Solidus Labs, a U.S- based crypto surveillance startup backed by former Goldman Sachs fintech engineers has managed to raise $3 Million in seed funding. The startup is a provider of machine learning and AI powered trade for digital assets. Further, the funding has been led by investment firm Hanaco Ventures. It also includes Wall Street veterans David Krell, VC firm Global Founders Capital and Norman Sorensen.
The investment will be used for further expanding firm’s prowess in machine learning and engineering. It will also be used for development of marketing and customer service teams and boosting sales.
Solidus CEO Asaf Meir believes that the present exchanges are using obsolete trading surveillance platforms. While such platforms may work perfectly with fiat currency, they are not a perfect fit for round the clock world of cryptocurrency. Moreover, traditional solutions are incompetent when it comes to accommodating crypto market’s operational and regulatory needs.
However, the machine learning-powered surveillance system in Solidus continuously evolves and learns new patterns. This helps it easily reveal plausible manipulation schemes or any such loophole. The system actively responds to things happening rather than acting on a set pattern.
The web-based surveillance systems of Solidus are already in use with several clients.These include broker-dealers, hedge funds, exchanges, market makers in Europe, Israel and US. The firm also claims to have reduced trading manipulation by 30% by analyzing trading patterns and pointing out anomalies in real time.
Lior Prosor, general partner at Hanaco Ventures said that present state of the crypto asset ecosystem requires an overhaul rather than tons of end applications. While regulation and security will make the crypto ecosystem better equipped, it requires apt compliance infrastructure. With market manipulation accounted for holding back investors entry into the cryptocurrency market, it is likely that regulations will pave way for an efficient ecosystem.
Jay Clayton, chairman of the U.S. Securities and Exchange Commission, said last November that he cannot imagine a solid ground for a cryptocurrency exchange-traded fund (ETF) approval, till concerns over market manipulation are resolved. In December two U.S Congressmen introduced a Bill to prevent cryptocurrency manipulation.
Also, in September, the New York Office of the Attorney General released a report on cryptocurrency exchanges and trading platforms. It mentioned that all traders and investors are vulnerable to market manipulation, however this claim has been refuted by many cryptocurrency exchanges.