Lantern Ventures' Collapse Marks a New Era of Accountability for Crypto Industry After FTX

Lantern Ventures, a London-based crypto hedge fund established by Tara Mac Aulay, a former co-founder of Alameda Research, is preparing to close its external investment funds and return money to its investors after operating for seven years, according to

. At its height, the firm oversaw assets exceeding $600 million and is now considering options such as seeking a buyer or transforming into a family office, though no definitive path has been chosen. This development represents a major transition for Lantern, which was originally founded with a philanthropic mission—historically donating half of founder profits to impactful charities.

The process of winding down is underway, with Lantern having stopped accepting new investments and starting to return capital to its outside investors. Layoffs are anticipated, but the precise number of employees affected has not been disclosed. Lantern’s closure comes at a time of wider industry turmoil, following the downfall of prominent crypto companies like Celsius and FTX, both of which have connections to Mac Aulay’s earlier roles. During the peak of crypto lender bankruptcies in 2022, Lantern’s related fund, Pharos USD Fund SP, was identified as Celsius’ largest individual creditor, holding an $80 million claim.

Mac Aulay, who previously headed the Center for Effective Altruism—a philanthropic organization with ties to FTX founder Sam Bankman-Fried—has not issued any public statements regarding Lantern’s closure. Despite this, the firm’s commitment to philanthropy remains a central part of its identity. The decision to wind down follows a strategic review amid ongoing regulatory challenges and waning investor interest in high-risk crypto ventures.

Lantern Ventures’ closure highlights the ongoing consolidation within the crypto industry, as firms with longstanding industry roots reconsider their business models. While Lantern’s exit may not immediately shake the market like larger firms, it reflects a growing sense of caution among institutional investors. The possibility of Lantern reemerging as a family office may also point to a broader shift, with crypto founders increasingly turning to private wealth management in response to skepticism in public markets.

According to sources, Lantern has held initial talks with prospective buyers, but no firm offers have materialized. The company’s emphasis on proprietary trading and its links to Alameda Research—a major liquidity provider for FTX—make it a notable example in the evolving post-FTX crypto environment.

As Lantern Ventures moves to return funds to its investors, this step underscores the vulnerability of specialized crypto strategies in the aftermath of the market downturn. The firm’s closure adds to a mounting list of departures in the industry, including the shutdown of prominent trading desks and hedge funds that flourished during the 2021 crypto surge.