(Bloomberg) -- Predictive blockchain analytics firm Merkle Science, which is expanding in the U.S., said it completed an initial fundraising round and named Susquehanna International Group's head of digital assets investment to its board.
Merkle -- which helps crypto companies, financial institutions and government entities detect, investigate, and prevent illegal activities involving cryptocurrencies -- sees the emergence of decentralized finance or DeFi and increased institutionalization as major opportunities for growth, co-founder and Chief Executive Officer Mriganka Pattnaik said in an email. Implementation of the Financial Action Task Force (FATF) Travel Rule, which is meant to prevent money laundering, is also such an area, he added.
“We are seeing strong demand especially from fintech, financial institutions, payment processors, and law enforcement agencies for compliance and forensics tools as there is mainstream adoption of cryptocurrencies,” Pattnaik said. “We continue to evolve our current offerings to stay abreast of ever-changing crypto criminal activity.”
Merkle, based in Singapore, has closed a $5.75 million Series A funding round led by Darrow Holdings, according to a statement Tuesday. Other investors in the round include Kraken Ventures, Bain-backed Uncorrelated Ventures, Fenbushi Capital, Token Bay Capital, Kenetic and Lunex Ventures.
In addition, Head of Digital Asset Investments at Susquehanna, Dean Carlson has joined Merkle's board, citing Merkle's solutions for compliance with anti-money-laundering and know-your-customer regulations that he sees as a barrier to institutional adoption of DeFi.
Merkle's solution to minimize that counterparty risk “will provide the necessary control to institutions and allow them to participate on and contribute to the evolution of these platforms,” he said.
Merkle launched in the U.S. only a couple of weeks ago, but it's already getting some traction, according to newly appointed Chief Legal Officer Mary Beth Buchanan.
“While there are existing U.S. incumbents, the market has reacted very well to our behavioral analytics and rule engine and there is a clear appetite for advanced tools,” Buchanan said via email.
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