Crypto compliance provider TRM Labs is helping top Wall Street firms like JPMorgan wade into digital assets

Crypto compliance provider TRM Labs is helping top Wall Street firms like JPMorgan wade into digital assets
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Crypto compliance provider TRM Labs is helping top Wall Street firms like JPMorgan wade into digital assets
Esteban Castaño, TRM Labs cofounder and CEO.TRM Labs
  • TRM Labs offers compliance and risk-management tools to finance firms and regulators.
  • This February, JPMorgan announced a strategic investment in TRM Labs.
  • TRM Labs' cofounder and CEO told Insider that business is increasing, not waning, despite downturn.

This year's volatility in the crypto markets has seen billions washed out of the digital-assets ecosystem. But one startup, TRM Labs, is seeing increased interest in its back-end tools used by a swathe of players working across digital assets despite — or because of — the market's turn.

TRM Labs cofounder and CEO Esteban Castaño told Insider that TRM Labs grew at its fastest pace ever in the second quarter — topping record growth earlier this year. The startup has raised $80 million since launching in 2017, including a $60 million Series B last December that saw participation from the venture arms of financial giants like Citi, PayPal, and American Express. And this June, TRM Labs announced its acquisition of UK-based investigative blockchain training company CSITech.

Based in San Francisco, TRM Labs provides compliance, risk management, and anti-fraud tools to financial firms, blockchain players, and regulators alike. The startup has inked partnerships with at least one major financial firm, JPMorgan — which announced a strategic investment in TRM Labs this February — and counts Shopify and crypto-native giants like Circle and FTX as clients.

"We're seeing crypto businesses continue to mature their compliance programs and make significant investments in improving their ability to monitor for money laundering, financial crime, and sanctions exposure," Castaño said.


The financial sector, he added, represents TRM Lab's second-fastest-growing client base, after the public sector but ahead of crypto-native businesses. As one example, payments companies in particular, like Shopify, have embraced TRM Labs' transaction monitoring tools to combat money laundering. Chainalysis, another crypto compliance service in an increasingly crowded space, estimates more than $8 billion in crypto was laundered in 2021.

Aircraft carriers vs. speed boats

JPMorgan, which announced the opening of a virtual branch in the metaverse this February, isn't the only Wall Street bank to eye new digital-asset offerings this year.

Goldman Sachs has been top of the list among suitors interested in buying the assets of distressed crypto lender Celsius, CoinDesk reported this June. And in May, State Street teamed up with Credit Suisse and another crypto startup, Paxos, to work on a same-day stock settlement pilot.

For banks increasingly partnering with crypto startups or catering to clients flush with crypto assets, TRM Labs offers one particularly in-demand product called "Know-Your-VASP" — or virtual asset service provider.

"A big bank could pull a report from TRM to get the overall risk profile of, say, a large cryptocurrency exchange, and then make a decision if they want to serve that exchange," Castaño said.


TRM Lab's tech is built across 26 different blockchains, including the recent addition of Ethereum-based platform Polygon. According to Castaño, the startup builds its compliance tools across three core areas: "One cup of raw blockchain data, one-half cup of threat intelligence, and another half cup of advanced analytics." He views TRM Labs' services as akin to Google Maps — layers of intelligence and screening tools live on top of a flat level of data.

In Castaño's view, for the past five years, most traditional financial firms have been in a "research phase" when it comes to digital assets. Now, those same names are transitioning to a "deployment phase," actively rolling out new crypto products and embracing new compliance tools.

"Whereas a two-person crypto startup might function more like a speedboat, large financial institutions can sometimes function more like aircraft carriers," Castaño said.

"They just spent the last three years reorienting the ship and pointing it towards digital assets and crypto, and we are seeing that momentum continue to carry forward even through any bear market," he added.