TRM Labs Blockchain Analytics Firm Gets $4.2 Million, Led By PayPal, to Enhance Crypto Banking Compliance
While the majority of financial institutions have the know-how in the calculation of risks while attending to the conventional market, they are yet to come up with a model to compute the risk while dealing with cryptos. The extra regulatory requirements coupled with money laundering risks are some of the reasons why banks prefer to stay away from crypto-based firms and traders. However, blockchain analytics firms are looking to change this phenomenon by the provision of data that can enhance crypto compliance.
To achieve its mission, TRM Labs has received the backing of approximately $4.2 million in its latest funding round. The round involved big names in both the crypto and financial sectors such as Initialized Capital owned by Reddit developer Alexis Ohanian, Blockchain Capital as well as PayPal Ventures which will act as a strategic partner. The new investment in the startup means that it has now raised $5.9 million since it rolled out from Combinator at the start of this year, CoinDesk reports.
The investment by PayPal makes TRM Labs its second blockchain-based firm to invest in and comes just days after PayPal announced its withdrawal fro the Libra Association which is being spearheaded by Facebook.
TRM Labs explained that it will solely focus on the finance sector saying that financial firms will be able to use TRM data for risk-scoring their crypto-linked transactions, clients or even partnerships. This will aid in easing the customer due diligence process as well as adhere to the set regulations.
The company will peruse through millions of blockchains evaluating and analyzing lots of transactions to identify any form of money-laundering or fraud.
TRM Labs CEO, Esteban Castaño states,
“Many might consider this the unsexy plumbing of the financial system but it’s what allows [crypto adoption] to thrive,”
“We’re helping financial institutions to think through crypto’s potential as well as to mitigate any of the associated risks.”
While there are other firms offering such services to financial institutions like Chainalysis, Spencer Bogart from Blockchain Capital says,
“The existing providers are trying to tailor products to financial institutions, and we’re just finding they’re not doing a good job of that.”