Ethereum-based privacy startup 0xbow has raised a $3.5 million seed round led by Starbloom Capital with support from leading venture firms like Coinbase Ventures and BOOST VC as well as angels including Balaji Srinivasan, among others, according to an announcement on Tuesday. 

0xbow is the project behind Privacy Pools, a keystone part of the Ethereum Foundation’s Kohaku wallet initiative. 

Privacy Pools is a protocol designed to compliantly anonymize funds. The project is based on research co-authored by Ethereum founder Vitalik Buterin into Association Sets, essentially lists that prevent bad actors from mixing their funds while also monitoring for suspicious activity.

Buterin previously participated in 0xbow’s March 2024 pre-seed round.

“We’re solving for something the industry hasn’t figured out: how to give people financial privacy without creating a haven for illicit activity,” said Nathaniel Fried, CEO of 0xbow. “You shouldn’t have to choose between privacy and compliance.”

Since launching in March 2025 on the Ethereum mainnet, Privacy Pools has reportedly processed approximately $6 million in transaction volume for more than 1,500 users. The fresh capital will help the project expand beyond the Ethereum mainnet and build additional features.

In July, 0xbow launched support for Sky’s USDS stablecoin in its first extension into “multi asset privacy pools.” It also launched a Tornado Cash Proof of Association pool to allow users to dissociate funds from illicit activity on the storied Tornado Cash protocol.

“Privacy tools have to be built with compliance in mind from day one, not bolted on later,” said Taylor Monahan, an 0xbow advisor and security engineer at MetaMask. “The ASP architecture shows you can design for both privacy and accountability simultaneously.”

Co-founded by Ethereum OGs Ameen Soleimani, Nathaniel Fried, and Zak Cole, 0xbow has also raised funds from Bankless, Number Group, Public Works, and several angels, including Sam Kazemian of Frax and Dan Finlay of Metamask.

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