By Riley Kaminer
Watch out, crypto thieves. There’s a new sheriff in town, fighting to keep our crypto safe.
Meet Miami-based Lilita (Lili) Infante. During the decade she spent as a special agent at the Department of Justice, Infante created the first crypto-focused federal taskforce – tackling everything from illegal marketplaces to crimes against children. She also led the charge to take down Hydra Market: one of the largest crypto laundering platforms, accounting for 80% of all dark web crypto transactions.
Infante left the DOJ three months ago to found CAT Labs, a digital asset recovery startup. This week, CAT Labs announced that it raised a $4.3 million pre-seed led by Castle Island Ventures, Brevan Howard Digital, CMT Digital, and RW3 Ventures. Newark Venture Partners, Hash3, Borderless Capital, Cryptoverse Ventures, and Outshine Ventures also participated in the funding round.
“Crypto has made it very easy to monetize hacks, scams, and fraud,” Infante said in an interview with Fortune. “There are still many technological gaps in investigative technology in law enforcement that creates a huge backlog of cases that basically prevents law enforcement from being able to effectively target these cases.”
Infante, who started her DOJ career in money-laundering enforcement, sees cryptocurrency asset recovery as an area for growth. “I thought this was an opportunity of a lifetime for me to leave and actually build these tools,” she explained. And the opportunity is clear: illicit transactions involving cryptocurrencies hit an all-time high of $20.1 billion in 2022.
“The explosion of crypto-targeted crimes like hacks, scams, and fraud is the biggest threat to the Web3 and DeFi revolution,” said Infante. “We at CAT Labs see the incredible potential of distributed ledger technology as the future of the digital world. Our elite team of crypto forensics and cybersecurity professionals is working tirelessly to make this industry safe and secure by building tools to enable law enforcement to address crypto-enabled crime and by protecting investors from digital asset theft.”
So far, the team has eight full-time employees. This includes a former DOJ lead, a Dartmouth PhD, and the former Chief Security and Development Officer of the Digital Currency Group.
Its initial offerings will include a product to help government clients recover cryptocurrency assets from digital evidence like hackers’ computers or phones. CAT Labs will also help private sector organizations prevent digital asset theft and secure their infrastructure. Already, CAT Labs has been working with blockchain development company Rand Labs, while also being part of the incident response team for the MyAlgo wallet hack earlier this year.
Securing digital asset holdings has become a big business. For instance, Chainalysis, one of the major players in the space, had an $8.6 billion valuation as of their most recent fundraise last May. And with the global cost of cyber crime estimated to reach $10.5 trillion by 2025, there is likely more room for growth.
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