Solidus Labs, a US-based startup, has raised $3 million in the seed round completed this month, as Forbes reports.
The startup develops machine learning-powered trade surveillance infrastructure designed to monitor and detect market manipulation in blockchain-powered trading. It was founded in 2017 by two former Goldman Sachs engineers – Asaf Meir and Praveen Kumar.
“Digital assets bring new layers of intricacy to trading systems, which means different kinds of data, operational needs, new manipulation schemes, and evolving regulation that legacy surveillance systems are unable to sufficiently accommodate for,” says Meir, the CEO of Solidus.
According to Crunchbase, Global Founders Capital, Hanaco Venture Capital, Norman Sorensen, and David Krell, the co-founder of the International Securities Exchange, have all participated in the seed round.
“Although it might sound clichéd, the digital asset ecosystem is in dire need of good of good ‘pick and shovels’ rather than more end applications. We believe that regulation and security are the major ‘enablers’ in the crypto space and that regulating a market powered by groundbreaking technology requires groundbreaking compliance infrastructure,” said Lior Prosor, general partner at Hanaco Ventures.
Recently, Blockchain Transparency Institute issued a report which notes that around “80% of the CMC (CoinMarketCap) top 25 BTC pairs volume is wash traded”. Thus, it is no surprise that startups similar to Solidus Labs are in a position to raise multi-million figures.
“Our machine learning-powered surveillance system has the power to continuously learn as new patterns emerge and reveal new manipulation schemes or openings for manipulation. It enables responding as things happen rather than retroactively,” added Meir.
By using Solidus’ SaaS web-based dashboard, clients will be able to fight manipulation in a more efficient manner. Market manipulation is highlighted as one of the major concerns by the U.S. Securities and Exchange Commission (SEC) in connection to the approval of a Bitcoin ETF.