CipherTrace is a Menlo Park, California-based blockchain security company. Specifically, the firm develops solutions focused on: cryptocurrency anti-money laundering, crypto forensics, and blockchain threat protection. The blockchain security company was initially funded by the U.S. Department of Homeland Security’s Science and Technology division and DARPA, with backing by venture capital firms. CipherTrace comes during a time when cryptocurrency exchange hacks and heists seem to be a regular occurrence. The industry’s massive growth has outpaced security solutions to protect exchanges, wallets, etc. However, CipherTrace appears to be a potential solution.
The blockchain security company recently announced that it has raised an additional $15 million, which was led by Aspect Ventures. Other major investor participants included Galaxy Digital, Neotribe Ventures, and WestWave Capital. The funds will help CipherTrace to help the company continue to accelerate growth.
Aspect Ventures is a Silicon Valley-based venture capital firm that was founded in 2014. Aspect’s first institutional fund was created in 2015 with assets under management (AUM) of $150 million. The VC firm created a second fund in 2018 with AUM of $200 million. The venture capital firm’s primary areas of focus include cybersecurity, digital health, emerging technologies, “future of work,” and more.
CipherTrace Press Release:
MENLO PARK, Calif.–(BUSINESS WIRE)–Blockchain security company CipherTrace fully emerges onto the world stage with the announcement of major venture capital financing to fund rapid growth. The company has raised $15M in venture capital from top Silicon Valley and New York venture capital firms with deep cybersecurity and crypto asset expertise. The round was led by Aspect Ventures and includes other notable investors such as Galaxy Digital, Neotribe Ventures, and WestWave Capital. Aspect’s Mark Kraynak will join the Board of Directors.
CipherTrace develops cryptocurrency intelligence, anti-money laundering (AML), blockchain analytics and forensics, and compliance solutions. These products are used by government, regulators, law enforcement investigators and auditors to enforce AML laws, combat crime and reduce fraud. Cryptocurrency exchanges also use the platform to comply with AML laws. Banks use CipherTrace to mitigate threats related to customer cryptocurrency activity.
CipherTrace blockchain analytics de-anonymize funds flow by actively gathering millions of data points weekly, and then applying machine learning to its massive data pool to trace flows to legitimate entities as well as criminal enterprises. CipherTrace was founded in 2015 by experienced entrepreneurs from the security and FinTech industries. The team at CipherTrace first began tracking Bitcoin criminal activity in 2011.
“CipherTrace is pleased to announce this strong backing from top-tier investors who share our vision that cryptocurrencies and blockchains need to be secured, regulated, and made safe so that they can scale globally,” said David Jevans, CipherTrace CEO. “Our investors have decades of experience investing in proven teams and technology companies in the Internet security and financial technology industries. CipherTrace will join the ranks of these successful companies.”
Funds to Meet Rapid Growth and Customer Demand
As the emerging leader in cryptocurrency security, intelligence and regulatory compliance, CipherTrace has been growing rapidly and profitably given the unprecedented global demand for its products and services. The company will use the new funds to expand its global reach and extend product functionality.
“Galaxy Digital is a CipherTrace customer and an investor,” said Greg Wasserman, Co-Head of Principal Investments at Galaxy Digital. “Appropriate AML technology is critical for the mainstream adoption of digital assets. Institutional investors are increasingly looking to platforms like CipherTrace to monitor the integrity of transactions with their counterparties.”
“Great blockchain companies will be forged as crypto assets achieve mainstream adoption,” said Mark Kraynak at Aspect Ventures. “We believe security and compliance with anti-money laundering and other financial regulations, as enabled by CipherTrace, will be a key first hurdle to mass adoption.”
“The CipherTrace team executes better than 99% of venture-backed start-ups,” said Aditya Singh of Neotribe. “This successful management team has worked well together at previous startups and has visible operational and scaling advantages over their less-experienced competitors.”
Warren Weiss from WestWave Capital said, “I am pleased to be able to work with this elite team of cybercrime experts. It is exciting to watch them make sense of and navigate this extremely high growth and rapidly evolving global regulatory landscape.”
Tuff Yen of the Seraph Group said, “We backed this management team at IronKey and are confident it their ability to win in this market.”
CipherTrace develops cryptocurrency Anti-Money Laundering, cryptocurrency forensics, and blockchain threat intelligence solutions. Leading exchanges, banks, investigators, regulators and digital asset businesses use CipherTrace to trace transaction flows and comply with regulatory anti-money laundering requirements, fostering trust in the cryptocurrency economy. Its quarterly CipherTrace Cryptocurrency Anti-Money Laundering Report has become an authoritative industry data source. CipherTrace was founded in 2015 by experienced Silicon Valley entrepreneurs with deep expertise in cybersecurity, eCrime, payments, banking, encryption, and virtual currencies. The U.S. Department of Homeland Security (DHS) Science and Technology (S&T) and DARPA initially funded CipherTrace, and it is backed by leading Silicon Valley venture capital investors. Visit www.ciphertrace.com for more information or follow the company on Twitter: @CipherTrace and LinkedIn: CipherTrace.
About Aspect Ventures
Aspect Ventures, a leading venture capital firm in Silicon Valley, was founded in 2014 by two Silicon Valley venture capital veterans. Aspect raised its first institutional fund of $150 million in 2015 and a second investment fund of $200 million in 2018. Aspect invests across a broad array of industries including cybersecurity, future of work, digital health, and several other emerging technology areas. Current portfolio companies include cybersecurity providers ForeScout Technologies (FSCT), Cato Networks, Exabeam, ShieldX, Integris; future of work-focused companies Crew, Gusto, Chime, The Muse and Troops; and digital health startups such as Vida Health, Grokker, and Solv. Artificial intelligence serves as the foundational technological platform for several of Aspect’s investments targeting key verticals, including companies like healthcare data provider Amino, future of work focused companies such as Troops and Qordoba, and autonomous vehicle software provider Mapper. Taken together, the track record of the firm’s investment team includes 12 IPOs, 30 successful acquisitions, multiple billions in public market cap, and over 500 rounds in follow-on capital raised for portfolio companies.
About Galaxy Digital
Galaxy Digital is a diversified, multi-service merchant bank dedicated to the digital assets and blockchain technology industry. Galaxy Digital’s team has extensive experience spanning investing, portfolio management, capital markets, operations, asset management, and blockchain technology. Galaxy Digital currently operates four distinct business lines, which include: Trading, Asset Management, Principal Investments and Advisory Services. Galaxy Digital’s CEO and Founder is Michael Novogratz. The Company is headquartered in New York City, with offices in Tokyo, Hong Kong, the Cayman Islands (registered office) and New Jersey. Additional information about the Company is available on www.galaxydigital.io.