Tom Schmidt, a general partner at the prominent venture firm Dragonfly Capital, labelled the startup Nova Markets “huge scammers” on Thursday, sparking a public feud over the project\’s fundraising transparency.
The accusation followed a June 4 announcement from Nova Markets regarding a new funding round, which led Tom Schmidt to question the due diligence of the investors involved. While Tom Schmidt later modified his comments regarding specific venture capital firms, he maintained a hostile stance toward the startup\’s leadership.
The conflict broke out on X after Nova Markets, a perpetuals exchange built on the Hyperliquid blockchain, shared its latest investment milestone. Dragonfly Capital, which closed a $650 million fourth fund in February 2026, is a major player in the industry, giving Tom Schmidt’s critique significant weight.
“Shame on everyone who did this round for not even doing a bare minimum of dd,” Tom Schmidt wrote in his initial post, targeting the entire investor cohort.
The aggressive rhetoric from a established venture partner highlights growing scrutiny over how crypto startups report their backing. As capital flows tighten, investors are increasingly monitoring market confidence and geopolitical shifts to gauge the stability of new projects. This incident suggests that even high-profile funding announcements are no longer immune to public, real-time vetting by competitors.
Tom Schmidt walks back specific accusations against VCs
Exactly 52 minutes after his initial attack, Tom Schmidt walked part of his accusation back in a follow-up post. He explained that he had since learned many of the investor names listed in the announcement represented “legacy relationships” being rolled forward into the new entity rather than new capital injections.
He described the tactic of including old names to imply fresh backing as a “classic bad faith maneuver” by the Nova Markets team.
Tom Schmidt offered apologies to specific firms in this category, including Robot Ventures and Wintermute. However, he did not extend the same courtesy to the full cohort, which featured names such as Cumberland, GSR, Greenfield Capital, hash3xyz, Bodhi Ventures, BigBrainVC, and Kairos Research. He did not retract his “scammers” characterization of the Nova Markets team itself.
The controversy surfaces as the underlying infrastructure for such exchanges sees massive growth. The Defiant reported on June 3 that HIP-3 builder-deployed markets cleared $62 billion in May volume. This massive activity on the Hyperliquid order-matching layer has made the ecosystem a focal point for institutional interest, though the volatility inherent in crypto markets continues to keep many traders focused on long-term support levels.
Founder Tiago Barbosa responds to fraud allegations
Nova Markets founder Tiago Barbosa, posting under his social media handle @tiagobnova, quickly counter-attacked. He suggested that Tom Schmidt was a former backer who had turned into a hostile critic following a disagreement.
Tiago Barbosa characterized the situation as an investor who “talks shit” about a founder and their entire cap table after a fallout, though Tom Schmidt denied that Dragonfly Capital holds an investment in Tiago Barbosa\’s earlier project, Valhalla.
The dispute was further complicated by claims from a pseudonymous social media account, @0xNeptun. The account alleged that Tiago Barbosa had previously raised $1.5 million for a project called Valhalla on MegaETH before abandoning it to fund Nova Markets. While @0xNeptun is considered a low-credibility source with fewer than 600 followers, the allegations added fuel to the public debate over the founder\’s history.
Tiago Barbosa directly addressed the claims, stating, “i founded valhalla, the rest is not true.” He confirmed his role in the previous project but denied any abandonment or the misappropriation of funds for his new venture. Despite his rebuttal, neither Tiago Barbosa nor Nova Markets responded to official requests for further comment on the specific terms of their recent funding round.
Nova Markets and the Hyperliquid HIP-3 framework
Nova Markets operates as a specialized perpetuals exchange deployed on the Hyperliquid HIP-3 framework, which launched on mainnet in October 2025. The protocol requires teams to stake 500,000 HYPE tokens to utilize its matching engine. Nova Markets has positioned itself as a venue for “novel markets,” including commodities, pre-IPO company perpetuals, and foreign equity indices that are difficult for centralized exchanges to list.
The native token of the ecosystem, HYPE, recently traded approximately 20% below its all-time high of $75.51, maintaining a market capitalization of around $17 billion. The high stakes involving the Hyperliquid network explain the intensity of the public rift between Tom Schmidt and Tiago Barbosa.
With billions in monthly volume at stake, the reputation of builders and their financial backers remains a primary concern for the broader DeFi community.
As the industry moves forward, this public spat serves as a reminder of the friction between traditional venture capital transparency and the fast-moving world of decentralized finance deployments. Whether Nova Markets can move past the “scammer” label will likely depend on its operational transparency in the coming months.
For now, the exchange continues to operate on an infrastructure that remains one of the most active in the perpetuals sector.