THE CRYPTO WINTER'S NIGHT KING

Animoca Brands intends to use its cash to help reanimate a startup industry

- Zheping Huang, Sarah Zheng, Cecilia D’Anastasio, and Betty Hou

The so-called crypto winter has wiped out $2 trillion in digital currency market value since November, and many investors have gone into hibernation. Yat Siu, the head of Hong Kong-based Animoca Brands Corp., is on the offensive.

Animoca, Asia’s biggest investor in blockchain projects, is assembling a vast portfolio of finance, gaming, and social media companies, more than 340 in all. The goal, says Siu, is to give people ownership over their virtual properties and break up the empires of Meta Platforms Inc. and Microsoft Corp., which he describes as “digital dictatorships.”

Siu’s strategy was informed by the digital currency crash of 2018, when he turned his small video game studio into a crypto investor. The startup purchased a stake in the maker of CryptoKitties, a Pokémon-like game with virtual cats that can be bought and sold with digital money, and kept buying. Just four years later, Animoca is one of the crypto industry’s most influential investors, with backing from Sequoia Capital and George Soros.

“If people say this is a crypto winter, then 2018 was the crypto ice age,” Siu says. “Now is the time to deploy more capital, not less.”

If successful, Siu could become a gatekeeper of a different sort. An investment from Animoca, like one from the venture capital firm Andreessen Horowitz or Sam Bankman-Fried’s FTX in the US, is seen as an imprimatur of legitimacy for a crypto startup in Asia, and its absence a sign of concern. Now that Animoca is one of the few organizations left investing, Siu’s checkbook is an even more powerful weapon—and one that could severely backfire if this downturn doesn’t play out like 2018’s.