Blue, which offers know-your-customer (KYC) and anti-money laundering (AML) identity verification solutions for traders on DeFi protocols, has come out of stealth with $3.2 million in funding.
The funds were raised in a seed round co-led by Blockchange Ventures and Fenbushi Capital, with participation from DoraHacks, Knollwood Investment Advisory, Gate.io, and Wave Financial, according to an announcement on Tuesday.
The announcement comes as interest in decentralized finance (DeFi), a term used to refer to lending, trading and other financial activities carried out on a blockchain without traditional middlemen, reached new heights in the wake of centralized crypto currency exchange FTX’s collapse late last year, and a series of crypto exchange bankruptcies earlier that year.
Blue will use the funding to complete security audits from Halborn and Verilog Solutions. The rest of the money will go into expanding Blue’s core team and bringing the company’s permissioned DeFi solution to market in the first quarter of 2023.
The company has already begun working on several proof-of-concept projects with major DeFi protocols, which it will announce in the coming months, said Blue co-founder and CEO Casper Yonel.
“We have basically a really wide array of customers that are interested in the product. We have institutions, banks, on-off ramps, liquid staking solutions, regex issuers,” Yonel told CoinDesk. “There’s a lot of different use cases across different types of customers.”
Blue has built out its permissioned DeFi offering, which assigns “Blue IDs” to users that are then verified by a team of credential issuers, since early last year.
The company was the finalist at the ETHDenver ‘22 Hackathon in March 2022. Since then, the firm has participated in programs like Outlier Venture’s DeFi Base Camp Accelerator, Binance’s Most Valuable Builder (MVB) Program, and Startup with Chainlink’s Incubator.