Investing in Compliance Tools for Blockchain-based Financial Services with TRM Labs

As of December 2021, the market for digital assets has grown to $2.2 trillion as measured by the value of all existing cryptocurrencies. Such a dynamic market is bound to attract attention—not just from entrepreneurs and individual investors, but also from financial institutions and regulators. At Citi, we’re working to understand what the market for digital assets will look like in the future, and how we can be both forward-looking and appropriately cautious in how we choose to engage.

As the digital asset ecosystem grows, regulators are focused on the challenge of adapting existing rules—and in some jurisdictions, designing entirely new ones—to combat money laundering and other financial crimes in this new blockchain-based economy. TRM Labs is an emerging leader that provides risk intelligence to help organizations meet these regulatory requirements. By blending raw blockchain data with advanced analytics, it is creating the informational infrastructure needed to identify and investigate high-risk activity on blockchains, ultimately enabling a safer, more robust digital asset economy.

TRM Labs offers solutions for financial institutions, governments, and crypto-native businesses to monitor blockchain transactions for risk, trace the source and destination of funds, and conduct due diligence on virtual asset service providers. TRM’s technology is purpose-built to monitor dozens of blockchains and can provide unique insights on cross-chain activity. With the ability to monitor over one million unique assets, including non-fungible tokens (NFTs), TRM currently covers more assets and blockchains than any of its competitors. TRM also offers training services at the enterprise level, providing a solution for organizations that want to quickly upskill compliance teams on digital assets, regulation, and new risk management tools and techniques.

TRM is a Y Combinator company co-founded by Esteban Castaño and Rahul Raina. The founders both worked at McKinsey & Company helping organizations scale their engineering teams and define and implement their digital strategies. Castaño, now TRM’s CEO, previously founded the digital team at Generation, a youth-employment program. Raina, now TRM’s CTO, has worked as a software engineer at companies such as Amazon and Opendoor and recently made Forbes’ 30 Under 30 list for Finance . The company is based in San Francisco and currently has 80 employees. Its enterprise customers include fast-growing crypto businesses Circle, FTX, and MoonPay as well as some of the world’s largest fintechs. The team’s primary expertise lies in data generation, engineering, and technology, allowing it to meet evolving client needs in an industry that is changing and growing faster than most.

As the use cases for blockchains expand, TRM’s product relevance will expand in concert—and, we believe, may ultimately extend to the entire financial system. With new digital asset companies being founded every day and financial institutions adding new layers of access and exposure for their clients, TRM’s potential customer base grows daily.

For all these reasons and more, we’re pleased to announce our investment in TRM Labs. We’re joined by lead investor Tiger Global as well as American Express, Visa, DRW, Jump Capital, Marshall Wave, Square, and PayPal.

For more information, email Lizzie Guynn at elizabeth.guynn@citi.com.