The collapse of the FTX empire didn’t just set in motion a crypto market downturn. The unraveling of FTX’s misuse of customer funds also exposed the risks of using crypto wallets controlled by centralized trading platforms, prompting users to seek self-custodial wallets.
As their name implies, self-custodial wallets allow users to have full control over their digital assets. While FTX’s demise and the subsequent troubles of its affiliated companies have dampened the crypto market, there’s no lack of wallet solutions still trying to vie users.
One such player is Account Labs, which today is announcing its fresh $7.7 million Series Pre-A funding round. The investment is led by investors from both the web3 and established internet tech arenas, namely, Amber Group, MixMarvel DAO Ventures and Qiming Ventures.
The crypto wallet space has started to see signs of consolidation as centralized exchanges and established wallet solutions look to meet new user demand, particularly the combination of asset control and friendly interface, which weren’t possible until recent technical upgrades in the blockchain community.
Legacy wallet players are paying attention to teams well-versed in so-called “account abstraction,” which allows developers to write smart contracts into self-hosted wallets and subsequently enable features that we take for granted in the web2 world, like Google login and account recovery via email.
Account Labs was born out of this new wave of wallet consolidation. Its funding round arrived off the back of a merger between hardware wallet provider Keystone Account Labs, which has amassed some 40,000 users, and account abstraction wallet builder UniPass in May this year, which led to the inception of Account Labs.
The new funding will go toward launching the startup’s new self-custodial wallet for consumers called UniPass (the namesake startup before the merger focused on B2B solutions).
As the U.S. government hits crypto giants like FTX, Coinbase and Binance with a flurry of actions, blockchain startups are still trying to prove their real-world use case elsewhere in the world. We’ve previously covered how Nairobi-based Kotani is working to let Africa’s overseas workers send money home cheaply and fast by using crypto. UniPass has a similar vision for Southeast Asia.
Running on Polygon, a blockchain network known for speed and low fees, UniPass aims to first target Filipino freelance workers, with other markets to come.
“Payments are still one of the untapped segments of Web3. It’s bizarre that the industry which started on the promise of global payments still doesn’t have successful payment apps. UniPass’ wallet looks to be a great attempt at the payments use case,” Sandeep Nailwal, co-founder of Polygon Network, said in a statement.
There are plenty of remittance options in the Philippines, but they are riddled with red tape, slow, and expensive like PayPal, Lixin Liu, CEO at Account Labs, told TechCrunch in an interview.
In contrast, Filipino users who already hold stablecoins — which Liu reckoned should be common in the digitally savvy freelancer tribe — can instantly transfer funds to UniPass. The wallet partners with a third-party vendor that has been licensed by the Philippine government to convert crypto into fiat, which can then be deposited into the popular domestic e-wallet GCash. The total transaction and forex fees amount to about 1%, compared to the 8-10% attached to PayPal, said Liu.
UniPass doesn’t take commissions from transactions at the moment; rather, it’s focusing on “user growth,” said the CEO. In the future, it might monetize by asking users to watch ads to redeem free transfers.
“We want to challenge web2 payments. We want to challenge PayPal, Wise and Stripe,” said Liu.