Solidius Labs, a crypto surveillance startup founded by engineers who previously worked for Goldman Sachs, has raised three million U.S dollars to expand its development of machine learning cryptocurrency trade surveillance.
The startup said that the seed funding round was spearheaded by Hanaco Ventures. Others who chipped in were Norman Sorensen, Global Founders Capital, and David Krell. The amount raised would be used to further develop its platform which uses artificial intelligence and machine learning to monitor trading of virtual assets.
Purpose Of The $3 million
The funds will also be used in acquiring new customers through marketing and enhancing its customer service desk.
According to the startup’s CEO, Asaf Meir:
“Our machine learning-powered surveillance system is able 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.”
For Solidius, the current surveillance solution used by cryptocurrency exchanges needs upgrading since its suited to handle fiat trades but not virtual currency trades which are being conducted around the clock. Additionally, Meir said that the surveillance solutions currently in use do not comply with the regulatory needs of the crypto market.
The crypto surveillance startup claims its technology is already being used in the United States, Israel, and Europe. Its client base includes hedge funds, digital currency exchanges, among others. Those already using their technology, Solidius claims, have recorded a 30 percent reduction in trade manipulation.
Inflation of trading activities on cryptocurrency exchanges has been pointed out as a major stumbling block for institutions who want to invest in cryptocurrencies. It’s also preventing regulators like the United States Securities and Exchange Commission from approving virtual currency exchange-traded funds.
A general partner at Hanaco Ventures, Lior Prosor, noted that:
“Although it might sound clichéd, the digital asset ecosystem is in dire need of good ‘picks and shovels’ rather than more end applications…. Regulation and security are the ultimate ‘enablers’ in this space, and that regulating a market powered by groundbreaking technology requires groundbreaking compliance infrastructure.”