Solidus Labs, a surveillance firm focused on monitoring market manipulation in crypto, has closed a $20 million Series A fundraise.
FTX, Evolution Partners, 645 Ventures and former Commodity Futures Trading Commission (CFTC) chairman Chris Giancarlo all invested in the round. FTX is closing in on a billion dollar raise of its own, according to a recent report by The Block.
Founded in late 2017, Solidus sells monitoring and compliance technology tailored to the digital assets market. Its aim is to help companies in the sector identify and report market manipulation by rogue traders.
“We don’t consume publicly available data, we take the internal financial data of an institution and surveil that to detect manipulation,” Asaf Meir, CEO of Solidus Labs, told The Block.
Part of the proceeds of the Series A round will go towards enhancing Solidus’s “cross-markets surveillance” tools, Meir added, with regulators demanding insights on whether bad actors are manipulating multiple trading venues at the same time.
“Regulators in this space have much more of an appetite to use machine learning and supervised algorithms to detect market abuse,” Meir said.
Solidus last raised money in February 2019, when it bagged $3 million a in seed round led by Hanaco Ventures.
The firm's initial clients were primarily crypto exchanges and OTC desks, but it is now seeing increased demand from decentralized finance (DeFi) operators, non-fungible token (NFT) firms and even central bank digital currency (CBDC) issuers.
Meir, a former Goldman Sachs engineer, said this had translated to a 400% increase in inbound demand in 2020.