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ConsenSys-incubated Trustology announces $8 million seed funding

blockchain custody security

Trustology is the first ConsenSys incubated company to announce outside funding since ConsenSys unveiled a belt-tightening last week. Trustology provides security for blockchain keys and targets High Net Worth Individuals and institutions. It supports cryptocurrencies at present but is gearing up in the future to serve major institutions when stock, derivatives and other conventional markets go live on blockchain. The $8 million seed round is led by Two Sigma Ventures with ConsenSys founder Joseph Lubin participating.

One of the challenges with keys is availability versus security. The conventional wisdom is that cold wallets which are offline are the most secure. But that’s neither convenient nor appropriate for stock or derivatives traders. Hence the challenge is to combine high availability (hot wallets) with high security. Trustology’s solution is to store the keys in tamper-proof hardware security modules. Ledger Insights previously wrote about Trustology in-depth.

“We believe that a hot-storage solution with strong security and programmable controls is necessary to develop a larger, institutional trading ecosystem around digital assets,” said Matt Jacobus, Venture Partner at Two Sigma Ventures.

Trustology has a heavyweight team led by CEO Alex Batlin who was previously at UBS and BNY Mellon. He was also a founding member of the Enterprise Ethereum Alliance and the Utility Settlement Coin project which is an institutional stable coin backed by central bank deposits.

Other founding members are from numerous big-name banks including Goldman Sachs, Bank of America Merrill Lynch, Barclays, Deutsche Bank and RBS.

The first product is currently being beta tested. The funds will be used to extend functionality, support other asset classes and international expansion.

“Trustology has developed breakthroughs in key management and is providing support services to clients seeking unparalleled safeguarding for digital assets,” said Joseph Lubin of ConsenSys. “By prioritizing security without the need to sacrifice accessibility, Trustology will serve current digital asset holders and attract new institutional and individual investors to the space.”

ConsenSys matures

Last week Lubin wrote a letter to colleagues outlining his vision of ConsenSys v2. The Ethereum focused blockchain studio has mushroomed to almost 1,100 people and 50 projects. So far Lubin has been the financier from his windfall as a co-founder and backer of Ethereum before and during its Initial Coin Offering (ICO). Today the price of Ether dropped below $100 compared to a peak price of almost $1400. The value declined more than 50% in the last few weeks alone.

Hence, the letter which repositions the emphasis for ConsenSys from experimentation to pragmatism and results. Various reports played the evolution as a negative, but in reality, it’s a very positive step in the right direction. And a sign of ConsenSys maturity.

Trustology is perhaps the first of several projects which might be spun out to receive external funding.