Solidus Labs has raised $3 million to combat crypto market manipulation, according to a press release shared with Cointelegraph on Feb. 20.
Solidus Labs is a trade surveillance firm whose team includes former Goldman Sachsfintech engineers. The company reports to help both traditional and crypto-focused service providers foster compliance while trading digital assets.
Through the recent funding round, led by Israeli venture capital firm Hanaco Ventures, the team plans to further develop its crypto-oriented market surveillance tools designed for financial institutions and exchanges interacting with crypto assets.
By implementing artificial intelligence (AI) and machine learning technologies, Solidus analyzes trading patterns and detects anomalies in real time, enabling compliance officers to react immediately.
According to the press release, the Solidus Labs software-as-a-service application has managed to reduce trading manipulation false positives by 30 percent to date, which reportedly contributed to improving manipulation detection techniques.
In December 2018, the Social Science Research Network revealed that there are thousands of pump-and-dump trading groups on popular messaging apps. Its study reportedly identified 4,818 pump-and-dump attempts between January and July of 2018, based on data scraped from messaging platforms Telegram and Discord.
Recently, a commissioner at the United States Commodity Futures Trading Commission argued against the Securities and Exchange Commission’s decision to reject a Bitcoin (BTC) exchange-traded fund, claiming that potential crypto market manipulation should not be a barrier to the decision.
The commissioner elaborated that any product with sufficient resources can be manipulated, adding that basing a product on an index, rather than a commodity, can in fact be used to make potential manipulation significantly less likely.