Chinese crypto founders shelve US$500 million ether digital asset treasury project

Some of China’s cryptocurrency heavyweights have called off a US$500 million ether digital asset treasury (DAT) project, as the broader crypto market remains in a slump, according to people familiar with the matter.

The project was initiated earlier this year by Huobi founder Leon Li Lin, HashKey Group chairman and CEO Xiao Feng, Meitu co-founder Mike Cai Wensheng and Fenbushi Capital founder Bo Shen, who aimed to raise US$500 million to launch a DAT firm that would invest in the world’s second-largest cryptocurrency.

The worsening crypto market conditions forced the project’s proponents to shelve the initiative, which had already raised US$110 million in capital commitments, the people said.

DAT companies refer to publicly listed firms that sought to boost their value by holding large amounts of cryptocurrencies. The best known DAT firm is Nasdaq-listed Strategy, formerly known as MicroStrategy, which holds nearly 650,000 bitcoin.

DATs have grown popular in the US over the past year amid rising crypto prices, but this type of company has not been embraced by regulators in Hong Kong.