Safeheron Secures $7M to Make Private Keys Safer for Crypto Wallets – TechCrunch

Crypto enthusiasts promise to build a decentralized money system that allows people to trade freely without intermediary intervention. It’s a rosy picture, but recent incidents of security vulnerabilities indicate that the decentralized world may not be working as well as its believers envision just yet.

That’s why entrepreneurs, flush with venture capital, are racing to make crypto applications more secure. One of them is Singapore-based Safeheron, which recently raised $7 million in a pre-Series A funding round.

Safeheron’s goal is to make private keys more secure. Essential to decentralized crypto apps, private keys allow individuals to take control of their digital assets through self-managed wallets rather than handing control over to a centralized institution.

When users make a transfer from the self-managed wallet, they must sign the transaction with these passphrases. The users basically become their own banks.

However, this arrangement comes with risks. If hackers get their hands on certain secret codes and drain the corresponding wallets, users have no way to get their money back in the absence of a centralized party taking responsibility.

Safeheron’s solution to strengthen the security of private keys takes signals from multi-party computation (MPC) concept, which was first introduced by a Turing Award-winning computer scientist. In the context of digital assets, MPC works by distributing the signing process between multiple computers, as opposed to the conventional way of relying on one private key to authorize transactions.

Bruce Wang, chief technology officer at Safeheron, offered this analogy: “Say you have a safe. Instead of using a single original key, we use multiple keys to open it.”

Other startups are also using MPC to enable distributed signing of crypto transactions, but Wang pointed to the fact that Safeheron is open source, which gives customers more transparency in the source codes.

“Being open source is the key to building trust among users,” said Yu Chen, a partner at Yunqi Partners, who led Safeheron’s latest round with Web3Vision.

Like several other top China-focused venture capital firms, Yunqi allocates capital to support web3 projects built by Chinese talent and aimed at the global market.

Other investors in the round include PrimeBlock Ventures, M77 Ventures, ShataCapital, Kryptos, Analpha Ventures, Waterdrip Capital, 7 O’clock Capital, Misa Zhu, founder of AR glasses maker Rokid, and Fan Zhang, a former co-founder of Sequoia Capital China.

Since its product launch in October, Safeheron has powered over 20 clients, who collectively have more than $100 million in cryptocurrencies under custody and have facilitated more than $4 billion in transactions using Safeheron’s wallet-as-a-service, according to Wang.

The young startup just brought on board a heavyweight customer, the popular Ethereum-based wallet MetaMask, which had amassed over 30 million monthly active users as of March. By adding Safeheron’s MPC capabilities, MetaMask can allow users to sign transactions using multiple devices or applications instead of just one.

Like many Singapore-based web3 founders, Wang and his co-founders are veterans of China’s tech industry. While China has banned crypto trading to prevent financial speculation, the government has supported research efforts in the underlying blockchain technology, Yunqis Chen noted.

“China is working on its own digital currency, which may also make use of technologies like MPC in the future,” Wang suggested.