2023 marked one of the strongest years in the history of cryptocurrencies, with the two digital currencies that attract the bulk of trading – Bitcoin and Ethereum – surging by 155% and 90% respectively over the year, pushing the market to a peak value currently estimated at over $2.7 trillion.
Almost a mirror image, it has also been a big year for hackers, cybercriminals, and crypto thieves, whose activity in the market has skyrocketed in recent years.
As the industry developed, attack methods and sophistication of fraud in the cryptographic Wild West also evolved. While in the past, most breaches were based on stealing passwords and crypto keys, today most are based on the use of sophisticated malicious applications, through which accounts are hacked and coins of immense value are withdrawn.
In 2021-2022 alone, the cost of fraud in the blockchain application layer stood at $14 billion – double the cost of fraud damage in the cryptographic key layer.
Proactive System
Blockaid, the crypto security startup founded by Ido Ben Natan (CEO) and Raz Niv (CTO), was the first to develop a proactive system that can identify ‘malicious transactions’ in the crypto world, thus preventing and blocking vulnerabilities in the application layer. The technology developed by the two entrepreneurs essentially provides digital wallets, applications, and smart contracts with immediate protection capability against attacks and malicious transactions, and its implementation enables safer use that can alert if it’s a fraud.
By scanning tens of millions of transactions and detecting hundreds of thousands of malicious events, the product developed by the company prevents, according to them, fraud amounting to about $100 million.
Ben Natan and Niv founded the startup just two years ago, and today it employs about 25 workers, mostly in Israel.
In the past year, despite challenging market conditions, they managed to raise $33 million in two rounds from leading funds – $6 million in a seed round led by Cyberstarts; and an additional $27 million raise in an A round led by Reddit and Variant funds.
Early Difficulties
“Our path was accompanied by skepticism and dismissal from our environment that stemmed from the fact that we embarked on this journey at a very young age and without prior experience. Even though we knew then that we had the required abilities, the feedback almost led us to complete despair – including almost giving up on the dream,” the two recall the difficulties at the beginning of the journey.
“We received support from investors and customers who proved to us that it was the right decision. It was precisely that dismissal and lack of belief that made us promise ourselves to support enthusiastic young people with a dream, and never let others feel the feelings we experienced”, they emphasize.
The reward in the end is definitely worth the effort, they describe: “In our eyes, it’s a privilege to solve a substantial problem in the world using technology, alongside super talented people – this is basically the reason we wake up with a smile in the morning. The sharp transition, from two people with a dream sitting in a room to a complete system that works, builds a product and provides great value – causes an enormous sense of satisfaction”.
