Account Labs raises $7.7M as FTX’s demise leads to crypto self-custody growth. Not only did the FTX empire fall trigger a decline in the cryptocurrency market. Users sought self-custodial wallets due to the revelation of FTX’s misappropriation of client assets, highlighting the dangers of utilizing cryptocurrency wallets managed by centralized trading platforms.
As their name suggests, self-custodial wallets provide customers with complete control over their digital assets. Although FTX’s failure and the problems that followed for its linked businesses have affected the cryptocurrency industry, many other wallet options are still competing for customers.
Account Labs, one such participant, is reporting today the closing of a new $7.7 million Series Pre-A fundraising round. Amber Group, MixMarvel DAO Ventures, and Qiming Ventures, investors from both the web3 and established internet industry sectors, are leading the financing.
As centralized exchanges and established wallet solutions try to meet new user demand, particularly the combination of asset control and user-friendly interface, which wasn’t possible until recent technical advancements in the blockchain community, the cryptocurrency wallet market has begun to show signs of consolidation.
Teams skilled in “account abstraction,” which enables developers to put smart contracts into self-hosted wallets and consequently provide functionality that we take for granted in the web2 era, like Google login and account recovery through email, are attracting the attention of legacy wallet players.
This most recent round of wallet consolidation gave birth to Account Labs. Its fundraising round followed a merger between account abstraction wallet developer UniPass and hardware wallet supplier Keystone Account Labs in May of this year, which resulted in the creation of Account Labs and its 40,000+ user base.
The additional money will be utilized to build UniPass, the business’s new consumer self-custodial wallet (the eponymous startup before the merger concentrated on B2B solutions).
Cross-border transactions
Blockchain businesses are still working to establish practical use cases abroad as the US government cracks down on cryptocurrency titans like FTX, Coinbase, and Binance. We’ve previously highlighted Nairobi-based Kotani’s efforts to make it easy and quick for Africans who work abroad to transfer money home using cryptocurrency. UniPass shares similar goals for Southeast Asia.
Running on the fast and inexpensive Polygon blockchain network, UniPass first targets freelancers in the Philippines before expanding to other regions.
One of the untouched areas of Web3 is payments. It’s strange that the sector that was founded on the promise of global payments yet lacks popular payment apps. The wallet from UniPass appears to be a tremendous effort in the payments use case, according to Sandeep Nailwal, creator of Polygon Network.
There are several remittance choices in the Philippines, but they are cumbersome, expensive, and sluggish, like PayPal, according to Lixin Liu, CEO of Account Labs, in an interview with TechCrunch.
Stablecoins, which Liu believed should be popular among the technologically aware freelancing tribe, maybe instantaneously transferred to UniPass by Filipino users. The wallet collaborates with a third-party company authorized by the Philippine government to convert cryptocurrency into fiat, which may then be placed into the well-known local e-wallet GCash. According to Liu, the entire transaction and foreign exchange expenses come to roughly 1% as opposed to the 8–10% associated with PayPal.
According to the CEO, UniPass doesn’t now receive transaction fees; instead, it is concentrating on “user growth.” It could eventually monetize by requiring users to view advertisements to receive free transfers.
“We intend to argue against web2 payments. “We want to compete with Stripe, Wise, and PayPal,” added Liu.
