In 2018, shocked by a series of refusals by the Securities and Exchange Commission to approve a bitcoin ETF, a group of Goldman Sachs engineers and cybersecurity experts set out to find a way to address the SEC’s concerns about the lack of investor protection in the industry. nascent. Two years later, they launched the market surveillance and risk monitoring company Solidus Labs.
Today, the New York-based outlet announced the closure of a $ 45 million round of Series B funding. Revealed exclusively to Forbes, The investment was led by Liberty City Ventures and was joined by Evolution Equity Partners, Declaration Partners, former U.S. Acting Comptroller Brian Brooks and former CFTC President Christopher Giancarlo.
“If you believe in crypto investing, DeFi, Web 3 will continue to grow, you need to build healthy leads for this industry. That’s exactly what Solidus does,” said Asaf Meir, founder and CEO of Solidus.
The company offers a set of tools, which monitor more than 1 trillion trade events a day and analyze blockchain data for more than 50 different types of security threats, such as the laundering trade, counterfeit transactions and pumping schemes. and download. With dozens of customers, including regulators and cryptographic powers such as Fidelity Digital Assets, FTX.US and dYdX, the company estimates that it now protects some 25 million market participants. More recently, Solidus has helped its customers avoid accepting deposits from hackers who stole an estimated $ 625 million in cryptocurrency from the Ronin Network, an Ethereum-enabled blockchain adapted from the popular Axie Infinity game, notifying them. an anomalous situation. business behavior, according to Meir.
With new funding, Solidus hopes to accelerate the deployment of its intelligence tools and expand its research and development to address a rapidly growing variety of DeFi-specific use cases. This can be especially useful as the cryptocurrency market faces the collapse of a prominent stable currency TerraUST (UST) and its sister token LUNA, which lost 98% of its value yesterday.
Former CFTC President Christopher Giancarlo, who also invested in $ 20 million in Solidus Series A last May and is acting as an informal adviser to the startup, said it was this approach that attracted him to the company. “They’re doing exactly what I asked for when I was in the CFTC. I said it’s time for regulators to do what eBay, Facebook and Amazon do every day: analyze big data sets instead of relying on both intermediaries and licensed parties “, di. “Instead of being reactive, they need to be proactive and can do so if they become quantitative regulators. This notion of quantitative regulation is what Solidus will empower regulators to do.”
While Solidus may appear to be lagging behind in blockchain forensic research, especially alongside nearly a decade-long outlets like Chainalysis and Elliptic, the company has garnered formidable support from past and present regulators. Other prominent advisers include former SEC Commissioner Troy Paredes and new investor Brian Brooks, the currency’s chief financial officer under President Trump, who now runs Bitfury Group’s bitcoin miner. In July 2021, Solidus hired former Director of Consumer Financial Protection Kathy Kraninger as Vice President of Regulatory Affairs. Late last year, the startup also hosted a conversation with SEC President Gary Gensler and former President Jay Clayton as part of the company’s series of digital asset compliance and market integrity (DACOM) summits.
In addition, in February 2022, Solidus launched the Crypto Market Integrity Coalition, which is made up of 30 leading cryptocurrency companies, including Coinbase, Robinhood and Gemini, to improve market surveillance and monitoring standards.
“Crypto isn’t just innovating the way financial markets work,” Meir says. “It will also innovate the way regulation works, and we need to create an open dialogue between market participants to drive standards.”