Notabene, a New York, NY-based crypto compliance SaaS startup, has raised $10.2 million in a Series A funding round co-led by F-Prime Capital and Jump Capital. The latest investment brings Notabene’s valuation to $45 million.

New investors include crypto exchanges Luno and Bitso, who were Notabene’s customers prior to the fundraise, as well as the venture capital arms of Blockfi and Gemini Frontier Fund. Illuminate Financial, CMT Digital, Fenbushi Capital and ComplyAdvantage CEO Charlie Delingpole also participated as new backers in the Series A, joining existing investors including Castle Island Ventures and Green Visor Capital. Notabene raised a $1.76 million seed round in October 2020, six months after the company was founded.

Notabene’s software helps its 50-plus customers, many of which are crypto exchanges, comply with the Financial Action Task Force (FATF) “travel rule” imposed in 2019. The travel rule requires crypto exchanges in FATF member countries to exchange customer-identifying information for transfers above $1,000 to ensure compliance with know-your-customer (KYC) and anti-money laundering (AML) regulations. FATF issued new guidance around the travel rule in October, clarifying the specifics around what exchanges need to do in order to comply.

Notabene fills a need from exchanges for technology that enables this transfer of information between parties in a transaction while preserving user privacy. The identify-verification process requires anonymous wallet addresses on the blockchain to be linked to real-world customers. Notabene CEO Pelle Brændgaard told TechCrunch that it is crucial to ensure this information is only seen by the parties involved in the transaction and Notabene itself.

Brændgaard added that beyond ensuring compliance, the identity-verification services Notabene provides also help build trust between consumers transacting in crypto, who want to ensure they are transacting with the correct counterparty and avoiding the risk of fraud.

The company plans to use the proceeds from the funding round to scale its technology to support an influx of new customers.

Of 25 crypto exchanges who responded to a survey by investor Jump Capital, 90% said they plan to use Notabene for travel rule compliance, Peter Johnson, a Jump Capital partner who is joining Notabene’s board of directors, told TechCrunch. Johnson said Jump’s investment was motivated, in part, by “overwhelming market feedback” that Notabene’s product was solving a crucial issue for the crypto industry.

Notabene’s biggest competitors are industry working groups implementing centralized protocols for compliance. The US Travel Rule Working Group (USTRWG) working group, which counts banks including Fidelity Investments and Standard Chartered among its members, is one of the most notable. Under such centralized protocols, member institutions and exchanges share data, and their users can easily transact with one another in a compliant manner.

Brændgaard said that these groups can sometimes foster exclusion. For example, the USTRWG, a US-based working group, only allows select regulated exchanges to join and is largely composed of U.S.-based exchanges.

“We have a few companies that are in Nigeria, for example, and Nigeria doesn’t have a regulatory framework for crypto. So if you have a gatekeeper that goes in and says, ‘we only expect fully regulated companies,’ that means that they’re automatically out,” Brændgaard said of centralized groups like the USTRWG. “It doesn’t matter if they have built up a good, strong, serious, well-respected compliance function over the years.”

Notabene’s founding team and many of its early employees came from decentralized identity startup UPort, Brændgaard said. He said he hopes Notabene’s decentralized framework, informed by the work they did at UPort, can build trust across exchanges without limiting membership.