There are still investors who want to put money into cryptocurrency startups, despite the recent wave of scandals and setbacks that have shaken the industry. A team of crypto investors is seeking $200 million to back digital-asset startups in a new firm called TenSquared Capital, according to two people familiar with the matter.

The venture, called 10SQ for short, is being launched by the co-founder and some employees of crypto-focused investment firm 10T Holdings. The firm 10T has $1.2 billion in assets under management according to PitchBook. It has expended all its capital and is ceasing to make new investments, according to the people, who asked not to be identified discussing private information.

10T Holdings invested in companies like digital asset exchange Kraken, crypto wallet-maker Ledger and the Bored Ape Yacht Club-creator Yuga Labs. Kraken is aiming to go public, while Ledger and Yuga Labs last raised funds at valuations of over $1 billion. Billionaire hedge fund manager Alan Howard was among 10T’s largest backers, the firm said in 2021, along with public pensions including the Municipal Employees’ Retirement System of Michigan.

Both 10T and 10SQ declined to comment on the new fundraising efforts. It comes at a time when cryptocurrency investing overall is sinking. VCs spent 80% less on crypto startups in the first quarter of this year than they did the year before.

Based in Los Angeles, 10SQ will include Stan Miroshnik, 10T co-founder and partner, as chief executive officer and managing partner, as well as Janchor Partners co-founder Elaine Co as general partner, according to internal documents reviewed by Bloomberg. The 10T employees Polina Bermisheva, Christopher Cheung, George Dawson and Ruby Hsu have also joined 10SQ, according to the documents. Dan Tapiero, the CEO of 10T Holdings, told a crypto-focused publication in February that he was starting a separate private equity firm called 1RoundTable Partners.

Some limited partners of 10T have already committed capital to the new fund, according to the people familiar with the discussions. They said the fund has planned two investments, including one in a crypto wallet infrastructure startup that will likely close in the coming months.

The firm 10SQ will seek to back crypto startups at various stages of growth, the people familiar with the matter said, and it will focus more on investing in equity versus tokens. The firm plans to become a registered investment advisor, following a path taken by other venture firms like Sequoia Capital and Andreessen Horowitz.

(Adds context on Elaine Co in fifth paragraph.)