Exclusive: The startup that’s dressing up crypto for Wall Street raises $175 million in a round led by a16z crypto, Paradigm, and Ribbit Capital

Paul Frambot has a message for the “suits” at traditional financial institutions. “I think Trad Fi is going to have to wear shorts,” said the 25-year-old, who was coincidentally wearing a pair of his own. That’s an audacious challenge to Wall Street, but Frambot has reason to be confident. He’s the cofounder of the fast-growing crypto protocol Morpho, which offers blockchain-based lending and borrowing. And he has the backing of some of the largest investors in crypto. On Tuesday, he and his team announced that they had raised $175 million in a funding round led by Paradigm, Ribbit Capital, and Andreessen Horowitz’s digital assets arm, or a16z crypto. Other investors included Apollo Funds, Circle’s venture unit, and VanEck. The investment was for Morpho’s cryptocurrency and valued the protocol at up to $2 billion. (Investors bought at the token’s average monthly price, and the exact cost depended on when participants put in their checks, Frambot said.) “I’m a tech guy, by the way,” he added. “I’m not a finance guy. I don’t know anything about finance. I’m building infrastructure. I’m building code.” Goodbye shorts, hello trousers Morpho’s fundraise comes as crypto, which started as a libertarian industry pioneered by hoodie-wearing developers, is increasingly walking in lockstep with traditional financial institutions. Over the past two years, the New York Stock Exchange’s parent company has invested in the crypto exchange OKX, the asset management giant BlackRock has embraced digital assets ETFs, and banks are exploring how to put customer deposits on blockchains. “I think the folks who live in FiDi and Wall Street maybe have to have casual Fridays,” said Guy Wuollet, general partner at a16z crypto. “And I think people in DeFi are, let’s say, dressing up ever so slightly.” Morpho is a DeFi, or decentralized finance, protocol. Rather than allow one institution to determine whether someone can take out a loan, DeFi lenders cre