Sardine’s Algorithm Now let Fintech and Crypto Detect Fraud!


Sardine's Algorithm
Image Credit: Getty Image

Honestly, it feels good to be in the fraud detection business that cuts across fintech and crypto, thus, Sardine’s algorithm mission. Recently, crypto to be precise has witnessed high-profile scams, forcing many companies operating within the ecosystem to beef up their compliance capabilities in order to ensure they don’t end up in the hands of regulatory watchdogs.

Going forward, Sardine just announced that it has successfully closed on $19.5 million in Series A funding from fresh investors Andreessen Horowitz (a16z), Experian, and NYCA. This also saw the participation of existing investors led by a16z’s Angela Strange. Although, in March the company raised a $4.5 million seed round.

Meanwhile, the subject company function as a compliance platform for fintech companies, which primarily serves NFT marketplaces, neobanks, crypto exchanges, and crypto no-ramps. The company also told a source familiar with the matter that it has 50+ roaster that includes companies such as Luno, Brex, FTX, and Moonpay.

Responding to this, the startup’s CEO and co-founder ‘Soups Ranjan’ made clear in an interview that “The use case for all our customers is essentially that they’re all using us to prevent fraud when money is being loaded into a wallet”.

For instance, once customers move money to their wallet via their debit card, credit card, or ACH transfer, the platform assigns a risk score to the bank account or card that’s used through an algorithm and assumes fraud liability for the transaction. Prior to this development, Sardine made clear it has long offered both features, but based on the company’s announcement, it’s unveiling instant ACH transfer capabilities that will see customers bypass the traditional 3-7 waiting period in order to access their funds. This will be enabled by Sardine by pre-funding the consumer’s crypto purchase in their wallet and taking on the fraud, regulatory, and compliance risks associated with the waiting period.

Furthermore, the company’s co-founder and CEO who previously worked as Coinbase’s director of data science and risk, and Revolut’s head of crypto, confirmed that Sardine’s risk assessment algorithm functions according to user behavior. Noting that Sardine’s algorithm detects activities like segmented typing that a user toggles between different windows as a user types in basic information such as their name – a potential indicator of fraud. Equally, the platform also collects phone accelerometer and gyroscope data coupled with network traffic information from users to access the threat of fraud.

While the platform focuses on fraud detection, which differentiates it from law enforcement, it implies local specifics of regulatory regimes are not core to the platform’s business. However, the company currently has clients all over the world and has helped a number of companies in countries including Russia and Japan coupled with expansion into the U.S. Ranjan equally noted that Sardine has engineers located across “pretty much every time zone” all over the globe.

Image Credit: Sardine’s CEO & co-founder

“Fraud is global. There are very similar patterns in the way fraudsters behave – whether they’re trying to steal money in Canada, the U.S., or Japan doesn’t really matter”, Sardine’s CEO and co-founder Ranjan.

Adding that the previous funding will be used to hire at least thirty more employees in the near term, he said. Also, this will mean growing its engineering team as the company seeks for executives to head its growth, legal teams, and marketing.

Equally, he stressed that the “new generation” of fintech entrepreneurs are packed with impressive ideas, but entrepreneurs in the space are not often familiar with the complexities of foreign compliance processes. Hence,

“We are here to help them with all their fraud and compliance needs so that they don’t have to worry about it. We let them just focus on building the product and launching it and achieving product-market fit”.

  • What’s your view a helpful platform as this?