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Crypto venture capital firm a16z criticized for banning portfolio companies from selling their own tokens, facing accusations: team members still selling

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Crypto venture capital firm a16z criticized for banning portfolio companies from selling their own tokens, facing accusations: team members still selling

According to a report by Protos, Chris Dixon, a partner at the cryptocurrency venture capital firm a16z, recently claimed on The New York Times' podcast that the crypto teams or projects they invest in will not and are not allowed to sell their tokens to the public. However, looking at the companies he has invested in, they seem to disagree.

Chris Dixon: Portfolio Companies Will Not Sell Tokens

Chris Dixon, a partner and head of a16z, a top venture capital firm with investments totaling up to $76 billion, clarified some investment controversies in their podcast "Hard Fork" on the New York Times on the 26th. He claimed that companies invested in by a16z will not sell tokens to the public:

Any company we invest in will not sell tokens to the public, and we do not allow them to do so.

A few days ago, Dixon also expressed his position when interviewed by Fortune magazine, stating his views on the behavior of crypto venture capitalists seemingly selling tokens for short-term profits:

The current situation of short-term incentives and quick cashing out poses a crisis for crypto projects, and our crypto fund still holds 94% of the tokens purchased in private market transactions.

He added, "Token economies can drive participation on the one hand, but on the other hand, they can also become profit-oriented perverse incentives."

Protos Takes Stock of a16z's Crypto Projects

However, Protos, a foreign media outlet, expressed strong doubts after examining the companies invested in by a16z and listed the previous selling situations of related crypto projects.

Internet Computer ICP

In February and August 2018, a16z invested twice in DFINITY, the company behind the decentralized Internet Computer ICP, with a total financing amount of up to $160 million.

However, the tokens were subsequently distributed to those who had previously donated to the DFINITY Foundation.

Fei Protocol FEI

In addition, a16z also invested in the star algorithmic stablecoin project Fei Protocol, which at the time also received investments from other well-known institutions such as Coinbase Ventures and Framework Ventures.

However, in April 2021, Fei Protocol conducted a token sale through a launch program called Genesis Group, and on the same day, it spiraled into a death spiral due to oversupply and code vulnerabilities, causing the price of the FEI stablecoin to fail to anchor to $1.

Subsequently, the project's low usage forced it to shut down, and the launch program was later deemed to have illegally sold unregistered securities by the court:

The sale of FEI and TRIBE tokens constitutes the sale of unregistered securities, and those who directly purchased FEI and TRIBE tokens through the Fei protocol in the Genesis event will have the right to compensation.

Fei Protocol, the fallen star project, is about to end! Proposals for compensation for losses, disposal of assets will lead to dissolution

Axie Infinity AXS

Furthermore, a16z heavily invested in Sky Mavis, the developer behind Axie Infinity, raising over $300 million from October 2021 to July 2023.

Subsequently, Axie Infinity sold its native token AXS on the Binance Launchpad exchange.

Multiple NFT Projects

Additionally, several NFT projects invested in by the company have also sold NFTs to the public, including VeeFriends, PROOF Collective, and Yuga Lab.

Protos sarcastically commented:

It is currently unclear what exactly Dixon's statement that "a16z's portfolio companies cannot sell tokens" means.