Staging Labs secures $1.1M to protect crypto & NFTs after co-founder's $10,000 mistake
Staging Labs raises $1.1M to protect crypto assets following co-founder's $10,000 loss to phishing attack. Their product enables the automatic transfer of digital assets from a vulnerable crypto wallet to a backup safe in the event of a mistake, hack or scam. Investors include The General Partnership, Flourish Ventures, NGC Ventures, AlphaGrep, Gaingels, scouts from a16z, Kleiner Perkins, Greylock, and crypto founders and angel-operators from ConsenSys, Coinbase, Anchorage Digital, Chainalysis, Quicknode, Merkle Science and more.
In light of recent collapses of Luna, Celsius, and FTX, the rallying cry "not your keys, not your coins" has gained popularity, emphasizing the importance of self-custody in managing crypto assets. However, self-custodial wallets can be difficult to secure, leaving users vulnerable to losing their assets in one wrong move. Staging Labs, a startup protecting web3 from mistakes, hacks and scams, understands this risk firsthand after one of its co-founders lost $10,000 worth of Ethereum and NFTs in a phishing attack.
Staging Labs has raised $1.1 million in an oversubscribed pre-seed round to develop Saferoot. Saferoot automatically transfers digital assets from a vulnerable crypto wallet to a backup safe in the event of a mistake, hack or scam. This is achieved by stopping malicious transactions before they are finalized on the blockchain. By reducing the number of funds lost to fraud, Saferoot addresses a key obstacle to mainstream crypto adoption and provides peace of mind to users. The round saw investment from notable firms including The General Partnership, Flourish Ventures, AlphaGrep, NGC Ventures, Gaingels, scouts from a16z, Kleiner Perkins, Greylock, and a group of experienced crypto founders and angel-operators from companies such as ConsenSys, Coinbase, Anchorage Digital, Chainalysis, Algorand, Quicknode, Blockdaemon, and more. Staging Labs was also accelerated by Binance Labs in their Most Valuable Builder (cohort 5).
Crypto fraud can impact even the most prominent figures in web3, such as Kevin Rose and Nikhil Gopalani, both of whom have fallen victim to phishing attacks. Kevin Rose recently lost more than $1.1 million in a phishing scam, while Nikhil Gopalani, COO of Nike's RTFKT, lost hundreds of thousands of dollars. According to Chainalysis, crypto hacks in 2022 reached a record high of $3.8 billion in stolen cryptocurrency, which is a 15% increase from the previous year, despite the overall crypto market capitalization dropping by 64.1%, as reported by CoinGecko. This troubling trend suggests that the growth rate of crypto fraud is outpacing the growth rate of crypto adoption. If left unchecked, it could prevent web3 from ever successfully onboarding mainstream users.
<aside> š¬ "For the next billion users to onboard to Web3, peace of mind around wallet security is one of the biggest challenges to solve. We were impressed with Staging Lab' unique & technically advanced solution to securing customer assets and are proud to partner with them as they bring this product to market.ā Niall OāHiggins, Director of Engineering, Crypto at The General Partnership
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<aside> š¬ āStaging Labs has developed pioneering technology that addresses a fundamental challenge for mainstream crypto adoption. This technology aligns with MetaMask's top priority of reducing fund loss incidents. I am honored to support Staging Labs and their mission to safeguard the web3 ecosystem from mistakes, hacks, and scams.ā Marouen Zelleg, Director of DeFi & Wallets at ConsenSys.
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<aside> š¬ "We are excited to back Staging Labs to help them protect everyday consumers of the crypto ecosystem. Recent events in the US banking industry are a reminder that there are regulatory and system protections that we often take for granted in the tradfi world. Those protections have yet to be built in the crypto world. Individuals are expected to fend for themselves, especially against fraud and scams. Despite the market downturn, and independentĀ from theĀ largeĀ scale meltdowns that have made headlines, illicit transaction volume in crypto, one measure of fraud and scams, rose for the second consecutive year, hittingĀ over $20 billion. We wondered if there was a way to leverage theĀ underlying technologies of crypto to empower everyday users against fraud? Frankie and Jake are building a compelling answer to that question." Kabir Kumar, Investor at Flourish Ventures
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