Goldman Sachs Veterans Raise $3 Million to Fight Crypto Manipulation

A U.S.-based crypto surveillance startup led by former Goldman Sachs fintech engineers has just raised $3 million in seed funding.

Provider of a machine learning and artificial intelligence-powered trade surveillance platform for digital assets, announced the news on Wednesday, saying that the funding was led by early-stage investment firm Hanaco Ventures.

Solidus said that crypto exchanges are largely using "Outdated" trading surveillance platforms that may work well with fiat currency, but are not well suited to the 24/7 world of cryptos.

Further, traditional solutions are unable to "Sufficiently accommodate" the crypto market's operational and regulatory needs, Solidus' founder and CEO Asaf Meir claimed.

"Our machine learning-powered surveillance system is able to continuously learn as new patterns emerge and reveal new manipulation schemes or openings for manipulation," said Meir.

Solidus said its web-based surveillance system is already deployed with clients including exchanges, broker-dealers, hedge funds and market makers in Europe, the U.S. and Israel.

The firm also claimed to have already managed to reduce "Trading manipulation false positives by 30 percent" by analyzing trading patterns and flagging anomalies in real-time.

The issue of crypto market manipulation is seen as one that is holding back the entry of institutional investors to the market.

CoinDesk last November that he doesn't see a pathway to a cryptocurrency exchange-traded fund approval until concerns over market manipulation are addressed.

In September, the New York Office of the Attorney General also released a report on cryptocurrency trading platforms, saying that many are vulnerable.