Bitcoin’s price skyrocketed 150% in 2023, with half of this growth coming in the final months of the year in anticipation of much-awaited ETFs finally being allowed to trade in January. This movement was part of a broader market surge that saw the total market capitalization for cryptocurrencies rise 114% to $1.8 trillion as the industry began to pick itself up from a miserable 2022.
With FTX founder and now convicted felon Sam Bankman-Fried awaiting sentencing, and Binance founder Changpeng Zhao pleading guilty to multiple violations of the Bank Secrecy Act and stepping down from his position as CEO, the industry is turning the page. A key focus now is for responsible stewards to guide it through increased regulatory scrutiny and challenging economic conditions to build more sustainable growth.
This attention is reflected in this year’s crop of crypto and blockchain Fintech 50 listers–infrastructure firms Chainalysis, Fireblocks, and Gauntlet–which have respective focuses on regulatory compliance, security, and the optimization of economic models.
Chainalysis
The blockchain forensics firm uses on-chain data to trace crypto transactions, identifying scams, hacks, fraud and illicit activity involving digital assets. With more than 70% of its business now coming from the public sector, Chainalysis has trained law enforcement officials from around the world. In 2023, it partnered with the Internal Revenue Service’s Criminal Investigation Division to train 70 Ukrainian law enforcement officials on blockchain analytics skills, was used by the Israel’s National Bureau for Counter Terror Planning to identify and seize cryptocurrency from Hezbollah, and partnered with U.S. local law enforcement agencies to trace payments for illegal fentanyl sales.
Headquarters: New York, New York.
Funding: $535 million from GIC, Paradigm, Accel and others.
Latest valuation: $8.6 billion.
Date of last valuation: May 2022.
Bona fides: Chainalysis has nearly 300 public sector customers in 60 countries around the world, up from 200 in 50 countries in 2022.
Cofounders: CEO Michael Gronager, 53, a PhD in quantum mechanics who cofounded cryptocurrency exchange Kraken before leaving in 2015 to launch Chainalysis; chief strategy officer Jonathan Levin, 33.
Fireblocks
Its software helps investors, as well as institutions like BNY Mellon, BNP Paribas and eToro hold cryptocurrencies securely. In 2023, it also ramped up its business of turning traditional finance assets into tokens (something called tokenization) to help settle transactions faster and at a lower cost. One of these projects tokenized the $15 billion a year Israeli government debt market. (Fireblocks predicts that $1 trillion in bond assets world wide will be on the blockchain by 2028.) The firm also works with 10 banks to enable their stablecoin business and has 25 additional banks on its pipeline.
Headquarters: New York, New York.
Funding: $1.0 billion from Spark Capital, Cyberstarts, Coatue and others.
Latest valuation: $8 billion.
Date of last valuation: January 2022.
Bona fides: Since its founding, its infrastructure has supported 170 million wallets and more than $4 trillion in trades.
Cofounders: CEO Michael Shaulov, 41, who previously founded cyber security startup Lacoon Mobile Security; chief technology officer Pavel Berengoltz, 47; chief product officer Idan Ofrat, 42.
Gauntlet
Aims to help decentralized finance exchanges (such as Uniswap
UNI
and Arbitrum
ARB
) to manage risk, while optimizing profitability. The firm’s premier service, Gauntlet Risk for Defi Protocols, has tools for real-time transaction risk monitoring at decentralized autonomous organizations (DAOs). Even during the “crypto winter” of 2023, Gauntlet was able to grow its customer base to 36 major blockchains, up from 29 in 2022. Of 14 mid-sized and large protocols, nine are clients.
Headquarters: New York, New York.
Funding: $45 million from Ribbit, Paradigm, and First Round.
Latest valuation: $1 billion.
Date of last valuation: March 2022.
Bona fides: Helps protect a total of more than $9 billion in clients’ protocol assets.
Cofounders: CEO Tarun Chitra, 35, Chief Technology Officer Rei Chiang, 37, and Chief Operating Officer John Morrow, 36.