New York— August 9, 2022 — Merkle Science, the predictive crypto risk and intelligence platform, announced an extension of more than $19 million to its Series A funding round, bringing the total raised to over $24 million. BECO Capital, Susquehanna affiliate (Darrow Holdings), and K3 Ventures co-led the extension, with participation from new investors including Republic Capital, Summer Capital, 500 StartUps APAC and US, Aspen Digital, HashKey Capital, and Coinhako. They were joined by existing investors Kraken Ventures, Digital Currency Group (DCG), Kenetic, Uncorrelated Ventures, Fenbushi Capital, Lucy Gazmararian of Token Bay Capital, and Libertus Capital.
Several key market vectors have converged to drive exponential global demand for the company’s solutions. These include the rapid adoption of blockchain technology across the financial services industry, including on the part of many large institutions; the escalating impact and cost of hacks and exploits, such as the Nomad and the Ronin Bridge exploits; and increased regulatory scrutiny, such as NYDFS’s Virtual Currency Guidance, FINCEN’s Advisory on Illicit Activity Involving Convertible Virtual Currency and the sanctioning of Tornado cash and Blender.io by the US treasury. These developments, together with the government’s enforcement-first approach and enormous penalties recently issued to companies such as Robinhood and BlockFi, have made clear the need for stronger and more widespread compliance, risk management, and forensics solutions in the space.
“We’ve seen over 300% growth over the past year, despite the onset of a severe bear market in crypto and throughout the broader global economy,” said Merkle Science Chief Executive Officer and Co-Founder Mriganka Pattnaik. “Web3 companies, financial institutions, and regulators are continuing to invest heavily in crypto compliance and forensics. Recent high-profile events in the space, including the failure of large companies and massive hacks, are a clear indicator of the need for much more robust risk management, forensics and compliance for digital assets.”
Merkle Science meets this need by providing next-generation crypto threat detection, risk mitigation, investigations, and compliance solutions to financial institutions, crypto businesses, DeFi participants, NFT platforms, and government agencies. Its platform provides cross-chain analytics that allows compliance teams and investigators to conduct analysis seamlessly across multiple blockchains. Merkle Science’s solution suite screens over 3 million digital assets per month and covers cryptocurrencies representing 96% of the current $1.13 trillion crypto market cap. It uses machine-learning to drive transaction monitoring and risk mitigation for AML compliance, offers a crypto forensics tool that tracks stolen funds and enables investigations, enhanced due diligence and entity reporting, and crypto compliance and investigations training.
The new investments will accelerate the company’s global growth and will be used for expansion across the U.S. and Europe, as well as for R&D in emerging segments such as analytics and forensics across NFTs, DeFi, and cryptocurrency bridge protocols.
Dean Carlson, Head of Digital Asset Investments at Susquehanna and Merkle Science Board Member, said Merkle Science’s cutting-edge solutions provide unmatched security, ease of use, and transparency and give compliance officers and investigators from financial institutions the confidence to understand and deal with risks associated with DeFi liquidity pools, bridge protocols, and the broader cryptocurrency ecosystem. Their unique risk mitigation goes beyond blacklists by combining a unique machine-learning approach for attribution and highly customizable behavior-based rules which helps uncover a large amount of risks that were previously undetected. We are thrilled to continue supporting Merkle Science as they grow to become the leading challenger and innovator in the predictive crypto risk and intelligence platform.”
Dany Farha, Co-Founder and Managing Partner at BECO Capital, added: “The blockchain industry and its regulatory landscape is maturing rapidly across the world. We’re seeing a lot of activity in the UAE, where a large number of businesses are relocating to our jurisdiction to benefit from a robust digital assets regulatory regime and ecosystem. Crypto risk mitigation and intelligence solutions form a critical component of this ecosystem. When we evaluated the space, Merkle Science's focus on predictive transaction monitoring, cross-chain analytics and DeFi analytics clearly demonstrated that they have the vision to become a global market leader. We are delighted to support them as they build the next generation of Web3 risk management and forensics solutions.”
Meng Xiong Kuok, Founder and Managing Partner at K3 Ventures, said: “Merkle Science is expanding the definition of blockchain analysis. The company takes a unique approach to new and increasingly complex challenges, such as the growing number of crypto bridge exploits, de-risking DeFi and empowering their customers to prevent increasingly sophisticated and previously undetectable crypto crime. We are excited to support their journey to the peak of the blockchain analytics industry.”
To support its ambitious goals, Merkle Science recently augmented its leadership team, which features talent from Paypal, Luno, Bank of America, the FBI, and the DOJ, with new Chief Revenue Officer Fernando Castellanos - a veteran New York-based sales leader and former Forter VP experienced in scaling high growth organizations.
About Merkle Science
Founded in 2018, Merkle Science is the next-generation predictive cryptocurrency risk and intelligence platform that helps crypto companies, DeFi participants, financial institutions, and government agencies detect, investigate, and prevent illegal activities involving cryptocurrencies. The core team comes from Paypal, Forter, Luno, Bank of America, FBI, and the US DOJ.
Merkle Science’s proprietary Behavioral Rule Engine enables our tools to go beyond blacklists so that compliance teams may fulfill their local KYC and AML obligations and industry players may keep pace with increasingly complex illicit activities.
Merkle Science envisions a world powered by crypto and is creating the infrastructure necessary to ensure the safe and healthy growth of the cryptocurrency industry as it becomes a key pillar of the $22 trillion financial services ecosystem. We enable businesses to scale and mature so that a full range of individuals, entities, and services may transact with crypto safely. For more information on Merkle Science, please visit our website.