Key Takeaways
- • Matthew Homer, former senior superintendent of crypto at the New York Department of Financial Services, has launched Department of XYZ, a crypto-focused venture fund that raised $5.1 million in its initial close.
- • The fund's limited partners include prominent crypto industry figures Robert Leshner (Compound), Kyle Samani (Multicoin Capital), and the Winklevoss twins, alongside former regulators from multiple government agencies who serve as advisors to portfolio companies.
- • Department of XYZ positions itself as a regulatory advisory resource rather than a lead investor, with Homer stating the firm aims to provide "regulatory friends on speed dial" for portfolio startups rather than deploying the largest capital checks.
- • Homer's regulatory pedigree—spanning roles at the Federal Deposit Insurance Corporation (FDIC) beginning in 2012, a policy position at Quovo (acquired by Plaid), and leadership of DFS's research and innovation division—represents a rare transition from government oversight to venture capital founding partner, distinct from the typical regulator-turned-counsel model in crypto.
Summary
Matthew Homer, a former senior superintendent overseeing cryptocurrency regulation at the New York Department of Financial Services, has established himself as an uncommon figure in the crypto venture ecosystem by launching his own fund rather than pivoting into traditional legal or advisory roles. His newly formed venture firm, Department of XYZ, closed its initial fundraising round at $5.1 million, securing backing from a notably distinguished set of limited partners that reflects both regulatory credibility and deep industry connectivity.
The fund's investor base highlights the convergence of regulatory expertise and crypto market prominence. Limited partners include Robert Leshner, founder of decentralized lending protocol Compound; Kyle Samani, partner at Multicoin Capital; and the Winklevoss twins. These investors are structured not merely as capital providers but as active advisors to portfolio companies, a configuration that underscores the fund's strategic positioning around regulatory guidance and institutional legitimacy.
Homer's approach deliberately differentiates Department of XYZ from conventional venture models. Rather than competing on capital deployment size, the fund emphasizes advisory capacity on regulatory matters—a niche Homer identified as underserved in crypto venture markets. "There's no one that is really owning the regulatory lane," Homer stated in comments to Fortune, emphasizing that the firm will function as an accessible regulatory resource for portfolio startups rather than as a primary capital source. This positioning aligns with the presence of former regulators from multiple government agencies on the fund's cap table in advisory capacities.
Homer's trajectory from government regulator to venture founder is comparatively rare in crypto finance. He began his regulatory career at the Federal Deposit Insurance Corporation in 2012, during crypto's nascent phase, before transitioning to policy work at Quovo (later acquired by Plaid). He returned to regulatory supervision when joining DFS in 2019, where he led the research and innovation division until his departure in 2021. Following his exit from DFS, Homer worked at venture firm Nyca Partners before establishing Department of XYZ, a progression that distinguishes him from the more common archetype of former regulators serving as legal counsel or political advisors within crypto enterprises.
The fund's investor base highlights the convergence of regulatory expertise and crypto market prominence. Limited partners include Robert Leshner, founder of decentralized lending protocol Compound; Kyle Samani, partner at Multicoin Capital; and the Winklevoss twins. These investors are structured not merely as capital providers but as active advisors to portfolio companies, a configuration that underscores the fund's strategic positioning around regulatory guidance and institutional legitimacy.
Homer's approach deliberately differentiates Department of XYZ from conventional venture models. Rather than competing on capital deployment size, the fund emphasizes advisory capacity on regulatory matters—a niche Homer identified as underserved in crypto venture markets. "There's no one that is really owning the regulatory lane," Homer stated in comments to Fortune, emphasizing that the firm will function as an accessible regulatory resource for portfolio startups rather than as a primary capital source. This positioning aligns with the presence of former regulators from multiple government agencies on the fund's cap table in advisory capacities.
Homer's trajectory from government regulator to venture founder is comparatively rare in crypto finance. He began his regulatory career at the Federal Deposit Insurance Corporation in 2012, during crypto's nascent phase, before transitioning to policy work at Quovo (later acquired by Plaid). He returned to regulatory supervision when joining DFS in 2019, where he led the research and innovation division until his departure in 2021. Following his exit from DFS, Homer worked at venture firm Nyca Partners before establishing Department of XYZ, a progression that distinguishes him from the more common archetype of former regulators serving as legal counsel or political advisors within crypto enterprises.
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