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The company has already attracted customers, including Coinbase and the crypto exchange OKX, since it began selling its product in December.
There are also some unnamed customers from the public sector and law enforcement, according to the report by Fortune.
CipherOwl is looking to carve out its own niche in a rather crowded space that includes industry giants Chainalysis, Elliptic, and TRM Labs, among others.
CipherOwl, a crypto compliance startup using artificial intelligence to make it easier for users to spot fraudulent activities, has raised $15 million in a seed round co-led by General Catalyst and Flourish Ventures. The fundraising also attracted participation from the likes of Coinbase Ventures, Enlight Capital, and others.
Founded by former Coinbase employees, Ming Jiang and CEO Leo Liang, CipherOwl, which started selling its product in December, claims to have already attracted top-tier customers, including Coinbase, the crypto exchange OKX, as well as unnamed customers from the public sector and law enforcement, Fortune reported.
CipherOwl is looking to carve out its own niche in a rather crowded space that includes industry giants Chainalysis, Elliptic, and TRM Labs, among others. While some of the industry stalwarts use generative AI to speed up their processes, Ming and Leo built their platform with AI integration from the ground up, Bhargava, managing director at General Catalyst, told Fortune.
“I would just expect that an AI-native team that’s implementing these improvements is most likely to benefit from all of this new technology rather than some of the incumbents,” he said.
According to the announcement, when CipherOwl flags a transaction, it uses AI to generate an easy-to-read report, explaining the reason for the flagging, thus making it easier for human reviewers to diagnose why the crypto transfer was suspicious.
According to co-founder Jiang, this makes the process less expensive and more efficient.
CipherOwl is looking to get ahead of the curve as fintechs continue to shift towards on-chain payments, providing compliance tools that align their customers’ operations with emerging trends in finance.
“As we see a shift from a fiat ecosystem to a more on-chain payment infrastructure, there’s going to need to be the same—or if not even more sophisticated—compliance and fraud systems,” John Onwualu, principal at Flourish Ventures, told Fortune.
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