Unit21 Raises $45 Million to Grow Fintech Fraud DAO Consortium

Unit21 has raised $45 million in a Series C round to grow the Fintech Fraud DAO consortium.

The funding is being used to support a collaborative approach to addressing fraud and money laundering, and the consortium is experiencing a surge in participation, the risk and compliance infrastructure company focused on financial crime said in a Thursday (June 29) press release.

“The evolution of fraud calls for an evolution in our approach and must be achieved through collaboration,” Unit21 Co-Founder and CEO Trisha Kothari said in the release. “With the unwavering support of our partners and customers, and the backing of our investors, we’re eager to spearhead the fight against fraud and money laundering, striving to make the financial world a safer place for all through our shared commitment to the cause.”

Unit21 launched the Fintech Fraud DAO last fall to allow FinTechs to share data that can be used to identify fraud and prevent its proliferation, according to the press release.

In addition, the company’s risk and compliance infrastructure is being adopted quickly, with the number of transactions it helped clients monitor growing fivefold in 2022, the release said.

“Trisha and Clarence [Unit21 Co-Founder and Chief Technology Officer Clarence Chio] incubated Unit21 at SPC with the vision that combating fraud and money laundering requires an industrywide collaborative effort,” South Park Commons Founder Ruchi Sanghvi said in the release. South Park Commons and Tiger Global led the funding round. “This vision is becoming a reality through the rapid adoption of the Fintech Fraud DAO, which handles more than 10% of the adult population.”

A number of industry players are banding together to share information to fight fraud.

On Wednesday (June 28), Pay.UK said it is piloting a new payments industry coalition to bring together data from retail banks and building societies to detect and prevent fraud.

A day earlier, on Tuesday (June 27), fraud prevention firm Sardine launched an industrywide, independent consortium called SardineX that will help financial institutions and FinTechs share data and establish the credentials of senders or receivers of funds for transactions on multiple payment rails.

Five days before that, on June 22, Plaid announced a collaborative network called Plaid Beacon that allows FinTechs, financial institutions and Plaid-powered customers to share information about stolen identities and compromised accounts.