Diem Engineers Built Sui. Now One Runs AI at Mysten.

The Pivot at Mysten Labs

In mid-October 2026, Evan Cheng stepped aside as CEO of Mysten Labs to run a new AI business unit inside the company, handing the chief executive role to Kevin Boon, his president and former chief legal officer. The move wasn't an exit. It redeployed the Diem diaspora, reframing what they've built since regulators killed Meta's stablecoin project in 2022.

Cheng, Sam Blackshear, Adeniyi Abiodun, George Danezis, and Kostas Chalkias founded Mysten Labs in September 2021. They wrote the Move programming language at Meta's Libra/Diem project. They took Move, the parallel execution model, and the object-centric data model designed for a permissioned payments network and shipped Sui, a public Layer 1 that launched mainnet in May 2023. Walrus, their decentralized storage protocol, followed in March 2025. The team never left frontier tech. They changed the substrate.

Cheng's October 16 letter to staff framed the handover as a scope decision. "This makes my scope more manageable," he wrote on X. Boon had been groomed for the role. "I planned for this day when I made him President," Cheng said. The new AI unit will operate with its own engineering, product, and go-to-market functions, mirroring the onchain finance business unit Mysten stood up over the summer. Its mandate: agent-trust products and AI-native infrastructure anchored to Sui and Walrus.

The first concrete artifact is Verifiable Agent Arbiter, announced October 6 and co-developed with Google Cloud. It's an evidence layer that lets enterprises prove an AI agent acted within its granted authority. Detailed agent records stay in customer-controlled Google Cloud Storage; cryptographic proofs land on Walrus and coordinate on Sui. Initial enterprise deployments are planned before broader availability. Cheng says the aim is to let agents carry out tasks autonomously while staying within limits set by their users, echoing the permissioned governance model Diem was built to satisfy.

The hiring data reflects the pivot. Mysten's job board shows three AI-titled roles posted in the past week: an Enterprise Sales Lead, AI, a Product Lead, AI, and a Senior Dealmaker - AI. All remote, all USA. Security and DeFi roles continue to post alongside them; the blockchain engine isn't idling.

Cheng has argued for years that Sui's horizontal scalability and dynamic supply mechanics make it the natural rail for agent commerce. "Stable coins would be the language of money that agents use," he said in a June 2026 technical talk. Payment Intents, a primitive that lets an agent batch multiple API calls with atomic finality, went live on Sui in 2026. Privacy features for stablecoin transfers are slated for the same year. The vision — replacing traditional payments rails with public infrastructure — is the same one the Diem team pursued at Meta. The agents are new.

Boon's ascent signals continuity on the blockchain side. A lawyer by training, he joined Mysten in 2022 as chief legal officer, became president in 2024, and now inherits a company processing significant stablecoin volume on Sui. The AI unit is Cheng's bet that the next major volume wave won't be human-initiated.

The question isn't whether the Diem engineers survived the shutdown. It's whether the infrastructure they built for a permissioned stablecoin can become the settlement layer for autonomous agents, and whether the same team can execute the pivot without fracturing. Aptos, the other major chain founded by Diem alumni, has not shown a comparable internal pivot in the reporting.

Capital Follows Engineers, Not Sectors

Andreessen Horowitz announced a $7.2 billion raise in April 2024 and made the allocation impossible to miss: $1.25 billion for an AI infrastructure fund, $1 billion for AI applications, $3.75 billion for growth, $600 million each for gaming and American Dynamism. Crypto and bio got zero. The firm's blog post framed the split as a response to market maturation — each submarket now as large as the entire venture market when a16z launched in 2009 — but the message to founders was clearer: the capital pool for pure crypto has stopped growing.

The numbers bear that out. The firm's fourth crypto fund, a $4.5 billion vehicle closed in May 2022, brought total crypto commitments to $7.9 billion across four funds. As of early 2024, a16z acknowledged that not all of that capital had been deployed because the crypto market had declined sharply over the prior two years. Meanwhile, the AI infrastructure and apps funds alone represent $2.25 billion of fresh dry powder, more than the gaming and American Dynamism funds combined.

This isn't an isolated pivot. Lightspeed Venture Partners closed a $9 billion fund in late 2025, the largest in its history, explicitly structured around AI: six specialized vehicles including a $3.3 billion opportunity fund to double down on winners. General Catalyst raised $8 billion in 2024 across healthcare, fintech, and AI. Founders Fund secured $4.6 billion in 2025 for growth and deep tech. PitchBook data shows 2025 on track for the fewest VC fund closings in a decade. Concentration is creating a two-tiered market where a handful of firms control historic sums and direct them overwhelmingly toward AI compute, model training, and the infrastructure layer beneath both.

The infrastructure demand signal is unambiguous. Hyperscaler capex hit roughly $700 billion in 2024 and is projected to reach $1 trillion collectively in 2025. GPU supply is booked through 2028. The leading memory vendor says current demand would take three years of capacity to fulfill. Token consumption, the unit of work for AI, is growing at roughly 1,000 percent year over year as workloads shift from chat to reasoning to multi-agent systems. That compute need, investors say, will persist for decades.

Capital at that scale reshapes hiring inside the firms that survived the crypto winter. The reallocation is not a rotation. It is a structural shift: the largest pools of risk capital are moving toward the bottleneck — power, cooling, memory, silicon — and the engineers who know how to build reliable distributed systems are being pulled with it.

The Quiet Exit From Pure Crypto

The withdrawal didn't arrive with a press release. It showed up in volume data first. Bitcoin trading volume in the U.S. dropped 75 percent over two months in early 2023, from $20 billion daily in March to roughly $4 billion by May. Ether spot volume fell to $2 billion a day over the same window. The liquidity providers who made those markets possible were already stepping back.

Jane Street Group and Jump Trading, two of the world's most sophisticated quantitative firms, began scaling back U.S. crypto operations after the 2022 collapses — Terra, Three Arrows Capital, Celsius, Voyager, FTX — and the subsequent failure of crypto-friendly banks Silvergate, Silicon Valley Bank, and Signature. By May 2023, both firms were retreating from U.S. markets due to regulatory pressure. ARK Invest analyst Yassine Elmandjra characterized the pullback as an early market reaction to "insecure regulation." Michael Safai of Dexterity Capital said the departure of firms like Jane Street and Jump Trading "sets the U.S. crypto industry back several years, making the industry volatile and risky." Noelle Acheson of Genesis Global Trading warned the exit would alienate large investors wary of price swings with large orders.

The retreat has only sharpened since. In 2026, Jane Street ceased purchasing and selling physically-settled crypto derivatives on certain U.S. exchanges, a preemptive compliance move. Jump Trading halted market-making in the same products for similar risk-management reasons. Jane Street is also lowering its global cryptocurrency ambitions, while Jump Crypto, the digital assets unit of Jump Trading, pulls back from U.S. markets but still plans international expansion.

The numbers tell a more granular story. In the fourth quarter of 2025, Jane Street held roughly 950,000 shares of Strategy (formerly MicroStrategy), valued at $144.5 million. By early 2026, the firm had slashed roughly 78 percent of that position. Yet the same quarter saw Jane Street channel approximately $82 million into Ether ETFs and increase its stake in Riot Platforms from 5 million to 7.4 million shares. The firm isn't exiting crypto exposure uniformly; it's rotating from direct token proxies toward regulated vehicles and equity in mining infrastructure.

Jump Crypto's own trajectory mirrors the shift. Its Firedancer validator client for Solana, built to improve performance, reliability, and network diversity, remains in a "slow and steady" rollout rather than a full deployment push. The engineering talent that built high-frequency crypto trading systems is being redirected toward infrastructure that serves a broader purpose. Subzero Labs, which emerged from stealth in August 2025 with a $20 million raise, Subzero Labs' announcement put the figure at, led by Pantera Capital and participation from Mysten Labs, is building Rialo, a decentralized programmable network designed for internet-scale applications using RISC-V architecture with Solana VM compatibility. Mysten Labs' participation in that round signals where its founders see the next layer of demand.

The pattern is consistent: firms are not expanding crypto headcount. They are repurposing the engineers who built low-latency trading engines, consensus clients, and cryptographic libraries toward AI infrastructure, agent economies, and regulated financial rails. The hiring screens have already changed. The liquidity that once defined the sector is thinning. The talent that provided it has moved to the next problem.

What the New Hiring Screen Actually Tests

Endor Labs' $93 million Series B, PR Newswire reported, closed in April 2025 and led by DFJ Growth with Salesforce Ventures and Citi Ventures participating, makes the capital side of the signal concrete. The company's platform now protects more than 5 million applications and runs over 1 million scans each week for customers including OpenAI, Rubrik, People.ai, Observe.ai, and Mysten Labs itself. Varun Badhwar, co-founder and CEO, said the raise was proactive ("building for the scale required to secure this AI era") and the numbers back the urgency: 62% of AI-generated solutions contain bugs or security vulnerabilities, and nearly 30% include critical weaknesses. Traditional static analysis tools miss the new attack surface because the developer workstation has become part of the software supply chain. AI coding agents write code, install dependencies, execute commands, and connect to MCP servers with the same credentials as the human beside them.

That surface is where the pressure concentrates. Endor Labs' Package Firewall for VS Code extensions, shipped in September 2026, blocks malicious extensions before they reach the IDE. The product was built after GitHub confirmed roughly 3,800 internal repositories were breached in May 2026 when one employee installed a poisoned VS Code extension. The Nx Console incident proved the vector: a verified publisher with millions of installs pushed one hijacked update that turned the extension into a credential stealer. The GlassWorm worm in October 2025 stole publisher credentials from infected developers and pushed malicious updates to legitimate extensions, reaching roughly 35,800 installs. Extensions behave like dependencies but lack manifests, auto-update by default, and run with the developer's full permissions: SSH keys, cloud tokens, source code.

Remote blockchain security roles show the transition layer. Mysten Labs' own board lists security and DeFi roles alongside the new AI-titled positions, Zero G Talent's board data shows.

The job descriptions still cite DeFi, treasury automation, and enterprise blockchain integrations, but the required tooling now overlaps with AI agent governance. The screen is shifting from "do you know Move?" toward "have you secured a workspace where an autonomous agent installs dependencies at 2 a.m.?"

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