PayPal Funds up to $4.2M for TRM Labs Crypto Compliance Startup

TRM Labs, a blockchain analytics startup, which helps financial institutions fight money laundering, prevent fraud and stay in compliance, announced that it secured $4.2 million in an investment round led by PayPal, with participation from other top investors, according to a press release on Nov. 19.

The investment news is real or just a rumor?

Firstly, let’s find out about TRM Labs!

San Francisco-based TRM Labs was originally founded by Esteban Castaño and Rahul Raina in 2017, functioning as a regulatory tech startup with goals of streamlining compliance within the crypto community.

In addition, TRM also focuses on the scalability of the engineering team and brings together experts in machine learning, fraud, and compliance to build a solution that solves the needs of traditional and emerging financial institutions.

As usual, it’s quite easy for financial institutions to calculate the risks of businesses. However, for firms banking cryptocurrency, this job becomes vague. The extra regulatory requirements and money-laundering fears are some of the reasons why banks would rather stay away from crypto-based firms.

Recognizing those concerns, TRM Labs wants to streamline compliance and accelerate the institutional embrace of crypto with clear data. And that’s why a group of big investors has believed and chosen TRM Labs as a partner. Recently the firm has received the backing of approximately $4.2 million in its latest funding round from big name as PayPal.

“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,” TRM Labs co-founder and CEO Esteban Castaño said in an interview.

The group of investors includes Reddit founder Alexis Ohanian’s Initialized Capital, SF stalwart Blockchain Capital and a new strategic partner, PayPal Ventures. 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.

Known that the investment by PayPal makes TRM Labs its second blockchain-based firm to invest in and comes just a month after PayPal withdrew from the Facebook-led Libra Association.

Whether TRM Labs is alone?

There is an opposition here. While competing companies like Chainalysis and Elliptic aim law enforcement support, TRM Labs explains that it will solely focus on the finance sector. This will aid in easing the customer due diligence process as well as adhere to the set regulations while financial firms will be able to use TRM data for risk-scoring their crypto transactions, clients or even partnerships.

“Financial institutions use TRM to risk-score their cryptocurrency-related transactions, customers, or partnerships, helping them to simplify customer due diligence and meet regulatory requirements,” the company said.

That means the startup will evaluate and analyze lots of transactions through millions of blockchains to identify any money-laundering or fraud.

TRM is not alone.

“The TRM team is very well suited to execute on this opportunity. The founders of TRM, Esteban Castaño and Rahul Raina, have deep experience across enterprise software, the blockchain, and product design. We think TRM can significantly accelerate crypto’s adoption by helping issuers and exchanges increase trust by being compliant on Day 1,” Spencer Bogart, a general partner with Blockchain Capital, said.

Maybe you do not know:

  • TRM Labs is funded by 6 investors. Y Combinator and Green D Ventures are the most recent investors.
  • Moreover, TRM Labs is actively using 17 technologies for its website. These include Viewport Meta, IPhone / Mobile Compatible, and SSL by Default.
  • TRM Labs has $2M in estimated revenue annually. TRM Labs competes with BigchainDB, Gospel Technology, and DECENT.

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VK Anderson

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