Cycles Raises $6.4M to Build the Open Clearing Network for On-Chain Finance

Cycles, a Toronto-based startup focused on developing a privacy-preserving clearing network for cryptocurrency markets and stablecoin transactions, has successfully raised $6.4 million in a funding round led by Blockchange Ventures. This investment round, which also saw participation from Coinbase Ventures, Compound VC, and Primitive Ventures, brings Cycles' total funding to $8.7 million, following a $2.3 million pre-seed round in 2025. The new capital will be utilized to accelerate the development and rollout of the Cycles clearing network, as well as to scale its initial offerings, including Cycles Prime, which enables trading firms to manage over-the-counter (OTC) obligations privately across the network.

Cycles is addressing a critical gap in the cryptocurrency market, where the absence of a robust clearing infrastructure has led to inefficiencies and heightened counterparty risks. Traditional financial systems utilize clearing mechanisms to offset obligations between parties, allowing only the net difference to be settled. In contrast, the crypto market largely operates on a gross basis, necessitating full pre-funding of trades and resulting in liquidity bottlenecks. Cycles aims to remedy this by providing a multilateral clearing network that enhances capital efficiency and mitigates risks associated with rapid market movements. The startup is led by Ethan Buchman, co-founder of Cosmos, and is positioned to redefine how value is settled in the digital asset space.

The Cycles Prime product is designed specifically for institutional trading firms, enabling them to net their OTC obligations without the need for collateral or the movement of assets. This capability is expected to significantly reduce liquidity requirements and counterparty exposure, thereby enhancing the overall efficiency of trading operations. The initial launch partners for Cycles Prime include Lynq and FalconX, both of which are expected to leverage the platform's capabilities to optimize their trading strategies.

The implications of Cycles' funding and product offerings extend beyond individual firms. The startup's approach to clearing could serve as a foundational layer for a new ecosystem of capital-efficient financial applications within the cryptocurrency space. By facilitating private net settlements, Cycles may enable businesses and individuals to manage their cash flows more effectively, particularly in the context of stablecoin payments. The launch of Cycles Pay, which aims to streamline payments while maintaining user privacy, further illustrates the company's commitment to modernizing financial infrastructure.

As the cryptocurrency market continues to evolve, the introduction of clearing solutions like those offered by Cycles could play a pivotal role in enhancing market stability and efficiency. The recent volatility observed in the crypto markets underscores the necessity for improved risk management tools and infrastructure. With increasing global adoption of digital assets, Cycles is well-positioned to become a standard for clearing and settlement processes, potentially transforming how value is exchanged in decentralized finance.