Crypto startup Proven has raised $15.8 million in a seed round to develop a zero-knowledge proof of solvency technology for crypto exchanges, custodians, stablecoins, and asset managers. The technology enables these firms to verify their financial health to regulators, lenders, and customers.
Zero-knowledge (zk) proof is a process where one party (prover) uses an algorithm to prove to another party (verifier) that a piece of information is correct without adding or removing anything from the fact. A data’s authenticity can also be verified without revealing any details.
Proven Nets $15.8M in Seed Funding
Crypto-focused venture capital Framework Ventures led the $15.8 million seed funding for Proven. Other investors include angel investors Ada Yeo and Roger Chen, and entrepreneur Balaji Srinivasan.
Unlike proof-of-reserve audits released by crypto exchanges that show only assets under management, Proven seeks to show the public the assets and liabilities of a crypto custodian to the public without revealing sensitive data such as the company’s balance sheet.
Proven bolsters transparency and trust between crypto custodians and investors by featuring daily checks on companies’ proof of solvency.
Why Proven?
Richard Dewey, the co-founder of Proven, reiterated the company’s importance when he said:
“The last few months have highlighted an issue that has long plagued both traditional financial and digital asset firms – efficiently fostering trust with customers while maintaining a necessary level of privacy. The absence of this has led to significant distrust and, of course, contagion.”
Zero-knowledge proof-of-solvency technology is much needed after a severe bloodbath plagued the entire crypto market as big market players fell. The infamous crypto derivatives exchange FTX is a leading example, as it swept billions from the crypto market. Other firms that broke users’ trust are crypto lender Celsius and hedge fund 3AC.
Among Proven’s first-known customers are crypto clients such as the crypto-affiliated companies CoinList and M11 Credit. Other clients include crypto exchange Bitso and stablecoin issuer TrueUSD.
Meanwhile, the best effort made by crypto firms to promote transparency is to release proof-of-reserve audits. Crypto custodians like Binance, OKX, CryptoCom, Kraken, and others have shown a healthy reserve for assets such as Bitcoin and Ethereum.
