Solidus Labs raises $45M for crypto risk monitoring firm Solidus Labs

Crypto security startup Solidus Labs has raised $45 million in a Series B funding round led by Liberty City Ventures at an undisclosed valuation. The funding will help launch threat intelligence capabilities and build out the research and development team to address use cases specific to decentralized finance (DeFi).

In March, Solidus Labs unveiled Halo, a machine learning-driven crypto-native trade surveillance and market intelligence hub that provides institutional-grade regulatory risk and compliance solutions. Halo is monitoring more than 1 trillion trading events per day in over 150 markets, according to the press release.

The startup was founded in 2018 by Asaf Meir, Praveen Kumar and Chen Arad – a team of former Goldman Sachs (GS) engineers and cybersecurity professionals. SolidusIt has seen a 560% increase in year-over-year revenue growth and 250% growth in the number of clients, a company spokesperson told CoinDesk in an email. The company had 10 employees when it started 2020. It now has close to 100 employees, with the goal to double its headcount in the next year.

More than $1Billion in losses have been caused by blockchain security breaches this year. The losses included $326 million in an exploit of blockchain bridge Wormhole, a $625 million breach of the Ronin Network underlying play-to-earn game Axie infinity and a $182 million loss for the Beanstalk stablecoin protocol.

Solidus established the Crypto Market Integrity Coalition, a group comprising 30 companies that aims to increase safety in the crypto markets. The group comprises Coinbase (COIN), Robinhood, (HOOD), Gemini (GSR), Circle and BitStamp.

Solidus Labs has also been supported by several former regulators. Kathy Kraninger (ex-director of the Consumer Financial Protection Bureau, CFPB), was hired by Solidus Labs last year to be its vice president for regulatory affairs. Angel investors and advisors in the startup include former Commodity Futures Trading Commission (CFTC) Chairman Christopher Giancarlo (aka “Crypto Dad”), who is also a Web 3 regulatory advisor at crypto venture capital fund CoinFund, and former Securities and Exchange Commission (SEC) Commissioner Troy Paredes.

Liberty City Ventures, a startup incubator and venture capital fund with assets in excess of $1.5 billion, is listed by the firm. Avon Ventures is a venture capital fund affiliated to FMR LLC, parent company of Fidelity Investments.

Solidus Labs raised nearly $40 million in the capital last year between two funding rounds.

“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,” said Liberty City Ventures Partner Emil Woods in the press release.

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