CipherOwl, an emerging cryptocurrency compliance startup, was founded by engineers who previously worked at Coinbase and Cruise.
They managed to raise $15 million Seed financing.
This funding will help them enhance their AI-based methods for blockchain monitoring and risk assessment.
Support and investors
General Catalyst and Flourish Ventures led the funding round. It also included contributions from Coinbase projects And Tanveer Capital.
The company has not published its post-money valuation.
CipherOwl It was founded in 2024 by former Coinbase engineering and compliance managers Liu Liang and Ming Jiang.
Liang and Jiang designed the company to fill new and urgent gaps in cryptocurrency compliance tools that have developed during the increasing institutional entry into digital assets.
What CipherOwl does
CipherOwl specializes in AI-powered transaction monitoring systems for cryptocurrency-embedded financial institutions.
Their system uses generative artificial intelligence to automatically flag transactions as suspicious.
Most importantly, the system provides plain language alerts to help human compliance officers work more efficiently.
The company considers itself “AI-driven” because it truly integrates machine learning deeply into its system architecture, rather than just treating it as an add-on.
Liang and Jiang describe the cryptocurrency ecosystem as a “dark forest” involving pseudonymous and cross-chain flows, making traditional anti-money laundering (AML) solutions ineffective.
With built-in clients like Coinbase, OKX, and some public sector or law enforcement clients (some yet to be disclosed), CipherOwl serves a “dark forest” ecosystem.
Despite a small workforce of 8 people, the company is very optimistic about its product development and recruitment to drive growth.
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Competitive landscape and positioning
CipherOwl enters a competitive arena filled with popular blockchain analytics and compliance firms like Chainalogy, Elliptic, and TRM Labs.
What sets this startup apart is its focus on an AI-first approach and the clarity it brings to alerts.
They believe it can give them an advantage over more traditional players.
Mark Bhargava, managing director at General Catalyst, noted that having an AI-driven architecture can lead to significant long-term benefits in terms of accuracy, flexibility and cost efficiency.
In discussions, CipherOwl leaders stress that many existing compliance tools tend to be labor-intensive, unclear, or disjointed.
In turn, their vision is to create a modular, programmable intelligence layer for cryptocurrency compliance.
A system that fits seamlessly into enterprise workflows and can scale across different blockchain networks.
Use of funds and next steps
CipherOwl notes that the new funds will be used to grow the engineering, product, and compliance teams.
In addition, they will also speed up the feature development process; and expanding integration with exchanges, banks, custody providers and regulators.
Although the company did not provide a specific roadmap or specific timelines, it expects to expand technically – adding more series and models – and commercially over the next 12 to 18 months.
