PayPal is one of the lead funders for the $20 million round raised by Chaos Labs, the platform that protects crypto protocols.
Summary
PayPal co-leads $20 million funding for Chaos Labs
Apparently, payments giant PayPal seems to be increasingly interested in the crypto world.
Indeed, PayPal in conjunction with investment management firm Galaxy led the initial $20 million funding round for Chaos Labs.
Omer Goldberg, founder and CEO of Chaos Labs, shares the announcement on Twitter:
2/ @coinbase, @Uniswap, @lightspeedvp, @BessemerVP, @HashKey_Capital and top angels @balajis & @naval were also part of this amazing round. 🤝
— omer (@omeragoldberg) February 21, 2023
A $20 million seed funding round, led by PayPal and Galaxy, but which also involved 23 organizations and six angel investors. Key participants include Coinbase Ventures, Polygon, Avalanche, OpenSea, UniSwap and Balaji Srinivasan.
Chaos Labs uses an automated risk management platform with the aim of protecting crypto protocols from external attacks and risks. As such, the platform provides agent- and scenario-based simulations, protecting the protocols from economic vulnerabilities and market manipulation incidents.
Goldberg also emphasizes in his tweets that the money raised will be used to expand the suite of products offered by Chaos Labs and to keep risk management at an optimal level.
Not only that, Goldberg highlights how financial risk management needs to be improved to meet the needs of decentralized finance (DeFi) ecosystems. In this regard, the CEO of Chaos Labs recalls that total funds lost due to exploits in DeFi in 2022 was $2.05 billion, a 48% increase from 2021!
PayPal turns out to be a crypto holder
Back on 10 February 2022, an annual report filed with the U.S Securities and Exchange Commission (SEC) revealed that PayPal was a cryptocurrency holder.
And indeed, it appears that at the end of last year, PayPal held as much as $604 million in crypto such as Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. However, this value is lower than that shown in September 2022, when PayPal held $690 million in crypto.
The decline in the payments giant’s crypto portfolio in those months is likely due to the collapse of the FTX crypto-exchange and the whole bearish trend that has been going on in the sector.
Looking back at the end of the year, the company was reported to own $291 million in BTC, $250 million in ETH, and the remaining $63 million between LTC and BCH.
PayPal and the collaboration with MetaMask
In mid-December, PayPal also revealed that it was collaborating with MetaMask with the aim of offering different options for transferring assets.
In essence, the two digital payments giants began their partnership by looking for a way to allow users to select PayPal as a payment option when purchasing ETH within the MetaMask portal. In this way, by facilitating the purchase, the crypto sector could expand to that customer base from the PayPal circuit.
In addition, users will be able to use their MetaMask wallet to purchase products on other platforms that integrate PayPal.
A crypto wallet like MetaMask is often a starting point for companies that want to interact with Web3 applications, such as play-to-earn games, and metaverse platforms.
MoneyGram and Western Union are also getting on board in the crypto sector
Thus, not only PayPal, but other digital payments giants such as MoneyGram and Western Union have also entered the crypto sector.
And indeed, last November, MoneyGram had announced that only users in the US would be able to use the platform to buy, sell and hold certain crypto assets.
Initially, the list of supported crypto was limited to Bitcoin, Ethereum and Litecoin, although the peer-to-peer payments giant is expected to expand the offering during this year.
This news also led MoneyGram to strengthen its partnership with Coinme, the US cryptocurrency exchange that specializes in the conversion of crypto to cash, and vice versa.
Western Union Money Transfer, as early as October 2022, also reportedly filed three trademark applications incorporating claims for managing digital wallets and trading digital assets, among other things.
Something that suggests rebranding and opening up to the crypto world, which could lead the company to expand into the Web3 sphere.
