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CipherTrace, a security firm that tracks crypto crimes, has closed a $ 27.1 million Series B funding round led by Dan Loebs Third Point Ventures, CoinDesk has learned.
The fundraising was also supported by early investors Neotribe, Acrew Capital and Seraph Group.
A representative from Third Point Ventures, who was given a seat on the CipherTrace board, confirmed its participation in the funding, in an email to CoinDesk. Loebs’ investment firms have now backed three crypto startups, including Bitwise and eToro.
CipherTrace plans to double its operation to 100 people by June 2022 as it attempts to capitalize on the growing crypto intelligence market. He is hardly the only one on the ground. TRM Labs and Chainalysis have raised capital in the past three months, Blocktrace unveiled a new software product on Monday and Elliptic announced today that it has completed a pilot project with Santander, Spain’s largest bank, to detect activity suspicious.
It’s a good time to be in our space, CipherTrace CEO Dave Jevans told CoinDesk in an interview. He said he had 12 months of regular business with asset recovery and insurance companies, and would then turn to banks. We were seeing a lot of growth in pretty much everything we do now.
CipherTrace sells compliance tools to crypto exchanges, government investigators, and banks. It compiles information about portfolios to help organizations track transactions, but does not share data about individuals.
Jevans said it was up to the courts to unmask individual wallet holders; his company is simply helping investigators get from point A to point B.
One of CipherTrace’s recent strategies has been the deployment of specialized intelligence software. It launched a sanctions compliance platform for decentralized finance (DeFi) projects in April, as the market for tools used to comply with the Financial Action Task Force’s travel rule really heats up, said Jevans. The global financial watchdog announced rules in 2019 to combat the use of cryptocurrencies in money laundering and terrorist financing.
Another target area has been privacy coins. CipherTrace claims that it can sometimes break the veil of secrecy from monero, a cryptocurrency that has been used by criminals. Jevan said that while his team is supportive of the monero project, he insisted that the privacy coin is doomed to fail without some degree of oversight and noted that the blockchain’s tracking and compliance tools are necessary if the cryptocurrency is to thrive.
We weren’t going to attract the next billion people to the market without these tools, he said.
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