Tel Aviv-based startup GK8 is now emerging out of stealth mode and announcing that it has completed a seed funding round of $4 million, led by Check Point co-founder Marius Nacht and Israel Discount Capital – the investments arm of Israel Discount Bank, with the participation of investors such as the blockchain VC firm EdenBlock, iAngels, IDEAL-HLS, StratX and Israel Innovation Authority.
The company was founded in July 2018 by the CEO Lior Lamesh and the CTO Shahar Shamai, who previously protected the State of Israel’s strategic assets against cyberattacks. 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.
The startup, which provides secure end-to-end management of digital assets, has completed the development of a patented technology for sending transactions to the blockchain without any direct or indirect internet connection.
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.
CEO Lior Lamesh said he and CTO Shahar Shamai “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.
“Today, GK8 has a full working solution which is already securing customers who manage around $1 billion for global clients, protected by five 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,” Lamesh concluded.
“GK8 develops a high security custodian wallet solution, using an exciting and unique approach to cold wallet security,” commented Prof. Eran Tromer, Zcash founding scientist and member of GK8's advisory board. "Inspired by high assurance critical infrastructure systems, it uses state-of-the-art cryptographic techniques to minimize the wallet's attack surface and block the influence of a potential attacker on security-critical components.”
Eliahu Assif, CISO at eToro, noted: “GK8 provides us with a solution for the entire spectrum of threats, which also includes state sponsored attacks, like the recent attacks we've seen on financial industries worldwide.”