The Nova Scotia Securities Commission estimates more than $1 billion has been lost to crypto scams in North America since 2021, representing thousands of Canadians who have been scammed out of tens of thousands of dollars.
One of these people is François Le Nguyen, a serial entrepreneur and angel investor who lost $10,000 worth of Ethereum and NFTs in a phishing attack on Discord. Following this loss, he began developing a solution for crypto transactions to prevent others from experiencing what he went through.
“Our aim is to act as the ultimate line of defense for crypto, enhancing user safety.”
– François Le Nguyen, Staging Labs
With former Sonos engineer and now co-founder Jake Harwood, Le Nguyen established Staging Labs to develop security solutions for digital assets. In October 2022, Staging Labs secured $1.1 million in an all-equity pre-seed funding round. Its initial product, called Saferoot, can identify suspicious transactions in crypto wallets and automatically transfer digital assets from a wallet to a “backup safe.”
Le Nguyen said he discovered he wasn’t the only one who had lost money to crypto scams after speaking with over a hundred crypto users. “If crypto scams persist, it’s likely that many people will shy away from using crypto,” Le Nguyen said, adding that these losses are one of the “core issues hindering the mainstream adoption of crypto.”
According to Le Nguyen, Staging Labs focuses on the “in-flight stage” of the digital asset transaction, which happens after a user has confirmed the payment.
“Our aim is to act as the ultimate line of defense for crypto, enhancing user safety even after the confirmation process has started, regardless of whether it was initiated by the user themselves or as a result of phishing and malicious activities,” he said.
Le Nguyen added that Staging Labs is actively pursuing partnerships with in-flight detection companies and will be announcing a collaboration in the coming weeks.
Investors in this round, which marks Staging Labs’ first raise, largely come from the blockchain space, including Flourish Ventures, AlphaGrep, and NGC Ventures, as well as angel-operators and crypto founders from ConsenSys, Coinbase, Anchorage Digital, Chainalysis, Quicknode, and Merkle Science, among others. Other participants include Mistral Venture Partners, The General Partnership, Gaingels, and what the company called scouts from three firms: a16z, Kleiner Perkins, and Greylock.
A number of angel investors also participated, such as Glowstick co-founder Anwar Jeffrey, as well as David Au-Yeung, co-founder of Flipp and most recently Carity.
Featured image courtesy Unsplash.