Crypto Fraud Prevention Startup Fire Raises $3.5M

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Fire, a browser extension aimed at preventing crypto fraud, has raised $3.5 million in funding led by the Atomic accelerator, the company told Axios exclusively.

Why it matters: Crypto scams remain a major problem for the industry, with Chainalysis estimating that bad actors earned $5.9 billion in 2022.

How it works: The Chrome extension acts as a real-time check on whether a transaction is about to happen, and what exactly goes to which wallet address.

Background: Serial entrepreneur Kevin Rose was tricked earlier this year into giving away NFTs worth over $1 million. Rose clicked “login” on a seemingly legitimate website that was dropping tokens.

However, by “logging on”, Rose had been tricked into transferring her NFTs to a malicious actor. This is the kind of scam that Fire seeks to prevent by acting as a transaction simulator.

Details: Launched in October, Fire claims to have over 50,000 users, 50% of which are monthly active as of April. The company is currently analyzing wallets based on Ethereum, Polygon, Optimism and Arbitrum.

Fire does not currently generate any revenue, instead viewing its product as a customer acquisition strategy. In the longer term, the company could seek to monetize in the same way as wallet providers like MetaMask: by charging fees on swaps, for example. series of crypto explosions.

Yes, but: Fire is not a one-size-fits-all solution to industry fraud problems. If a user is a victim of phishing and thinks a scammer’s wallet address is a legitimate string of numbers and letters, Fire can’t help them.

“That’s why we’re excited to be the wallet itself. It allows us to have a lot more control and add a lot more simplicity and security for the user,” says Jeff Krantz, CEO of Fire.

Overview: Wallets like MetaMask have become industry staples, but are still difficult to use compared to the traditional banking system. This has given rise to young startups looking to capture market share.

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