Third Point Ventures Leads $27M Investment in CipherTrace

The crypto compliance startup closed its series B round of funding, CoinDesk reports.

Northern California–based CipherTrace closed a $27 million Series B round of funding. The round was led by Third Point Ventures, which also received a seat on the board of the crypto crime–tracking security firm. It’s one of three crypto startups Dan Loeb’s investment firm has backed.

The crypto intelligence market is a fast-growing one, especially for the services CipherTrace offers. The company sells compliance tools to crypto exchanges, banks, and government investigators, and compiles intelligence on wallets to track transactions without sharing data on individuals.

“It’s a good time to be in our space,” CipherTrace CEO Dave Jevans told CoinDesk. “We’re seeing a lot of growth in basically everything we’re doing now.”

CipherTrace also recently launched its sanctions compliance platform for decentralized finance (DeFi) projects. CipherTrace’s timing is especially good, since the market for tools used to comply with the Financial Action Task Force “travel rule” is “really heating up,” as Jevans said.

The intergovernmental agency is targeting the use of cryptocurrencies in money laundering and terrorist funding—exactly where CipherTrace services can help. That includes targeting privacy coins like monero, a cryptocurrency criminals have been drawn to.

It’s CipherTrace’s tools that are helping to shape the future of cryptocurrency—the privacy coin needs blockchain tracing and compliance tools in order to flourish. “We’re not gonna get the next billion people into the market without these tools,” Jevans told CoinDesk.