Yesterday Coinfirm, a London-based digital asset compliance startup, announced the completion of a Series A funding round raising $8 million. The investment was co-led by the Swiss stock exchange subsidiary SIX Fintech Ventures and FiveT Fintech, with MiddleGame Ventures, Mission Gate and CoinShares participating as additional investors.
The fintech startup is best known for its AML risk management platform for cryptocurrencies. It uses blockchain analytics to help customers manage counterparty risk and create audit trails for their transactions.
Demand for Coinfirm’s products is only increasing with the growth of the cryptocurrency sector. Its monthly recurring revenue grew 70% in the first half of 2021. Despite all the transparency and traceability associated with blockchain, there are risks because transactions are pseudonymous. The flurry of customers entering the market raises the possibility of illicit activity such as money laundering and ransomware.
This is where crypto compliance solutions come into play. The Series A investment will mainly be used to expand Coinfirm’s offering into the Asian and U.S. markets. The sector is attracting considerable attention re crypto asset regulation, including during a Senate Banking Committee hearing this Tuesday.
“The Series A unlocks Coinfirm’s potential in the crypto compliance and analytics space as we expand in a fast-paced growth market,” said Dr Mircea Mihaescu, Coinfirm’s newly appointed CEO.
Mihaescu is a Canadian venture capitalist who spent eight years in innovation at IBM a decade ago.
Coinfirm is seeing a surge in demand amongst financial institutions and government agencies. It will direct a portion of the funding to strengthening and diversifying its current product offering to enterprises and financial institutions alongside its crypto market participants.
Meanwhile, a lot has been happening elsewhere in the digital asset compliance sector. Last week, Mastercard announced the acquisition of Ciphertrace, a competitor to Coinfirm. The startup provides intelligence on blockchain wallets and cryptocurrency firms and secured $27.1 million for its Series B, according to an SEC filing. Other competitors to raise funding recently include Chainalysis that secured $100 million at a $4.2 billion valuation and TRM Labs, which raised $14 million.