0xbow, a privacy-focused decentralized finance (DeFi) platform, announced on Tuesday that it has closed a $3.5 million seed round to expand Privacy Pools, its compliant crypto privacy technology.

Privacy Pools leverages smart contracts to batch and mix user transactions, obscuring on-chain links while enabling users to demonstrate compliance with anti-money laundering and other legal frameworks. Its Association Set Provider (ASP) system monitors deposits for suspicious activity without holding users’ funds.

The funding comes shortly after the Ethereum Foundation (EF) added Privacy Pools to its Kohaku wallet. Since launching on Ethereum in March 2025, the protocol has processed $6 million in transactions from more than 1,500 users, completing 1,186 withdrawals, the company said in a press release viewed by The Defiant.

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