Blockpliance
Setting the Scene
Banks and financial institutions are increasingly realizing the potential of embracing digital currencies as a new revenue stream.
To accept these transactions, banks face stringent legal and regulatory responsibilities to ensure their platforms aren’t misused for illicit activities.
Yet, many institutions lack the sophisticated tools and knowledge needed to evaluate the safety of cryptocurrency transactions.
Plus, high costs and complexities of existing compliance solutions present significant barriers.
This week’s company equips compliance teams with essential tools for safe crypto asset interaction and regulatory adherence.
In a Sentence
Blockpliance is a platform that arms institutions against illicit blockchain transactions.
Platform: By leveraging AI, the product makes it easy for non-crypto native teams to get real-time risk assessment with better accuracy, at lower cost, and with improved efficiency.
Institutions: Compliance is crucial for banks, card issuers, crypto exchanges or institutions, and public sector entities.
Illicit Transactions: Blockpliance’s algorithm detects for money laundering, human trafficking, terrorist financing, ransomware, scams and other criminal activity.
Bulleted Version:
- In the same way an office’s online firewall filters through employees’ emails to detect and alert HR of inappropriate messages, Blockpliance similarly analyzes the movement of digital money to inform compliance officers of suspicious activity.
The Basics
- Headquarters: NYC
- Employee Count: 2 FTEs; 4 PT
- Investors:
HNWIs + Founder’s personal funds
- Funding amount: $125K
- Business model: Enterprise contracts (government and large companies) & SaaS for businesses
- Early traction: Successfully onboarded a government in Latin America, engaged in pilot programs with a state-wide police force and a banking regulator, and partnered with a prominent business
Due Dilligence
WHAT WE LIKE
Market Opportunity: Global financial crime compliance can cost organizations hundreds of billions with the market expected to grow as more institutions adopt complex blockchain-based systems.
Financial Crime: The fight against financial crime is intensifying, with cryptocurrency’s potential to aid human trafficking, terrorist financing, ransomware, scams and other criminal activity.
Blockpliance offers a crucial solution to bolster the advantages of decentralized currencies while controlling their risks.
Cost Effective: Leveraging AI, Blockpliance provides a more affordable solution compared to traditional compliance methods, reducing the need for extensive manual oversight and thus, lowering operational costs for organizations.
POTENTIAL RISKS
Volatility: Blockpliance hinges on the belief that digital currencies will continue to grow and be integrated into the broader financial system despite the asset’s volatility .
Regulatory: As governments and financial bodies worldwide adjust their policies to keep up with the fast pace of digital currency adoption, Blockpliance must continuously adapt its algorithms and methodologies to remain compliant.
Rising costs: While AI provides Blockpliance with a competitive edge, the soaring popularity and development costs of advanced AI technologies, especially Large Language Models, could escalate operational expenses.
Founder Profile
Guillermo Fernandes, CEO: Previously co-founded Opendemic.org, ran banking operations for a multi-family office, and involved with Bitcoin since 2012.
Donald Patterson, CTO: Previously taught AI/ML at Westmont College and has been a Bitcoin programer since 2011.
Comps
Chainalysis: Backed by Accel, Benchmark, Paradigm, Ribbit, and others.
Elliptic: Backed by JP Morgan, Digital Currency Group, Wells Fargo, SoftBank, and others.
TRM Labs: Backed by Thoma Bravo, Goldman Sachs, Citi, Amex, Bessemer, Y Combinator, and others
Ciphertrace: Acquired by Mastercard in 2021
Why Blockpliance
With the potential to revolutionize cryptocurrency transactions by blocking unsafe asset interactions, Blockpliance is set up for success.