Weekly Newsletter, 23 May 2025

Zero-knowledge proofs

Zero-knowledge proofs. The KYC unlock every investor is waiting for.

When Coinbase, the first crypto company in the S&P 500, has to admit that insiders walked off with full names, addresses and passport copies of its top 1% customers alongside a $20m extortion attempt, it’s worth asking why that data was ever warehoused in the first place. Traditional KYC frameworks treat personal information like gold bullion: safeguard it behind a thick (digital) vault and assume the guards don’t switch sides. Last week’s breach shows the flaw in that model isn’t the thickness of the vault; it’s the vault itself.

Blockchain technology has the ability to solve this problem. This particular corner of blockchain tech revolves around Zero-knowledge proof systems, that for instance allow an exchange like Coinbase, Uniswap, but also Euronext and NYSE, to verify that “Humphrey is over 18 and not on a sanctions list” without ever seeing Humphrey’s name, date of birth or passport scan. Hence the “Zero-knowledge” moniker. The only thing hat travels across the network is a compact proof that can’t be forged and can’t be reverse engineered. No honeypot, no insider fishing pond, no Monday-morning breach disclosure.

The tools are moving from whitepapers to production: zero-knowledge KYC modules that plug into existing compliance workflows, zero-knowledge login routes that let a user prove control of a Gmail or Apple ID without sharing the underlying token, selective-disclosure credentials that reveal “European resident” but hide the street address. If you marry those primitives with onchain identity registries you can suddenly satisfy regulators, screen bad actors and keep user privacy intact—all while stripping out the overhead of data custody and cyber-insurance. And quite frankly alleviating a burden that investors spend hours and hours on with no great joy.

Reducing a nine-figure liability to a few kilobytes of encrypted math is not just a technical upgrade: it’s a balance-sheet one. More important even, it saves lives. The capital markets of the internet age will clear trades in milliseconds, but they will also treat personal data as radioactive—never stored, rarely touched, always provable. The internet economy will run on blockchain rails with Zero knowledge proofs to keep our data private.

Also this week

Relevant financial updates

Giza*, a company focused on turning machine learning models into smart contracts, enabling secure deployment of serverless on-chain models with no infrastructure maintenance, had its TGE and is currently trading at a $51.3mln FDV
World*, a digital identity project that aims to provide a “globally inclusive identity and financial network owned by most of humanity”, has raised $135mln in a Private Token Sale funding round with investments from Andreessen Horowitz, Mirana Ventures, Selini Capital, Bain Capital Crypto and Arctic Digital
OpenFX*, a company building the infrastructure to transform the FX market from a complex, opaque, and fragmented system into an open, transparent, accessible network, has secured $23mln in funding led by Accel, with participation from NFX, Lightspeed Faction, Castle Island Ventures, Flybridge, and Hash3
Taker*, a blockchain network that utilizes Nominated Proof-of-Liquidity (NPOL) consensus to enable users to stake BTC-based liquidity provider tokens for yield generation and participation in network validation, has raised an undisclosed amount in a Strategic funding round with investments from 071labs
Secured Finance, a company that offers DeFi-related products and services to institutional clients, has raised $4.08mln in a funding round
Bitlayer*, a Layer 2 solution for Bitcoin offering EVM and Ethereum toolchain compatibility and utilizing BTC as the native token, has raised an undisclosed amount in a Strategic funding round with investments from MN Capital
Rover, a decentralized platform for Bitcoin liquid staking on the Bitcoin L2 chain Botanix, has raised $4.10mln in a funding round with investments from Animoca Brands, CMS Holdings, MH Ventures, Infinity Ventures Crypto, Cogitent Ventures and 21 others
Catena*, a company building products that will let trusted software agents send stablecoins across the globe with near-instant finality and ultra-low fees, has raised $18mln in a Seed funding round with investments from Coinbase Ventures, Andreessen Horowitz, Circle Ventures, Breyer Capital and Tom Brady
Roxom, a platform enabling the trading of stocks, ETFs, commodities, and other assets using Bitcoin as the base currency, has raised $17.90mln in a funding round with investments from Borderless Capital, Draper Associates, Kingsway Capital and Ego Death Capital
Arai Systems*, a platform delivering AI-driven co-pilot solutions for Web3 gaming, has raised $4mln in a Seed funding round with investments from Animoca Brands, Sequoia Capital, Folius Ventures, Gate Ventures, Skyland Ventures and 1 other
TrueX*, a cryptocurrency exchange platform offering trading tools, APIs, and liquidity solutions for crypto traders, has raised $11mln in a Series A funding round with investments from Variant, Accomplice, Reciprocal Ventures, RRE Ventures, PayPal Ventures and 2 others
Voya Games*, a company that develops and operates a Web3-based online game, Craft World, where players craft, build, and automate in a dinosaur-themed civilization, has raised $5mln in a funding round with investments from 1kx, Sebastien Borget, RockawayX, Jeffrey (Jiho) Zirlin and Makers Fund
Astar Network*, a decentralized blockchain platform for Web3 that supports both EVM and WebAssembly environments, has raised an undisclosed amount in a Strategic funding round with investments from Animoca Brands

*Underlying TBV portfolio position | Prices as per 23/05

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