Tiger Global, Amex Ventures, Visa and PayPal Ventures Invest in Blockchain Intelligence Firm TRM Labs

The Cambrian explosion of interest in digital assets this year has led to record prices for cryptocurrencies and NFTs and skyrocketing valuations of blockchain companies, but also record amounts of capital for companies providing industry a risk management infrastructure against hacking and other illicit activities. Activities.

In today’s latest example, TRM Labs, a San Francisco-based blockchain intelligence service, raised a $ 60 million Series B funding round led by Tiger Global.

Revealed exclusively at Forbes, several financial institutions, including American Express’s Amex Ventures, Visa, Citi Ventures, DRW Venture Capital, Jump Capital, Marshall Wace, Block (formerly Square, Inc.) and PayPal Ventures and new and existing venture capital firms, including B Capital Group, Bessemer Venture Partners, Blockchain Capital, Cap Table Coalition, Castle Island Ventures, Initialized Capital and Operator Partners also participated.

Along with the growing importance of the blockchain analytics industry amid heightened regulatory oversight, some investors also see this bet as an opportunity to tap into the future of the internet, often referred to as Web3. “We have invested in visionary startups developing infrastructure for Web 3 such as FalconX and Abra,” said Margaret Lim, Managing Director of Amex Ventures. Forbes. “Investing in TRM, which is the market leader in building critical infrastructure for risk and compliance, is a natural extension of what we’ve done. “

TRM helps financial institutions and governments investigate crypto fraud, money laundering and other financial crime cases by analyzing blockchain data and integrating it into analysis system applications and APIs statistics (SAS) that allow their clients to filter portfolios and monitor transactions on more than 900,000 assets on 23 different blockchains.

Esteban Castaño, co-founder and CEO of TRM, believes it is this breadth of coverage that positions TRM well against the competition. “Part of the reason we have the success rate that we do and why our customers stay with TRM is because we offer the same capabilities as Elliptic, Chainalysis or CipherTrace,” he says, “but we are monitoring orders of magnitude more assets and more blockchains than traditional solutions.

Indeed, Chainalysis, a New York-based blockchain data company, which in June raised $ 100 million for a valuation of $ 4.2 billion, tracks the flow of funds only through 10 of the main cryptocurrencies in the market. Other competitors named Castaño, CipherTrace, based in Menlo Park, Calif., Which acquired by Mastercard for an undisclosed amount, and London-based Elliptic, which in October also raised $ 60 million from investors, including SoftBank and the venture capital arm of Wells Fargo, cover hundreds of assets but are still lagging behind.

And even though over 90% of crypto trading volume is spread over a handful of major coins like bitcoin and ether, broad asset coverage is an important factor in crime prevention, Castaño notes. For example, last September, the Singapore-based cryptocurrency exchange KuCoin suffered one of the largest crypto hacks, with more than $ 275 million of cryptocurrency stolen (as of November 2020 , 84% of the assets concerned had would have recovered through chain tracking, contract upgrade, and judicial collection). The majority of those funds were held in altcoins like XRP and Litecoin and some of the lesser-known ERC-20 tokens, which hackers then attempted to move and launder.

“Having visibility into the entire crypto ecosystem allows our clients to better manage risk on their platform as well as investigate these attacks, which may include the 10,000th largest token,” said Castaño.

Since launching Y Combinator in 2019, TRM claims to have increased revenue 600% year-over-year and expanded its team, which includes threat financing experts from the FBI, US Secret Service and Europol. and data scientists from Apple, Amazon and Google. , from 4 to 60. According to Castaño, his top clients include FTX.US, the US subsidiary of the FTX crypto-exchange of billionaire Sam Bankman-Fried, the stable coin operator of USDC Circle and several financial institutions. traditional (undisclosed) and government agencies, both in the United States and abroad. With capital raised, TRM plans to continue improving its product line.

With help from Steven Ehrlich for reports

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