05.16.2022

Crypto Market Integrity and Risk Monitoring Firm Raises $45m

05.16.2022
Stefan Hendrickx, Ancoa

Crypto-native market integrity and risk monitoring leader Solidus Labs announced it has secured a $45 million Series B funding round, led by Liberty City Ventures. Additional funds participating in the round include Evolution Equity Partners which led Solidus’ A-series funding in May 2021, Declaration Partners, Hanaco Ventures, and Avon Ventures, a venture capital fund affiliated with FMR LLC, the parent company of Fidelity Investments.

The round also includes angel investor Brian Brooks, former U.S. Acting Comptroller of the Currency, as well as Plural Ventures, a venture community including among its members former CFTC Chairman Christopher Giancarlo and former CFTC Chief Innovation Officer Daniel Gorfine, who both invested in Solidus’ A round, and former New York State Department of Financial Services Executive Deputy Superintendent Matthew Homer.

The announcement comes on the backdrop of record breaking crypto and DeFi adoption – with some estimates placing total value locked (TVL) in DeFi at more than $200 billion in the beginning of 2022 – but also record breaking fraud, manipulation and market abuse. Solidus Labs, named by Citigroup as category-definer for crypto market surveillance, has been the first company to focus on addressing crypto market integrity since the industry’s early days. In light of mounting regulatory and public pressure to protect users and investors and improve market integrity standards and investor protection in digital asset markets, Solidus reports massive demand for its solutions, and has more than quadrupled its team since the beginning of 2021.

In March 2022, the firm unveiled its all-in-one crypto-native risk monitoring suite – titled HALO – built from the ground up to address the new challenges presented by crypto and DeFi and enable institutional and mainstream adoption. HALO currently services dozens of leading crypto and DeFi platforms, financial institutions and regulators, monitoring more than 1 trillion trading events per day in more than 150 markets and protecting upwards of 25 million crypto market participants and investors. The platform deploys over 50 different proprietary market abuse typologies, shielding investors and safeguarding crypto businesses from new threats unique to the crypto and decentralized finance space.

Setting the standards for the future of financial markets, in February 2022, Solidus initiated the launch of the Crypto Market Integrity Coalition (CMIC) – a group of 30 leading firms – including Coinbase, Robinhood, Gemini, GSR, Circle and BitStamp – pledging to prevent market manipulation and advance safe crypto markets. In December 2021, Solidus Labs hosted crypto risk and compliance leaders for a fireside chat on crypto regulation with SEC Chair Gary Gensler and former Chair Jay Clayton, as part of the firm’s Digital Asset Compliance and Market Integrity (DACOM) Summit series.

As a leader of industry-regulator dialogue, in July 2021 the firm hired ex-CFPB Director Kathy Kraninger as VP Regulatory Affairs. Solidus’ investors and advisors include senior former financial regulators like former CFTC Chairman Christopher Giancarlo, former SEC Commissioner Troy Paredes, and leading entrepreneurs including StarCompliance Founder Marc Epstein, International Securities Exchange Founder David Krell, and AngelList Founder Naval Ravikant.

“For Web3 and the DeFi economy to truly fulfill their massive potential, there’s a need to mitigate new risks – both in terms of liquidity enablement and on the consumer and investor protection side. This is where Solidus’ crypto-native solutions come into play, and the reason we’ve been experiencing a 560% year-over-year revenue increase,” says Asaf Meir, Solidus’ Founder and Chief Executive. “The additional funds will allow us to support the growing cohort of financial institutions looking to expand into the DeFi space, accelerate the deployment of our threat intelligence capabilities, and expand our R&D to solve a fast-growing array of DeFi specific use-cases and needs.”

“How fast crypto and DeFi will be able to grow depends on how effective critical guardrails and checks and balances are – and Solidus is consistently leading the market in providing innovative, crypto-native market integrity solutions,” added Emil Woods, partner at Liberty City Ventures, which invests in leading firms building the infrastructure for crypto markets like Paxos, Lukka, Figment, Fireblocks and Consensys. “Solidus’ experience in traditional finance, combined with years of crypto risk monitoring, formidable regulatory relations and deep understanding of the digital asset and DeFi landscape today makes the company best-positioned to enable the potential, while addressing the evolving risks.”

Source: Solidus

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