised a $150 million venture fund.

This hack is not BlockTower's first setback. Last year, the company wound down its “market-neutral” crypto fund, which once managed over $100 million, after investment opportunities for the strategy dwindled.