According to a press release issued on June 12, Spring Labs, a US-based blockchain startup, raised $23 million in a round of seed financing.
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Spring Labs is said to use the funds to improve its blockchain-based platform, the Spring protocol, and to develop three new fraud protection products designed to combat fraud in the automotive finance arena.
According to the press release, the new products are Spring Verify, Spring Defense and Spring Protect, respectively, for authentication, fraud monitoring/mitigation and loan stacking prevention.
These products are said to provide information to lenders anonymously for financing activities such as unsecured consumer loans, small business loans, credit card issuance and secured car loans.
According to the report, auto financing fraud has almost increased five-fold from 2011 to 2018, and auto financing fraud is said to be relatively easy as other credit options become safer than auto loans.
The report estimates that the auto industry's annual losses are between $4 billion and $6 billion, mainly due to the use of fake ID cards to establish auto credit. A bit like a cloning company's scam, Spring Labs says scammers often mix some real and fake information to create fake credit accounts.
Investors in this round of seed financing include Galaxy Digital, a cryptocurrency investment bank created by password lover Michael Novogratz, and car giant General Motors.
As Cointelegraph previously reported, GM announced that it will join the Spring Founding Industry Partner (SPIF) program in February. SPIF is said to be a project initiated by Spring Labs to provide security solutions through research and collaboration.
Mike Kanarios, GM's chief strategy officer, commented on GM's decision to join the project as a partner. He said:
“As one of General Motors' exclusive financial divisions and one of the world's largest automotive finance providers, we are constantly innovating and improving our fraud prevention and detection capabilities to better serve and protect our customers and distribution. Business."