By Spring Labs, a U.S based blockchain startup recently raised $23 million in a Seed A funding around as per a press release published on June 12.
Spring Labs will reportedly use the funds to improve upon its blockchain-based platform Spring Protocol. The funds will also be used to develop three new fraud protection products which are designed to combat fraud in the auto finance industry.
As per the press release, the three new products are Spring Verify, Spring Defense, and Spring Protect. Each product is designed for identity verification, fraud monitoring/mitigation, and loan stacking prevention, respectively.
Furthermore, the products will purportedly provide information to lenders in an anonymous fashion, for the purpose of financing activities including unsecured consumer lending, small business loans, credit card issuance as well as secured auto lending.
As per the report, the rate of auto financing fraud has almost quintupled from the period of 2011 to 2018. This has become an effortless way to commit fraud as other credit options have become more secure than auto lending schemes.
The report further cites that losses to industry amount to between $4 to $6 billion per annum, mainly in part to auto credit being established with fake identity documentation. Spring Labs states that it’s similar in nature to a clone firm scam, in which scammers mix in certain, valid information along with fake info, to establish falsified credit accounts.
Investors included in this Seed A funding round were Galaxy Digital, the crypto investment band founded by the famed crypto enthusiast Mike Novogratz and automotive company General Motors (GM).
Notably, GM announced that it was joining the Spring Founding Industry Partners (SPIF) Program back in February. The SPIF is allegedly an initiative launched by Spring Labs with the core goal of providing security solutions through research and collaborative work.
Mike Kanarios, Chief strategy officer at GM, commented on GM’s decision to join the initiative as a partner stating:
“As the captive finance arm for General Motors and one of the world’s largest auto finance providers, we are continually innovating and evolving our fraud prevention and detection capabilities to better serve and protect our customers and dealers.”
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