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Cryptocurrency compliance startup TRM Labs, which emerged from YCombinator, raises $4.2 Million in funding from various investors including Paypal Ventures.
A San Francisco -based startup TRM Labs, which emerged from YCombinator and looks at blockchain analysis as a tool for the ensuring of compliance, has received $4.2 Million in funding from various investors that included PayPal Ventures.
The big problem with compliance for cryptocurrencies and blockchain technology is that most banks and financial institutions would rather not deal with the intricacies and the technological hoops which they would have to leap through before they get a clear direction of thorny issues that usually affect compliance at this stage of things.
As such, this avoidance creates a situation where anybody can do anything and get away with it without the financial institutions knowing what exactly they want to do about it; enter TRM Labs.
Esteban Castaño who is the CEO and Co-founder of the startup said:
“Many might consider this the unsexy plumbing of the financial system but it’s what allows [the crypto space] to thrive.”
“We’re helping financial institutions to think through crypto’s potential as well as to mitigate any of the associated risks.”
The investors in this round of funding include many technology venture capitalists ranging from Initialized Capital owned by Alex Ohanian, Blockchain Capital and in a surprise turn of events PayPal Ventures. This brings the total amount raised by TRM Labs to about $5.9 Million. TRM Labs was founded in 2018 and it works with financial institutions to enable them to analyze the blockchain-based transactions for potential risky transactions that may have suspicious origin or can’t be rationally explained.
This, of course, has created a boost for the blockchain and cryptocurrency communities as further adoption will now ensure that some clarity is brought to the crypto space by startups such as TRM Labs. TRM Labs indicated in a statement:
“Financial institutions use TRM to risk-score their cryptocurrency-related transactions, customers, or partnerships, helping them to simplify customer due diligence and meet regulatory requirements.”
This, of course, points to the ability of the organization to be able to analyze billions of blockchain transactions for suspicious transactions that are related to fraud or money laundering. At present, the startup looks through about one dozed blockchains which enables it to check for such activities.
Before now, the preponderance of fraud and suspicious transactions and the potential for such to occur has been the bane of worry for many regulators. The emergence of startups such as Chainalysis, Elliptic (both of which work with Law Enforcement) and now TRM Labs indicates that the crypto space is starting to become what many have wanted it to be for so long: transparent.
How this plays out in the long term remains yet to be seen but the emergence of such startups will change the blockchain and cryptocurrency game in ways that we can never believe.