CipherOwl, founded by the team that built Coinbase’s on-chain data and compliance platform, this week announced $15 million in seed financing co-led by General Catalyst and Flourish Ventures, with participation from Coinbase Ventures, Sancus Ventures, Enlight Capital, OKX Ventures, AME Cloud Ventures, Road Capital and Predictive VC.
The company is emerging from stealth with an AI-native intelligence layer that transforms blockchain data into explainable, auditable decisions for institutional compliance. The funding will accelerate development of this platform—advancing its ability to turn blockchain data into evidence-backed decisions and investigations that institutions can trust.
CipherOwl addresses a critical challenge institutions face when adopting crypto: as blockchain transaction volumes explode, manual compliance processes can’t keep pace. The company’s AI-powered intelligent layer automatically screens millions of transactions, investigates suspicious activity, and generates audit-ready reports, reducing what previously took compliance teams weeks into minutes.
“On-chain is the new rail for moving value, and volumes are on track to grow 100x by 2030,” said Leo Liang, co-founder and CEO of CipherOwl. “Legacy platforms weren’t built for always-on, permissionless, and fast-evolving activities. We need robots/AI agents that monitor flows and act with proof. CipherOwl turns raw blockchain data into evidence-backed, explainable decisions that institutions can trust and regulators can audit.”
The compliance challenge in crypto is unique: unlike traditional banking, blockchain transactions are public, permanent, and operate across dozens of different networks simultaneously. A single suspicious transaction might bounce through multiple blockchains, making it nearly impossible for human analysts to trace manually.
Traditional compliance tools were designed for closed banking systems with centralized oversight. Blockchain networks operate 24/7 across global jurisdictions, with transaction volumes that can spike unpredictably. Manual investigation methods that work for traditional finance break down when applied to cross-chain activity involving hundreds of different protocols and token types.
“We’re at an inflection point where on-chain infrastructure is moving into mainstream financial services. But adoption will only accelerate if compliance infrastructure keeps pace,” said John Onwualu, principal at Flourish Ventures. “CipherOwl was built with this in mind, delivering explainable and auditable outcomes regulators can trust and the automation institutions need to scale.”
CipherOwl’s solution centers on what the company calls its “SR3 stack” – Screening, Reasoning, Reporting, and Research, four integrated modules that automate the whole compliance workflow from detection through resolution. An AI orchestration layer coordinates these modules to ensure every decision is explainable and auditable, automatically escalating suspicious activity while maintaining the evidence trails that regulators require.
The solution treats blockchain data as the primary source of truth, delivering consistent, reproducible outcomes that scale with institutional requirements without sacrificing the explainability that compliance teams need to defend their decisions.
Several trends are converging to make automated compliance essential:
Volume explosion: On-chain transaction volume is projected to grow 100x by 2030 as traditional payments migrate to blockchain rails.
Regulatory scrutiny: Governments worldwide are demanding the same anti-money laundering standards applied to traditional finance.
Institutional adoption: Major corporations and financial institutions need enterprise-grade compliance to participate in crypto markets.
“The current approach of manual transaction review simply won’t scale,” said Marc Bhargava, managing director at General Catalyst. “CipherOwl has built the intelligence layer that institutions need to confidently operate in an AI-native financial system.”
Despite operating in stealth mode, CipherOwl has already secured customers, including Coinbase, OKX, 0x, Cobo, and Story Protocol. Multiple deployments are handling production workloads with outputs designed for audit trails, supervisory exams, and board reporting.
The founding team brings deep crypto infrastructure and compliance expertise. CEO Leo Liang previously served as head of data platform and services at Coinbase, building the company’s petabyte-scale on-chain data and compliance infrastructure. Co-founder and CPO Ming Jiang led product for Coinbase’s on-chain data infrastructure and compliance services.
CipherOwl is designed for a world where both humans and AI agents transact on blockchain networks. The company’s APIs enable other AI systems to programmatically request compliance checks, investigations, and reports, facilitating automated workflows while maintaining human oversight and ensuring regulatory compliance.
“Compliance can’t be a checkbox. It must be scientific: evidence-based, data-driven, and explainable,” said Liang. “By grounding AI agents in blockchain truth, we give institutions decisions they can trust and defend.”
The funding will accelerate engineering hiring, expand blockchain network coverage, and deepen partnerships with institutions and public sector agencies. CipherOwl plans to support additional blockchain networks and enhance its AI capabilities to stay ahead of rapidly evolving compliance requirements.