The financial technology company Fordefi today announced an $18 million seed round, led by Lightspeed Venture Partners ...
...and joined by major crypto investors including the FTX-affiliated Alameda Research, Jump Capital, and Castle Island.
In an interview, Schwartz said the main use cases for crypto have evolved during his time in the industry.
“The challenge is, it’s a very different set of risks that are involved,” Schwartz told Fortune.
“We’re this category creator in the middle,” Schwartz told Fortune. Dima Kogan, Fordefi’s CTO, said there are two key aspects to custodial solutions.
The second is making sure that every time a private key is used, it’s used correctly—especially important in DeFi because users can’t always trust the origin of transactions.
“Our solution protects the private keys, but then it also provides all the necessary context for the user to make a meaningful decision every time they’re signing a transaction,” Kogan said.
An example is Alameda Research, the crypto-focused trading firm founded by FTX’s Sam Bankman-Fried with which Fordefi has “a close relationship,” Schwartz added.
As security issues around DeFi perpetuate questions around its sustainability—and harmful impacts to the crypto ...
...industry as a whole—Schwartz said Fordefi will add confidence for institutional players operating in the space.
“We don’t protect against people actually deploying a malicious contract,” he told Fortune, “but we provide tools ...
...to help people manage their risk and exposure before they’re actually going to interact with these contracts.”