Crypto-security startup Solidus Labs has received $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 expand the R&D team to address specific use cases in decentralized finance (DeFi).
In March, Solidus Labs unveiled HALO, a machine learning-based crypto trading surveillance and market intelligence center that provides institutional-grade regulatory risk and compliance solutions. According to the press release, HALO monitors more than 1 trillion trade events per day across more than 150 markets.
The startup was founded in 2018 by Asaf Meir, Praveen Kumar and Chen Arad - a team of former Goldman Sachs engineers and cybersecurity experts. Solidus has seen 560% year-over-year revenue growth and 250% growth in the number of customers, a company spokesperson told CoinDesk in an email. The company had 10 employees at the start of 2020 and has now grown to nearly 100, with a goal of doubling its headcount within the next year.
Blockchain security breaches and mishaps have caused more than $1 billion in losses so far this year. The losses included $326 million in an exploit of blockchain bridge Wormhole, a $625 million loss on the Ronin Network, which underlies the game Axie infinity, and a $182 million loss for stablecoin protocol Beanstalk.
Earlier this year, Solidus launched the Crypto Market Integrity Coalition (CMIC), a group of 30 companies committed to security in the crypto market. This group includes Coinbase, Robinhood, Gemini, GSR, Circle and BitStamp.
Solidus Labs also has the backing of several former regulators. The startup hired former Consumer Financial Protection Bureau (CFPB) Director Kathy Kraninger as vice president of regulatory affairs last year. Angel investors and advisors to the startup include former Commodity Futures Trading Commission (CFTC) Chairman Christopher Giancarlo (aka "Crypto Dad"), who also serves as a regulatory advisor to crypto venture capital fund CoinFund, and former Securities and Exchange Commission (SEC) Commissioner Troy Paredes.
Liberty City Ventures is a venture capital fund and incubator with more than $1.5 billion in assets under management, according to the company. Other participants in the funding round include Evolution Equity Partners, Declaration Partners, Hanaco Ventures and Avon Ventures, a venture capital fund affiliated with FMR LLC, the parent company of Fidelity Investments.
Solidus Labs raised nearly $40 million in capital in two rounds of funding last year.
"How fast crypto and DeFi can grow depends on how effective critical guardrails and controls are - and Solidus is consistently leading the market in providing innovative crypto market integrity solutions," Emil Woods, partner at Liberty City Ventures, said in the press release.