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Creating a Supportive Environment for Technology

Behind the newly established investment fund, Masterkey VC, which focuses on startups in the realms of crypto, blockchain, and Web 3.0, stand five executives, each an expert in a different aspect of the crypto universe. In a collective interview, they discuss the immense potential within these areas and highlight Israel's strengths as a global knowledge hub and a vibrant center for numerous communities in the field

Yoel Tzafrir, in collaboration with ICBW3. 03 September 2023

Shauli Rejwan
Shauli Rejwan | Photo: PR

Back in 2016-2017, when 'crypto' and 'blockchain' sounded more like terms from astrophysics used to describe the far reaches of space, five entrepreneurs united to explore ways to advance crypto projects in Israel. Fast forward six to seven years, and their early concepts have transformed into concrete actions. These five experts, now friends, are launching an investment fund named Masterkey VC, targeting startups in crypto, blockchain, and Web 3.0.


The quintet, deeply immersed in crypto and blockchain, are founders of various crypto communities and share a firm belief in the transformative power of technology to reshape society. Their vision encompasses the use of complex mathematical tools, encryption models, and secure communication. They are particularly enthusiastic about the real-world applications of this technology, notably decentralized currencies.


Shauli Rejwan, the managing partner of Masterkey and a key figure in Israel's crypto scene, reflects on the fund's inception two years ago. 'At the time, there was a lot of excitement around crypto. Bitcoin was at its zenith, and crypto was hailed as indispensable for nearly everything,' Rejwan recalls. 'Now, we're navigating through what's termed the "Crypto Winter," with crypto losing its luster to the new darling, artificial intelligence. Yet, I view these shifts as 'innovation cycles.' In a few months, the spotlight might shift to quantum computing or another domain emerging as the next big thing. But I'm confident crypto will make a strong comeback, and that resurgence is just around the corner.

What are the fundamentals behind the establishment of the Masterkey Foundation?

Every process in the world is executed using the engineering tools that are current and accepted at the time. We back companies that are pioneering new engineering tools, capable of fundamentally transforming processes from the ground up - specifically, infrastructure technologies. Israelis were instrumental in developing the infrastructure of the traditional Internet, and there's no reason we can't lead the charge for future generations as well. Israel is ripe with entrepreneurial potential, and we have the expertise to help realize it. Over the years, we've developed a unique model tailored for the crypto and blockchain sectors. Today, we operate both an investment branch and a foundry for nurturing projects from the earliest stages.

The transition of the institutional financial sector to cryptocurrency

The macro-global situation impacting the crypto and blockchain realms hasn’t escaped the attention of Emmanuel Benhamou, a partner at the fund. Residing in California, Benhamou boasts a distinguished career spanning investment, fundraising, marketing, and strategic communication consulting in both the USA and Israel. He's also an active member of the Ethical AI Governance Group, which explores the nexus between ethics and artificial intelligence—a field with significant implications for the crypto and blockchain industries.

'Looking at the current global economic climate, we're facing a recession. The conflict in Ukraine, the US-China trade tensions, the commercial real estate downturn, supply chain disruptions, inflationary pressures, and rising interest rates have all impacted entrepreneurial ventures globally, not just in the U.S. However, taking a step back to view the broader tech economy, we’ve seen Bitcoin's value nearly double this year. Furthermore, major financial institutions like Blackrock, Fidelity, Schwab, among others, are indicating a significant shift towards cryptocurrency in the institutional financial sector.

Why is that?

"The major funds have grasped the vision after years of research and fully understand it. Even amidst regulatory uncertainties, they're diving into the field with full force. This not only signals to others and potential issuers the existence of trillions of dollars at play but also sets a timeline for these developments. I believe this shift will materialize in the first to third quarter of 2024. In the meantime, we're witnessing a significant accumulation of bitcoins on their end."

I suppose the optimism is also rooted in a strong belief in the sector

"We all ventured into this field driven by our belief in its potential and the fairness it promises. We see it as being at a stage akin to the early years of the Internet—brimming with immense potential and the power to revolutionize every industry. Just as the shift to the Internet sparked a revolution in communication, information, and digitization, I believe blockchain will ignite a revolution in the tokenization of value and ownership. This shift is poised to greatly benefit humanity, ushering in the democratization of the financial world."

Develop a regulatory framework for the industry

"Besides global concerns, the field faced a significant setback last fall with the collapse of the major crypto exchange FTX. In fact, last year saw numerous failures, impacting many significant players in the sector. 'The tension between the industry and regulators is no secret, necessitating a reevaluation and modification of many laws,' Dan Spuller, a partner in the fund, points out. Spuller, based in Washington, D.C., USA, holds a position as a director at the American Blockchain Association and also works with the North Carolina Department of Commerce and the Office of the Federal Banking Commissioner. 'Such challenges are typical for any emerging technology, as history has shown. It was an inevitable phase that weeded out many problematic entities. Initially, this situation caused concern among US policymakers, but we’re now observing a significant de-escalation. Regulators have identified the initially problematic entities that exploited the market's gray areas. Currently, there’s a unified effort, notably in the US but also in Europe and beyond, to develop a regulatory framework that will both oversee and foster the industry’s growth."

"Over the past decade, despite the regulatory vacuum, numerous remarkable companies have emerged, and now, most of the major players are eager to collaborate and do things correctly," he continues. "I believe that many countries globally are observing the US to see how it navigates this situation. Regulators have come to realize that this technology isn’t going anywhere. Rather than attempting to prohibit its use, they are now focused on establishing proper security measures to ensure the sector's prosperity.

Jerome Powell, a Governor of the US Federal Reserve, recently highlighted the 'staying power' of cryptocurrencies during a debate in Washington. His acknowledgment represents a significant shift, as such a statement would have been unlikely a few years ago."

Developing new cryptographic tools

"Israel holds a distinguished place within the global landscape, partly due to its formidable research and development capabilities foundational to blockchain and crypto. 'Israel is a global leader in computer science, particularly in cryptography. We're seeing groundbreaking inventions, with many projects being spearheaded by Israeli researchers,' notes Udi Peled, a cryptography expert and leading partner at the Foundation. Before joining the Foundation, Peled led the cryptographic research department at FireBlocks, one of the largest startups in the domain, following his doctoral research at Tel Aviv University.

Peled underscores, 'It's no coincidence that Israel stands at the forefront of computer science and cryptography. The synergy between young military veterans specializing in cyber and cryptography and the academic community fosters cutting-edge research. The blockchain sector, historically receptive to innovation, is now exploring new technological applications. Many blockchain enterprises are experimenting with and implementing intriguing tools that enhance privacy, increase speed, manage larger data volumes, enable multi-party computations, and bolster fund security."

What motivates you?

"My drive is rooted in technology. I joined FireBlocks the moment the founders expressed their intention to integrate cutting-edge cryptography into the blockchain realm. Now, with the Masterkey Foundation, my ambition is to broaden that scope significantly—to explore a wider array of cryptographic tools and innovations and to contribute to the development of all these advancements."

Building communities, sharing knowledge

A key player in the community is Ady Shimony, a seasoned software developer with years of experience in digital wallet development. At the foundation, he serves as a leading partner in research and technology. Shimony uniquely bridges the technical with the social, actively participating in various communities that contribute to the diverse mosaic of Israel's blockchain and crypto community.

Ady Shimony
Ady Shimony | Photo: Private


What role do communities play in advancing the blockchain and cryptocurrency sectors?

"Our team champions several leading communities in Israel, supporting not only our own companies but also others in the sector. We adopt a unique approach, believing there's enough room for everyone to succeed with quality as our main competitive edge. We aim to elevate the industry by sharing top-tier knowledge and best practices, fostering growth for all involved. In Israel, tech meetups occur almost daily, most of which are free, facilitating a collaborative environment where ideas are freely exchanged and refined. This spirit of mutual support is quintessentially Israeli. I firmly believe in the future of crypto. Mark my words, Bitcoin represents one of the greatest and most pivotal inventions of our era; it's a true game-changer for the world."

In collaboration with ICBW3.


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