Israeli startup GK8 has completed a seed funding round of $4 million led by Check Point co-founder Marius Nacht and Israel Discount Capital and with the participation of blockchain VC firm EdenBlock, iAngels, IDEAL-HLS, StratX and the Israel Innovation Authority.
The Tel Aviv-based company provides secure end-to-end management of digital assets with the patented technology it has developed for sending transactions to the blockchain without any direct or indirect internet connection.
The company was founded in July 2018 by CEO Lior Lamesh and CTO Shahar Shamai, who previously protected the Israeli government's strategic assets against cyber-attacks. GK8’s advisory board includes cryptography expert and Zcash founding scientist Prof. Eran Tromer and Ilan Levanon, formerly the head of cybersecurity in an Israeli intelligence unit.
GK8 is currently targeting financial institutions, custodians, exchanges and hedge funds which hold cryptocurrencies.
GK8's custodian technology is already operational and helps to securely manage digital assets for clients such as eToro, a global multi-asset trading and investment platform. GK8's customers manage a total of more than $1 billion in digital assets.
Current custodian solutions used by financial institutions and state-owned enterprises do not meet institutional scale security standards. In addition to existing security protocols, digital assets based on blockchain technology need a higher security standard since signed transactions are irreversible. Unfortunately, the current blockchain wallet solutions, categorized into “cold wallets” and “hot wallets”, are subject to major cybersecurity vulnerabilities. Cryptocurrency thefts, scams, and fraud worldwide led to the stealing of approximately $4.26 billion in the first six months of 2019 alone.
To meet this challenge, GK8 experts have developed proprietary cryptographic techniques that enable real-time blockchain transactions of digital assets without any need for an internet connection. These techniques provide a secure environment to sign blockchain transactions and execute automatic reconciliation confidently. The company’s techniques, protected by five registered patents, can bypass core assumptions related to cryptocurrency transfers and eliminate attack vectors to any asset transfer.
These capabilities allowed GK8 to develop the world’s first and only secured cold wallet with hot wallet functionalities. As a result, digital asset transfers secured by GK8 become inaccessible to criminal hackers or sponsored cyber-attacks. Based on these capabilities, GK8 developed a fully operational end-to-end encrypted system for managing and safeguarding digital assets beyond the reach of hackers.
Lamesh said, “We found security vulnerabilities in one of the most secured cold wallets in the market. After we saw how easy it was, we understood that hackers will invest millions to steal billions, and we decided to develop a secured end-to-end institutional tool for managing digital assets.”
He added, “Today, GK8 has a full working solution which is already securing customers who manage around $1 billion for global clients, protected by 5 patents and enjoy the trust and backing of leading cyber-security opinion leaders, partners and investors. This is supplemented by our strong team of cyber-security experts and developers whose ability to safeguard money is proven, and this has led global organizations to trust our ability to securely manage their digital assets.”
Published by Globes, Israel business news - en.globes.co.il - on September 18, 2019
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