Ciphrex Raises $500k to Advance Multisig Wallet Offering

Cryptocurrency security firm Ciphrex has completed a successful A-Series funding round, raising $500,000 (£327,934)

Six accredited investors took part in the round, according to the company, but they wished their participation to remain private.

Enrique Lombrozo, co-CEO and chief operations officer, said:

“We are glad to announce we’ve met our goal of raising half-a-million dollars in this initial round. We raised $300k immediately, back in October 2014, and then we raised the remaining $200k in the last few weeks. These funds will allow us to further advance, promote and expand our line of products.”

Ciphrex's product line includes mSIGNA and CoinSocket. The former is a multisig wallet application which supports offline keychain generation, offline signing, multi-device synchronisation, account management and multiple blockchains.

The wallet works in conjunction with CoinSocket, an application development platform that allows the secure management of multisig accounts for businesses.

When asked about his recent fundraising efforts, Lombrozo said:

"We feel fantastic! That's all we need to get us to round B. We are working on our business plan for the next stage and will be ready to offer a Series-B in the next few months."

Bitcoin draws venture capital

The news comes after CoinDesk's State of Bitcoin report found that bitcoin venture capital investment surpassed that of early stage Internet investment last year.

BitPay and Blockchain both completed successful A-rounds in 2014, respectively raising $30m and $30.5m in May and October. Notably, the Blockchain round was the largest ever single investment made in a bitcoin company.

In total, bitcoin firms raised $314.7m in 2014, representing a 3.3-fold increase over the previous year.

North America, which has been receiving venture capital investment in bitcoin since 2012/13, is still the place to be for startups trying to raise cash.

The growth of multisig

After many notable hacks in the space, a high emphasis is currently being placed on security when it comes to bitcoin storage.

Multisig is increasingly being seen as a more secure option since, rather than merely requiring a single password, it needs 'm of n' keys to authorise a transaction. 'M of n' might be two of three, or three of five, or more, depending on the levels of security required.

When Ethereum recently required a more secure solution for storing bitcoins raised in their crowdsale, the decision was taken to use Ciphrex's multisig solution.

When asked about the issue, Lombrozo commented:

"Security is the primary concern for financial transactions. Ciphrex's platform provides a general m-of-n multisig account management architecture supporting bitcoin and other altcoins."

Will O'Brien, CEO and co-founder of BitGo, a bitcoin security company and pioneer in multi-signature technologies, examined bitcoin security trends in a previous CoinDesk article and noted that "2014 was a pivotal year in bitcoin security" due to the wider acceptance of multisig.

He pointed out that there had been a 79-fold increase in daily multisig transactions over the last year and that exchanges had now started to adopt the technology.

However, "we still need more adoption of multisig as an industry", he concluded.

Funding image via Shutterstock