2022 was a tough year for the whole industry, but we're ecstatic about the progress we made and can't wait to show you what we have in store for 2023 🥂. After closing a $24 million Series A - bringing our total raised to $27 million - we're heading into 2023 with major product updates, an amazing team, and lots of energy.
As the crypto compliance industry was shaken up, our team was working behind the scenes to provide a deeper understanding of what happened and the impact on the broader space. Take a look at some of our original research:
FTX Collapse Explained- It took Sam Bankman-Fried (SBF) six years of tireless effort to build Alameda and FTX from the ground up, but it took mere weeks for it all to crumble. The collapse of the crypto exchange FTX and its subsequent bankruptcy filing underscores the dire need for robust digital asset risk compliance. Recent reports suggest that SBF will enter a plea deal, potentially leading to further market turbulence as the full extent of the fraud scheme is unveiled.
Understanding Proof of Reserves - Proof of Reserve (PoR) is an attempt to provide public transparency to centralized cryptocurrency reserves through a verifiable auditing practice. To prove that they have the reserves to cover all customer deposits, many exchanges such as Huobi, Binance, Crypto.com, Deribit, KuCoin, OkxKraken, and BitMEX, are now using PoR. Time will tell whether this approach will succeed, as Binance’s PoR auditor Mazars recently paused all work for its crypto clients due to concerns regarding the way these reports are understood by the public.
The Ethereum Merge - The Ethereum merge was perhaps the most transformative upgrade since its inception. The Merge was a transition from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism which has large scale impacts on the wider ecosystem.
NFTs have quickly achieved mainstream adoption, and the booming industry reportedly generated over $23 billion in trading volume in 2021, compared to just $94.9 million in the year prior. Read our recent report where we demystify NFTs and the importance of token standards.
Our team has finalized a report that sheds light on DeFi criminal activity in 2022, the report focuses on smart contract exploits and security breaches. The HackHub report also includes an analysis of attack vectors and key techniques, the vulnerabilities that led to the exploits, and some mitigation strategies that could have prevented the loss of billions of dollars of users’ funds to illicit actors.
We were grateful to be featured in the Forbes 100 To Watchlist as we tackle Web3's most complex risk mitigation, compliance, and forensics challenges.
Merkle Science was recognized as one of the world’s most innovative RegTech companies that every financial institution needs to know about in 2023.
Merkle Science was a finalist for the Visa Everywhere Initiative. Visa Everywhere invited a diverse and innovative group of startup founders from North America, Latin America, Central Europe, Middle East and Africa, Europe and Asia Pacific to showcase their payments innovations.
Product Unification - Bridging the core functionality of our platforms by significantly reducing friction and maximizing the discoverability of new features and functionality.
KYBB Revamp - Enhancing our KYBB product with significantly larger coverage, more data elements, and a unified experience.
NFT Analytics (Phase 2) - Expanding asset coverage to ERC-1155 and adding additional collections, enabling alerts for illicit activity, price history, and risk metrics.
Behavioral Analytics - Utilizing on-chain pattern detection to identify and tag potentially illicit activity as early as possible.
Polarys- Merkle Science is uniquely placed to help clients navigate the rapidly evolving regulatory landscape. Before regulatory scope is extended to NFTs,this partnership is in line with our mission to provide an end-to-end solution for businesses looking to safely deploy blockchain-based capabilities.
Stellar- By bringing Compass, a behavior-based transaction monitoring and risk reporting solution, to the Stellar network Merkle Science is also bringing next-generation security to developers and operators building on Stellar.
Hedera- Merkle Science and Hedera partnered to provide enhanced crypto crime prevention, compliance & consumer protection tools to its ecosystem
About us:
Merkle Science provides predictive blockchain risk monitoring to help Web3 companies, financial institutions, and government agencies detect and prevent the illicit use of cryptocurrencies. Our mission is to provide infrastructure to enable the safe and healthy growth of cryptocurrencies. Our unique behavioural analytics and predictive risk models enable the detection of illicit addresses before they appear in databases ensuring effective risk monitoring for DeFi protocols and NFT players.
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