Kolkata-based start-up Hornet aspires to remove the risks and anonymity of crypto transactions

While many of us still struggle to understand what cryptocurrency even is, there is no better time to buy crypto than right now, with Bitcoin sitting at an all-time high of $70,000. With crypto, like almost anything else online, there is a huge possibility of crime and illicit activities — starting from terror funding to the use of the dark net and cyber fraud. So, with the danger of cyber crimes looming large, the need for a software to decrypt and analyse crypto activities is more relevant than ever.

Enter Hornet, a Kolkata-based start-up, which has come up with a software to help law enforcement agencies monitor and track such illicit activities. Founded by Souvik Haldar and Subhrojyoti Mondal, Hornet, founded in September 2023, is performing cryptocurrency analysis and investigation to help law enforcement agencies as well as analysis for exchanges.

Having worked in cybersecurity for seven years, Souvik Haldar, 28, saw the boom of crypto — and the growth in illicit activities using crypto — and realised there is a gap which could be filled with his expertise, “India does not have an indigenous tool to defend against crypto fraud, terrorism funded by cryptocurrency and money laundering. Most law enforcement agencies use foreign tools like Chainalysis and Merkle Science, so it is very prudent that Hornet exists,” he said.

What exactly does Hornet do?

Hornet is a blockchain and dark web investigation and intelligence platform.With a software aimed at analysing cryptocurrency and illicit activities, Hornet works with the Kolkata Police cyber division to solve cases related to crypto fraud. Giving My Kolkata an example, Souvik Haldar said, “We have almost solved a case where a very reputed gentleman was defrauded of almost Rs 50 lakh, where he thought he was investing in crypto but was actually being frauded.” Kolkata Police uses Hornet to investigate fraudulent crypto activities on a subscription basis while Hornet also offers private consultations with a fee based on the complexity of the case and the amount of money lost due to fraud.

With crypto trading involving multiple countries and working in a grey area, Souvik believes that India’s law enforcement agencies need to be equipped to be able to conduct investigations that require a deep understanding of crypto works. “Crypto exchanges are borderless and permissionless, so without a software like Hornet nobody can interfere with it. So, law enforcement agencies need Hornet to trace crypto and conduct investigations related to money laundering and crypto fraud,” Souvik informed.

Using AI to analyse data, Hornet is working to de-anonymise cryptocurrency to build user trust in crypto transactions. This is done by creating a risk analysis report by flagging accounts and wallets across platforms that are engaging in fraudulent activities and illicit transactions. “Unlike bank fraud, where you can trace the movement of the money to illicit or fraudulent accounts, analysing crypto is very difficult because it is just a random hexadecimal string of 30 letters. So, without analysing it, you don’t have any information about it — who it is created by, where is the source, and things like that,” said Souvik.

Where is India in the world of crypto and how many other companies do what Hornet does?

While crypto currency has become a growing method of trade the world over, India is still hopping onto the crypto trend and it will become more relevant in the years to come. The founders of Hornet believe that education regarding crypto is a must, because it would help one engage with cryptocurrency better instead of being hesitant due to risk of fraud. “If you see our website, it allows you to check if the crypto account you are sending money to is at risk or not. We create a risk score, so the lower the risk the more you can trust that particular account. Crypto trade will become more and more relevant and it is important that people check the accounts that they wish to conduct transactions with to build trust in crypto” said Souvik.

Subhrojyoti Mondal, the co-founder and COO of Hornet, said, “Crypto is always decentralised. What people think is that crypto is anonymous, so we come into the picture to de-anonymise it to build trust in doing transactions in crypto. We are using AI to analyse multiple accounts on a daily basis and flagging those that are risky to trade with. People who use our software can find these flagged accounts.”

Hornet is the only 100% indigenously created crypto analysis software in India. While there are other players in the Indian market, they use third party API. What does that mean exactly? Souvik explained that “We have 100% data ownership, but we also know there is another start-up in this domain. They revealed that they are using a third-party API, which is the intelligence you feed to your User Interface; while our data has been collected from scratch by us — making us the only company in India.”

How did Hornet come into existence?

Hailing from Purulia’s Adra, Souvik and Subhrojyoti are both alumni of Kendriya Vidyalaya, Adra. Subhrojyoti worked with the Shipping Corporation of India, but had to leave due to a problem with his eyesight. This is when he worked with a cyber security company for six months before heading over to Chandigarh University for his masters. “Souvik called me one day during my masters and pitched the idea to me and it was just an idea back then — a very broad one — so we worked on it together and refined it. We are now in the final stages before we can deliver a product which will have a massive impact on the national sphere,” said Subhrojyoti about Hornet’s inception.

A hot topic at the last G20 Summit held in India was finding a software to track the flow of crypto currency and identify the users. Hornet was one of 23 start-ups to be selected from India at the TiEcon (The Indus Entrepreneurs) 2024 in Silicon Valley. “We were amongst 23 startups funded by the Government of India, Ministry of IT to participate at the TiEcon Silicon Valley,” said Souvik

This came on the back of the knowledge that the IT ministry was looking for a software like Hornet in early 2023. “The ministry released a statement that they were looking for a platform like ours. That’s when we got incubated with the Bengal Chamber of Commerce and Industry, and since then it has felt like they have held our hands right through,” said Subhrojyoti.

Hornet was incorporated as a company in September 2023 and was included in BCC&I’s tech incubation programme at the Webel BCC&I Tech Incubation Centre, through which they were provided mentorship, a place to work and connections to help them progress. “Without the help of BCC&I and the facilities provided to us it wouldn’t have been possible to become successful so soon,” said Souvik.

What does the future look like for Hornet?

Having won the STPI CHUNAUTI 5.0 and the award for Best Startup at the ABP-INFOCOM 2023, Hornet Decentratech Private Limited got funding of 25 lakhs for 3% equity from Pontaq, a London-based venture capital firm after winning STPI CHUNAUTI 5.0. Hornet also received a grant of Rs 10 lakh from ISI Kolkata.

Working with law enforcement agencies like Kolkata Police and the Special Task Force, Hornet’s founders seem to be living in a thrilling web series, where civilians are assisting law enforcement based on their unique skill sets. “What we do is kind of similar to what is shown in series like Asur and Mr Robot, so it does feel like we are in a show. In the end, it feels good that our software can be used for good,” said Souvik.

Currently valued at $8 million, Hornet is yet to become a self-sufficient software, and R&D continues in the background to feed the software the necessary data to analyse the various forms of crypto-based frauds. “Our aim is to work with every law enforcement agency across the country. We started in Kolkata because it is our home, and this will always be our priority, but in the years to come, we hope Hornet becomes so efficient that it is used by every law enforcement across the country to tackle the growing dangers that come with crypto transactions,” Souvik signed off.

Website link here.