Goldman Sachs Fight Crypto Manipulation By Raising $3M
A U.S.-based cryptocurrency surveillance company was successful in raising around $3 million in seed funding. The startup, in particular, is being led by former Goldman Sachs fintech engineers.
Introducing Solidus Labs
Solidus Labs is known for being a provider of machine learning and artificial intelligence-based trade surveillance platform, which is specifically designed for digital currencies. Revealing the news on Wednesday, the company said that the funding was spearheaded by an early-stage investment company called Hanaco Ventures.
Interestingly, there are few big players who have joined. These are none other than VC company Global Founders Capital and Wall Street veterans named Norman Sorensen and David Krell.
The investment is expected to go directly to the expansion of the company’s expertise in the fields of engineering and machine learning. Also, it will help cover the much-needed resources for marketing, sales, and customer service teams. By achieving all of these, the firm is confident that it could improve the platform even better.
Making Crypto Space Better
Solidus Labs stated that cryptocurrency exchanges are mostly using “outdated” trading surveillance systems. Sure, they can be successfully utilized with fiat currency. But as far as digital currencies are concerned, they are far from being suited. Moreover, traditional solutions are proven to be incapable of sufficiently accommodating the cryptocurrency market’s operational and regulatory needs, which is something that the CEO and founder of Solidus named Asaf Meir believes.
According to Meir, their machine learning-powered surveillance system is built for this job. It is capable of continuously learning as new patterns surface and unveils new manipulation schemes or exploits for manipulation. It activates responding as things happen, not simply in a retroactive manner.
The company further added that its very own web-based surveillance system is being deployed with clients including broker-dealers, exchanges, hedge funds, and even market makers. They are reportedly located in the likes of Israel, Europe, and the United States.
Solidus also added that it was successful in significantly reducing trading manipulation false positives and the difference suggests a whopping 30 percent. This is reportedly achieved by simply analyzing different trading patterns and identifying anomalies in real-time.
Crypto Market Manipulation
The issue of digital currency market manipulation is considered a major hindrance to the entry of institutional investors to space. It has also been prompted by many lawmakers and regulators as an issue that needs to be addressed immediately.
The chairman of the U.S. Securities and Exchange Commission named Jay Clayton expressed that he does not necessarily see a clear direction to a crypto exchange-traded fund (ETF) approval. The latter can only be achieved if and only if concerns relating to market manipulation are resolved.