Arthur Hayes’ Fund Wants to Avoid Regulatory Conflicts With Decentralization

The investment head of Maelstrom, the inaugural fund from BitMEX founder Arthur Hayes’ family office, predicts a large portion of global GDP will be transacted via blockchain


Artwork by Axel Rangel


Maelstrom is the debut fund from BitMEX founder Arthur Hayes’ family office. Just five months old.

BitMEX’s former CEO is serving as Maelstrom chief investment officer, with Akshat Vaidya — previously BitMEX’s vice president of corporate development and strategic finance — operating as the fund’s investment head.

Hayes, who’s still on probation as a result of Bank Secrecy Act charges, has indeed been active in crypto since his case was finalized. 

But Maelstrom must find its footing as crypto experiences tightening across its venture capital landscape, alongside diminished late-stage funding.

There are signs of revitalization. Still, startups should avoid securing funds at excessively high valuations in order to mitigate the impact of any subsequent bear market. 

Blockworks caught up with Vaidya to learn more about how Maelstrom navigates that necessary realism, while maintaining focus on tangible returns.

Blockworks: Can you provide an example of a startup you’ve invested in that you believe is doing an excellent job in building decentralized infrastructure?

Vaidya: Our debut investment in January was in Obol Labs, a distributed validator technology middleware company that allows Ethereum validator keys to be “split” among multiple node operators, effectively reducing single points of failure for Ethereum staking. 

We like startups like these for a few reasons: 

  1. The team has a mission-critical offering addressing a potentially huge market. 
  2. It’s led by high-quality founders building strong tech/operational moats, making it difficult for competitors to enter the sector. 
  3. Its business model is complementary — and sticky with profitable protocols or businesses in Ethereum staking — rather than competitive.

Blockworks: Given your focus on decentralization, how does Maelstrom see the current regulatory landscape affecting the future of decentralized systems and blockchain technology?

Vaidya: We like to invest where there is no conflict between regulatory concerns and decentralization. There have honestly been cases in the past where regulators rightfully called out counterparty and ecosystem risks of custodial business models in our industry that would have been mitigated or eliminated entirely by greater decentralization. This is where we like to play.

Blockworks: What strategies does Maelstrom employ to ensure that investments are both technologically innovative and financially viable in the long run?

Vaidya: Our financial, operational, legal and tech diligence is rooted in our DNA as founders, builders and operators ourselves. [Hayes] built one of the first profitable unicorns in this industry, and hence Maelstrom has a knack for selecting winning teams and products.

Blockworks: How does Maelstrom support founders after initial investment?

Vaidya: [Hayes] is one of the few investors out there in any industry who has ever built a profitable unicorn from the ground up himself. Many investors out there are excellent at backing winners; but [Hayes] is also excellent at building them. Founders tend to view his experience, relationships and advice as hard to come by. 

And given our check size ($100,000 — $250,000), we rarely crowd out others on the cap table. Hence, other like-minded investors tend to invite us to deals as well, as they see us as complementary, not overly dilutive or redundant.

Blockworks: How do you anticipate the future of decentralized products, services, and markets to evolve in the next five to 10 years? How does Maelstrom position itself for these changes?

Vaidya: Within our lifetimes, a nontrivial amount of global GDP will be directly or indirectly cleared on blockchains (public, state-permissioned, and private). We expect this change to come about the same way it did for Zoom — prior to Covid, Zoom spent nearly a decade building infrastructure for a world that didn’t exist yet. Legacy in-person workplace infrastructure worked just fine until suddenly it wasn’t an option. 

That’s when new, alternative workplace infrastructure (like Zoom) turned out to be visionary, proving indispensable for the world it predicted would eventually come. Nowadays, if you don’t use Zoom, Hangouts or Teams you basically don’t exist. That seismic behavioral change came about in a span of just six to 18 months. 

Blockchain too will have its “Zoom/Covid” cambrian explosion moment some day, when legacy financial infrastructure starts to fail us (for any number of geopolitical, economic or technological reasons). When that happens, our portfolio will be positioned to capture meaningful value.

Blockworks: Given Arthur Hayes’ background, does Maelstrom focus specifically on blockchain-based financial products?

Vaidya: Maelstrom is open to any business model that monetizes the internet in a new way previously impossible.

Blockworks: Could you elaborate on Maelstrom’s long-term mandate? How does this affect your investment decisions compared to other funds that might prioritize quicker returns?

Vaidya: Our family office structure allows us to invest with a longer horizon in mind than typical venture funds, which are boxed into deals with three- to five-year exits. Of course we’ll do those deals too; but we’re also building a long-term portfolio of decentralized infrastructure companies/protocols that will serve as building blocks of the future.

This interview has been edited for brevity and clarity.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

MON - WED, MARCH 18 - 20, 2024

Blockworks’ Digital Asset Summit (DAS) will take place March 18-20, 2024 at The Hilton London Metropole. Why London? Momentum.  London has become one of the world’s hottest crypto hubs.  Innovation is thriving, new institutional investors are flocking in, and regulators like […]

recent research

Research report - cover graphics-2.jpg


Base has doubled-down on its commitment to the Superchain vision, has shown early signs of success with nearly $400M in TVL, and has become home to novel dapps such as which has seen significant traction.


Binance was earlier instructed to cease serving Belgium because it offered services from countries outside the European Economic Area


Satsuma’s co-founder told Blockworks he closed the acquisition deal with Alchemy last month


Multicoin Capital and Collider Ventures led the seed round


Pilot trial shows CBDC platform speeds up cross-border payments, cuts costs and improves transparency, HKMA’s Eddie Yue said


Aave’s stablecoin has yet to hit its $1 peg — and Bluechip’s Vaidya Pallasena thinks recent tweaks won’t solve the problem


Bernstein estimates crypto will mature from a ‘cottage industry’ to an asset management industry