On Tuesday, Web3 officially opened its doors to Sardine and its real-time fraud prevention and compliance software that will help to manage risk and provide more visibility as between financial institutions and crypto firms.

Sardine, a San Francisco startup, offers fraud protection and compliance software that provides API integration for companies to protect its transactions from fraud and increase customer security.

In February, it closed a $51.5 million USD Series B funding round, led by a16z and included participation from Sound Ventures, Activant Capital, Visa, Google Ventures, and many others.

After announcing its latest product, Insights, Sardine believes that now is the time for both traditional and digital financial systems in DeFi to work together and defend their shared customers from risk.

The first six months of 2022 have already proven to be catastrophic for Web3, extracting more than $2 billion USD in losses due to hacks and exploits, according to a quarterly security report released by blockchain auditing and security company CertiK. This staggering financial hit is more than all of the losses in 2021 combined.

By the end of 2022, it is believed that 34 million adults living in the United States will own at least one cryptocurrency, along with the many banks and businesses beginning to explore the digital asset sector.

A Need For Insights

With more users being encouraged to participate in the space, whether it’s through connecting their bank accounts to crypto exchanges, transferring fiat funds to NFT marketplaces, and/or engaging with emerging DApps — Sardine considers the interconnection between these parallel financial systems to be more essential now than ever before.

This visibility gap between traditional finance (TradFi) and DeFi’s disconnected systems, according to Sardine, has triggered amplified risks and diminished the overall customer experience. In comparison to 2022, last year ended with a $680 million+ USD in losses due to fraud.

With banks struggling to eliminate digital asset risks and crypto users upset with the delayed transaction speeds, Sardine has developed a way to bring greater visibility to an entity’s actions with compliance and fraud prevention.

By utilizing Insights, users are able to request an API to receive a real-time reply containing the given entity’s risk score, reputation level, and intelligence on device and behavioral information.

“Insights offers a real-time, comprehensive view of an entity’s risk based on its history with cryptocurrencies, digital assets, and conventional bank products and services” — providing transparency and an enhanced customer experience between the two financial systems,” the company shared in its Tuesday announcement.

Ravi Loganathan, Head of Financial Institution Services at Sardine, added that with Insights, they’re “making proprietary data [they've] generated through [its] risk models available to any company with appropriate permissions, so they can better assess counter-party risk when moving money.”

Sardine built Insights within frameworks of applicable privacy laws and regulations to allow any authorized company to use its network in advancing fraud detection models and assessments of risk.

Needed More Than Ever Before

In lieu of rising adoption, financial institutions still have acted to limit the activities of the industry’s most notable fintech and crypto companies – restricting growth and causing greater hesitation and confidence from mainstream consumers.

“The future success of financial services requires better alignment and collaboration between players in TradFi and Defi – Sardine aims to fill the visibility void,” said Loganathan.

With DeFi predicted to continue heading toward foreseen adoption by the majority, bridging the gap between traditional banks and crypto firms is becoming more important each and every day.

“We want to create an inclusive utility for the industry that improves collaboration between both systems and accelerates the development of tools to address common challenges. Insights is the first step in overcoming this growing industry challenge,” shared Sardine CEO, Soups Ranjan.

Continuing To Build

Prior to the debut of Insights, Sardine has expressed its ongoing mission in improving the process for companies moving funds from fiat money to digital currencies. Another product offering by the startup, Instant Settlement, provides immediate ACH transactions and card on-ramps to 30 different crypto assets and NFTs.

Autograph was the first partner to use Sardine’s product that provided a “checkout process” for direct fiat to NFT purchasing, for its Tom Brady’s Signature Experience NFT launch.

As of today, Sardine currently has over 135 active customers, including major names like Coinbase, Revolut, Uber, PayPal, and Zelle.

In other crypto news, The Lazarus Group is back with a new target.