Coincover is a digital asset protection firm that has raised $30 million of financing led by Foundation Capital to protect people and their digital assets from hackers or human error. David Janczewski, CEO and co-founder of Coincover has shared with TechCrunch.
“We have made this investment not because of the year’s turbulent times with crypto. It was for it” Charles Moldow, general partner of Foundation Capital, told TechCrunch. “One of the major challenges to the adoption of digital assets on both the individual as well as the institutional level is fearing losing and theft.”
The platform, created in the year 2018 and it was launched in the year 2019, has attracted $41.6 million so far, Janczewski said. The previous supporters comprise Volt Capital, Avon Ventures, DRW Venture Capital, SMT Digital, Valor Equity Partners, Element, Fintech Collective, and Susquehanna International Group, according to its website.
Coincover is a partner with more than 300 businesses, which includes crypto-related companies such as BitGo, Fireblocks, and Bitso and hedge funds family offices, banks, and hedge funds.
The company’s two major products, Disaster Recovery, and Theft Protection will help those who deal with digital assets to prevent loss and theft.
“The potential is huge in the present — crypto is a trillion-dollar asset class, but the industry of digital asset protection is a tiny fraction and billions were snatched away during the past year,” Moldow said. “Beyond the value of the money is the stigma that remains of being the victim of a security breach digital asset companies must be careful to avoid this at all costs and the desire to pay for it is extremely high.”
In the wake of the FTX collapse There’s been an increase in requests regarding Coincover, Janczewski said.
“All businesses are worried about the loss of access to cryptocurrency and are keen to safeguard their end users’ money from theft,” Janczewski added. “For our customers, private key backups provide another layer of security that allows them to retrieve assets in the event that they lose key keys, or if their service is unavailable. We’ve also noticed a significant rise in the demand for backups of seed phrases, that provide a way to recover funds.”
Seed phrases, also known as recovery phrases are a collection of random phrases that serve as a security feature for one’s cryptocurrency wallet. It is given to users at the time they create the wallet but isn’t shared again. Sometimes, users lose their passwords and are unable to get access their accounts, which results in the inability of accessing the funds.
The cyber-attacks that are happening in the crypto world are becoming increasingly sophisticated as more users are entering the crypto space as well as the market has needed to adapt to this, Janczewski noted.
“All enterprises must put in measures to safeguard them, their employees, and their users at the end of the line,” he added. “Businesses typically employ an independent third party to help them back up their data or guard against malware, for instance. In that way this isn’t groundbreaking, it’s actually almost mandatory.”
For Coincover it’s all about “tackling the next frontier of risk that is, social engineering.” Janczewski said.
“If you’ve been enticed by someone to pay a significant amount of money and you’ve completed it, it’s thought to be a fraud it’s not theft” Janczewski stated. “In traditional finance, banks aren’t in a position to reimburse customers if they’ve made a decision to send money in this manner, regardless of whether you’ve been deceived. At Coincover we’re currently trying to solve this issue using the power of blockchain technology and the risk information we have on our customers.”