According to the Wall Street Journal reports, Leading VC firm Sequoia Capital has cut its crypto fund by 65% to about $200 million amid the funding winter. Sequoia Capital has reduced its 2 significant venture funds, with the crypto fund (from $585 million to $200 million).

The move came amid several crypto exchanges and platforms broadcasting bankruptcy in recent months amid tightening regulations. Sequoia looks to invest in younger startups.

The company said the changes will sharpen its emphasis on seed-stage opportunities, providing liquidity to our limited partners.

The crypto fund will chiefly focus on new company formation, with the opportunity to increase these investments from seeds, venture, growth, and expansion funds as the companies mature. Sequoia is lowering the committed capital required from investors by paring the fund sizes.

The crypto and blockchain sector observed an investment of $2.32 billion in Q2FY23, marking a new cycle low and the lowest since Q4FY2020, an ongoing downtrend that began after a peak of $13 billion in Q1FY2022.

According to the crypto investment firm Galaxy Digital, crypto and blockchain startups elevated less money in three quarters combined than in Q2FY2022.

In Q2FY23, 10 new crypto VC (venture capital) funds raised only $720 million, the lowest amount since Q3FY2020, during the Covid-19 pandemic.