(Bloomberg) -- More venture capitalists are racing to raise new funds following a crypto comeback.  

Crypto-focused firm Paradigm is in talks with investors to raise between $750 million and $850 million for a new fund, according to people familiar with the matter who asked not to be identified discussing private information. Paradigm — founded by Coinbase Global Inc. co-founder Fred Ehrsam and ex-Sequoia Capital partner Matt Huang — is one of the largest players in the industry. 

If the deal is completed at $750 million, the fund will be the industry’s biggest since the crash. The high point for crypto VC fundraising came in May 2022, when venture firm Andreessen Horowitz raised a $4.5 billion fund. Shortly after that, there was a steep downturn in digital asset prices — a bust that the industry is still recovering from. 

Paradigm previously raised a $2.5 billion fund in the glory days of 2021, the largest-ever crypto investment vehicle at the time. In September, the Information reported that Paradigm was aiming to raise a $1 billion fund. Paradigm declined to comment on its current funding talks.

The firm has had an eventful year. Last summer, Paradigm drew criticism for a perceived lack of commitment to the industry when it updated its website and removed mentions of crypto, instead focusing on artificial intelligence. (It changed the site back shortly after.) In October, Ehrsam stepped down from managing partner to general partner. Also that month, Huang testified at the trial of FTX co-founder Sam Bankman-Fried, who was sentenced to 25 years in prison last week. 

Paradigm invested $278 million in FTX, with Huang stating that his firm was unaware of fraudulent practices at the now-bankrupt crypto exchange and that the firm later marked its FTX investment down to zero. Paradigm is also part of a class-action suit filed by FTX investors who alleged that the firm, along with Sequoia and private equity firm Thoma Bravo, gave an “air of legitimacy” to FTX through their investments in the crypto exchange. 

Despite these setbacks, the firm has since continued backing crypto projects, including leading an investment in Merkle Manufactory, which developed the software underlying the Farcaster social media network. The funding round valued the startup at around $1 billion. 

Paradigm joins other venture firms looking to raise crypto funds, including Hivemind Capital, which is raising a $50 million nonfungible token fund, and Hack VC, which announced a $150 million fund in February and is now looking to raise at least $100 million for another investment vehicle. 

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