Proven, a firm providing zero-knowledge proof technology so that crypto firms can prove solvency, raised a $15.8 million round led by Framework Ventures.
Other investors in the seed funding round included notable angels such as Balaji Srinivasan, Roger Chen, and Ada Yeo, per an announcement.
A ZK proof is a cryptographic technique that confirms whether a statement is true or false without revealing that statement’s contents. While these are often used in crypto for Layer 2 scaling solutions, Proven's so-called "Proof of Solvency" claims to enable firms to show both assets and liabilities without needing to publically disclose their balance sheets.
“The last few months have highlighted an issue that has long plagued both traditional financial and digital asset firms — efficiently fostering trust with customers while maintaining a necessary level of privacy. The absence of this has led to significant distrust and, of course, contagion,” said Proven co-founder Richard Dewey in a statement shared with The Block. He said that it was designed to let customers and regulators have confidence in exchanges and other companies while protecting sensitive customer information.
Since the collapse of crypto exchange FTX in November, other exchanges including Binance, OKX and Crypto.com rushed to show proof of reserves. Those have come under heavy scrutiny by regulators and some auditing firms have even paused all work on such projects.
Proven is likely hoping that it can offer an alternative way of verifying proof of reserves and the seed-stage startup so far counts firms such as Coinlist and Bitso as clients. It's looking to target exchanges, asset managers and custodians as potential customers and will use the funding to expand its developer team.
The firm is just one of a number of ZK startups that have raised funds recently including Ulvetanna, a startup that builds hardware to increase the efficiency of ZK proofs, and the Nil Foundation, a ZK data accessibility developer, which raised at a $220 million valuation. This week, The Block exclusively reported that Scroll, an Ethereum Layer 2 network that uses zk-rollups technology, raised $50 million in a new funding round that saw its valuation soar to $1.8 billion.
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