“Then we asked ourselves, ‘What will be the result of the second order?'” said Castaño. “The world needs the intelligence to make sense of that data to ultimately manage risk, and thankfully, that’s true.”

Today, thanks to its blockchain analytics software, TRM Labs is a familiar brand to law enforcement agencies around the world, and to a growing number of private companies that use crypto to move money. On Wednesday, the San Francisco-based startup announced a $70 million Series C funding round, led by its seed investor Blockchain Capital, along with a who’s who of traditional firms including Goldman Sachs, Bessemer, Brevan Howard, Thoma Bravo, and Citi Ventures. The new round of funding values ​​TRM Labs at $1 billion, placing it in the ranks of so-called crypto unicorns.

TRM’s success is not always a given, especially since its main competitor, Chainalysis, has a four-year head start. But an early strategic decision to track many cryptocurrencies and blockchains at a time when they paled in comparison to Bitcoin, as well as a deep bank of former government investigators, allowed TRM to gain a strong foothold in a full ecosystem as governments and private industries realized that blockchain technology was here to stay. Now, as the spread of tokenization and AI once again elevates global payments, TRM is poised to enter another phase of hypergrowth.

“We’ve seen a 500% increase in AI-enabled use of scams and fraud,” said Ari Redbord, a former federal prosecutor who came on board as one of TRM Labs’ earliest employees and now serves as global head of policy. “It’s a civilization-level threat … and we built the company for that moment.”

Fighting Crypto crime

For Jarod Koopman, a longtime IRS agent, blockchain analytics has been part of the job for more than a decade. “Without third-party tools, it would be very time-consuming and inefficient,” he said luck.

Government crypto operations are the stuff of lore, from the arrest of Ross Ulbricht, the architect of the dark web marketplace Silk Road, to the multinational effort to take down the child exploitation site Welcome to Video. (One of the leading agents of the latter operation, Chris Janczewskiis the head of TRM’s global investigation.)

Koopman, who took over as the IRS’ Criminal Investigation chief in March, said the agency began working with TRM Labs after its launch. Although they’ve been using Chainalysis for years, the IRS is trying not to put “all our eggs in one basket,” as Koopman said, especially as cybercriminals begin to expand beyond using Bitcoin for illegal transactions. “We stay the same because of the companies that exist, like TRM,” he said.

James Barnacle, the assistant director in charge of the FBI’s New York field office, said the bureau went from a few crypto cases in 2015 to thousands today. He pointed to the fallout from the October 7 Hamas terrorist attacks in Israel, when the FBI learned that crypto donations to wallets owned by Hamas helped fund the attacks. “TRM, and other companies as well, came in and said, we see this issue,” Barnacle said. luck. “The partnership between the FBI and the private sector is critical to our success. The FBI can’t do everything on its own.”

TRM’s close relationship with government agencies has sometimes created tension with the broader crypto industry, which is founded on libertarian ideals of decentralization. Many in the sector are ANGRY through reports of Hamas using crypto wallets that mention blockchain analytics groups like TRM Labs, especially after critics like Sen. Elizabeth Warren (D-Mass.) stabbed to express calls for stricter regulation.

Castaño dismissed the idea that TRM Labs is at odds with the rest of the industry, arguing that his company has a symbiotic relationship with the rise of blockchain technology. “Bringing security to digital assets … is very compatible with the crypto industry,” he said. “There is a real brand issue for crypto and digital assets.”

On the other hand, TRM has also cooperated with several companies accused of facilitating illegal finance, opening the blockchain analytics company to accusations of hypocrisy. Over the years, TRM published reports which highlighted the widespread use of the stablecoin Tether on the blockchain Tron by cybercriminals, before informed a task force launched in conjunction with Tether and Tron in late 2024. (Still TRM published reports which analyzes illegal flows using Tether on Tron.)

Redbord said the partnership came about after Tether and Tron approached TRM about reports with the goal of mitigating illicit activity. “Our mission is to stop bad actors,” Redbord said. “You can’t stop bad actors who only work in regulatory compliance areas without prohibited activity.”

However, while the Trump administration is taking a more relaxed approach to crypto regulation and embracing one-time criminals like Tether’s Paolo Ardoino to the US, Redbord insists that the TRM approach has not changed. “We talked to Tether and Tron before they talked to the White House,” Redbord said. “Our mission, frankly, is very far from politics. We are critical infrastructure for building this new economy of digital assets.”

The next era of crypto

Blockchain Capital led TRM Labs’ seed round at a time when growth investments are not common in the industry. Now, seven years later, the crypto venture firm led TRM’s Series C. While general partner Spencer Bogart said that no particular metric convinced his company to double, he pointed to TRM’s revenue, which has grown around 50% over the past four years. “This is not a company that has gone through the same types of crypto winters that we’ve seen more broadly in many of our portfolio companies,” Bogart said. luck.

The crypto industry once again finds itself in a bit of a position, with Bitcoin prices at a one-year low. But as Wall Street embraces tokenization, or the issuance of various digital assets on blockchains, Bogart believes TRM will be able to weather any future downturn. “It’s one of those things that is going to be the perfect table for anyone who touches something in the (crypto) space,” he said. “A large part of the private and public sector will need a tool like this.”

According to Castaño, nearly 40% of TRM’s customers are in the private sector, although he said the share is growing as financial organizations explore tokenized deposits, equities, and other assets.

The accelerating role of AI, both in cybercrime and analytics, is also increasing the value proposition of TRM. “If you’re operating in a world where there are trillions of transactions, how do you find the needle in the haystack without using AI?” Castaño said. “Criminals have access to all these amazing technologies, while our defenders on the front lines—compliance professionals and our analysts and law enforcement officers—often use spreadsheets.”

With a rapidly growing team of 350 employees, TRM Labs is capitalizing on the early vision of its founders that blockchain would dominate the rails of global finance. Their 20-year horizon is probably too conservative.