Overview of Lantern Ventures’ Wind-Down
Lantern Ventures, a London-based crypto hedge fund founded by former Alameda Research executives, is reportedly winding down operations after seven years of trading in the digital asset market. The firm is returning capital to external investors and has closed its funds to new investments, signaling a strategic exit from its previous hedge fund structure.
At its peak, Lantern Ventures managed over $600 million in assets under management, making it one of the notable mid-sized crypto trading firms. The fund gained recognition for its quantitative trading strategies and the pedigree of its leadership team, which included former executives from the infamous Alameda Research.
Market Conditions and Fundraising Challenges
Declining market conditions and a sharp reduction in institutional appetite for crypto exposure have made it increasingly difficult for Lantern to raise new capital. The crypto market crash on October 10, 2025, added further pressure, making investors wary of committing new funds to trading operations.
The broader crypto hedge fund industry has faced a series of setbacks in recent years, with prominent players either shutting down or restructuring to manage internal capital. These conditions underscore how volatile and challenging the digital asset space remains, even for firms with experienced teams.
Staffing and Organizational Impacts
As Lantern winds down, several staff members are expected to lose their jobs, reflecting the operational impact of closing external funds. People familiar with the matter indicated that the company is trying to manage the process carefully, but some layoffs are inevitable as capital is returned to investors.
In addition to workforce reductions, Lantern is reportedly exploring strategic options to sustain its operations in a different form. These include finding a buyer for the firm’s assets or relaunching under a family office structure to manage the founders’ personal wealth and internal strategies.
Leadership and Founding Principles
Lantern Ventures was co-founded and led by Tara Mac Aulay, a former Alameda Research executive with a strong reputation in quantitative crypto trading. Mac Aulay declined to comment on the firm’s current restructuring or future plans, maintaining a low public profile despite the firm’s prominence in the market.
Before her trading career, Mac Aulay served as CEO of the Center for Effective Altruism, a nonprofit initiative focused on maximizing the impact of charitable work. The organization was closely aligned with Sam Bankman-Fried’s philosophy, which influenced Lantern’s early philanthropic approach.
Philanthropic Approach and Ethics
Lantern Ventures was built on philanthropic principles, with founders pledging to donate 50% of profits to high-impact charitable causes. This approach distinguished Lantern from many other crypto hedge funds, creating a dual mission of profit generation and social impact.
The firm’s philanthropic angle attracted a community of investors who were interested not only in financial returns but also in ethical and socially responsible investing. Lantern combined traditional hedge fund strategies with a mission-oriented framework, an uncommon approach in the high-risk crypto sector.
Connection to Celsius Bankruptcy
An affiliated entity, Pharos USD Fund SP, based in the Cayman Islands, was notably involved in the 2022 Celsius Network bankruptcy proceedings. Pharos USD Fund SP was listed as Celsius’ largest single creditor, with a claim of around $80 million, highlighting Lantern’s exposure to broader crypto market risks.
This connection illustrates how intertwined crypto hedge funds and lending platforms have been, and how failures in one area can ripple across the industry. Lantern’s involvement as a creditor in the Celsius case demonstrated both its market reach and the inherent risks of institutional crypto investing.
The Crypto Hedge Fund Landscape
Lantern’s wind-down reflects a broader trend in the crypto hedge fund space, where market volatility and investor skepticism have forced many firms to rethink their strategies. Large swings in digital asset prices, regulatory uncertainty, and declining liquidity have created a challenging environment for traditional hedge fund models in crypto.
Some firms have shifted to family office structures, internal trading, or alternative strategies to manage risk. Others have sought mergers or acquisitions to survive the downturn, demonstrating how firms are adapting to prolonged market stress.
Investor and Market Implications
For investors, Lantern’s closure represents both a loss of a trusted trading partner and an example of the risk inherent in crypto hedge funds. Returning capital may be a relief for some investors, but for others, the wind-down signals caution in allocating to mid-sized crypto funds.
Market participants note that even firms with strong leadership and historical success can struggle when broader market conditions deteriorate. Lantern’s experience may influence how investors approach risk management and due diligence in the crypto space.
Looking Ahead
Lantern Ventures may still have a future under a family office or through a strategic acquisition, according to sources. The firm’s expertise in quantitative trading, combined with its philanthropic principles, could make it an attractive target for consolidation or a model for a new kind of hybrid investment firm.
The decision to wind down external funds underscores the difficulty of sustaining a crypto hedge fund in an increasingly cautious investment climate. Lantern’s story reflects the broader challenges facing the crypto industry, including volatility, regulatory pressures, and evolving investor sentiment.
Conclusion
Lantern Ventures’ wind-down is another milestone in the maturation of the crypto trading and hedge fund landscape. While it marks the end of an era for one firm, it also highlights lessons about risk, market cycles, and the importance of adaptability in digital asset investing.
The combination of market turbulence, investor caution, and operational complexity shows that even experienced, well-capitalized firms are not immune to the realities of the crypto market. Lantern Ventures’ legacy may live on in its philanthropic approach and in the ongoing careers of its founders and former staff.’
Read More: Dogecoin ETF Could Go Live in U.S. Soon but DOGE Technicals Draw Bearish Picture for Now
