Cycles launches capital-efficient clearing platform for crypto trading firms

Coinciding with the platform's debut, Cycles has closed a pre-seed funding round co-led by CMCC Global and Maven 11, with participation from Nascent and other investors. Cycles Prime functions as a capital-efficient clearing platform, enabling firms to securely net and clear bilateral obligations without requiring collateral, escrow, or a central counterparty. The launch comes as crypto markets continue to adapt following the 2022 collapse of several major firms, which triggered a 68% contraction in industry credit markets, equivalent to a USD 23.7 billion decline. The platform is designed to serve a broad range of institutional participants, including prime brokers, OTC desks, exchanges, and trading firms, providing a low-overhead complement to existing settlement systems. By enabling multilateral netting of short-term settlement obligations – typically within 24 hours – Cycles Prime reduces counterparty exposure and liquidity stress while maintaining firms’ existing trading relationships and workflows. According to the CEO of Cycles, clearing between trading firms is where capital inefficiency and risk are most acute and the company’s goal is to rebuild the foundation for a sustainable credit market, starting here and expanding to broader financial infrastructure. Unlike traditional clearinghouses, Cycles Prime operates without collateral posting or counterparty substitution, integrating seamlessly with current systems. Firms retain full discretion over what transactions to include, while daily reports assist in reconciliation and risk management, according to the official press release. The platform’s privacy architecture, powered by the Cycles protocol and its open-source Quartz framework, combines blockchain-secured Trusted Execution Environments (TEEs) with zero-knowledge proofs to ensure privacy and correctness. This technical foundation supports a range of future financial applications and aligns with Cycles’ goal of maximising cleared obligations with minimal capital. Proceeds from the funding round will support continued development, expansion of the pilot program, and onboarding of institutional partners. The pilot is currently limited to select trading firms, who receive hands-on onboarding and direct input into the product roadmap.