CipherTrace, a security firm that tracks crypto crimes, has closed a $27.1 million Series B round of funding led by Dan Loeb’s Third Point Ventures, CoinDesk has learned. 

The fundraising round was also backed by early investors Neotribe, Acrew Capital and Seraph Group.

A representative for Third Point Ventures, which received a CipherTrace board seat, confirmed its participation in the funding, in an email to CoinDesk. Loeb’s investment companies have now backed three crypto startups, including Bitwise and eToro.

CipherTrace plans to double its 100-person operation by June 2022 as it tries to capitalize on the growing market for crypto intelligence. It’s hardly alone in the field. TRM Labs and Chainalysis have raised capital in the last three months, Blocktrace unveiled a new software product on Monday, and Elliptic announced today that it has completed a pilot project with Santander, Spain's largest bank, to detect suspicious activity. 

“It's a good time to be in our space,” CipherTrace CEO Dave Jevans told CoinDesk in an interview. He said in the wake of the recent ransomware attacks, the firm has experienced an uptick in business from recovery firms, government agencies, law firms and insurance companies. Banks too. “We’re seeing a lot of growth in basically everything we're doing now.”

CipherTrace sells compliance tools to crypto exchanges, government investigators and banks. It compiles intelligence on wallets to help organizations track transactions, but doesn't share data on individuals.

Jevans said it's up to the courts to unmask individual wallet-holders; his company just helps investigators move from point A to B. 

Rolling out specialty intelligence software has been one recent CipherTrace strategy. It launched a sanctions compliance platform for decentralized finance (DeFi) projects in April as the market for tools used to comply with the Financial Action Task Force “travel rule” is “really heating up,” Jevans said. The global financial watchdog announced rules in 2019 to combat the use of cryptcurrencies in money laundering and funding for terrorists.

Another target area has been privacy coins. CipherTrace claims it can occasionally break through the veil of secrecy of monero, a cryptocurrency that has been used by criminals. Jevan said that while his team is “supportive of the monero project,” he insisted the privacy coin is doomed to fail without some degree of oversight and noted that blockchain tracing and compliance tools are necessary if cryptocurrency is going to flourish.

“We’re not gonna get the next billion people into the market without these tools,” he said.