Proven raises $15.8 million to rebuild trust in crypto

Proven was started in 2022 by co-founders with experience in the financial world, including CEO Rich Dewey (left), Agustin Lebron (right) and Craig Newbold. Courtesy of Proven

For the past year, confidence has been lacking in the crypto industry. A startup, Proven, is trying to change that with new technology.

The New York City-based company, which was founded in 2022, announced Thursday a $15.8 million funding round led by Framework Ventures that will help it develop its product and expand its team to 12 or 15 people by the end of 2023.

Started by financial veterans from firms such as Jane Street and PIMCO, the company tackles the age-old conflict of trust in financial markets with an emerging technology: zero-knowledge proof. The term describes the use of advanced cryptography to prove that something is true, while revealing little else. For example, a zero-knowledge proof can be used to verify that someone is at least 21 years old, but without revealing their date of birth or other personal information.

In terms of proven, a company can prove that it is truthful about its financial information without revealing a lot of confidential data. Using zero-knowledge proofs, with outputs recorded on the Ethereum blockchain, Proven can perform checks for regulators or customers daily, without having to wait for a long and expensive audit, according to CEO and co-founder Rich Dewey,

“These are run daily with sort of real-time input,” Dewey said. “Often audits are quarterly, and you’re kind of looking back a month or two.”

Proven’s process for proving a company’s finances also sets it apart from other solutions, said Roy Learner, a partner at Framework Ventures.

“While we see all kinds of proposed solutions emerging, we felt that Proven differentiated itself by taking into account both assets and liabilities, which removes the possibility of sloppiness when it comes to proving reserves,” Learner said in a statement to Fortune.

At a time when former crypto industry giants, such as FTX and Three Arrows Capital, have crumbled in part due to their lack of transparency, Proven wants to make it easier for crypto companies to build trust with their customers and business partners.

Already, the company’s technology is being implemented by a stablecoin, TrueUSD, and a crypto exchange, Bitso, among others. Proven says its technology will be particularly useful for investors in the crypto space, helping with due diligence.

For a client trusting their money to an asset manager, the technology can also help provide a client with proof that their money is being invested the way they want without revealing the exact trades the manager is making.

Although the company is focusing on the crypto industry for now, Dewey said it could look to enter the traditional financial world in the future.

“People are very hesitant to potentially deposit money into an exchange or borrow money, and that applies to crypto and [traditional finance]and if we can reduce that, we think that’s a huge benefit to society and a huge opportunity.”