Terminal 3, a Hong Kong-based Web3 start-up specializing in decentralized data privacy, has raised US$8 million in seed funding to fuel its expansion and upcoming product launches.

The fundraising round was co-led by Illuminate Financial and CMCC Titan Fund, with backing from Animoca Brands, Progression Fund, IDG Blockchain and Cherubic Ventures. Existing investors, including 500 Global, Consensys Mesh, Hard Yaka and BlackPine, also participated.

“The market for agentic AI [artificial intelligence using digital assistants to achieve specific tasks] is expected to grow by 4,000% over the next decade,” notes Yat Siu, CEO of Animoca Brands, highlighting the critical need for secure infrastructure to manage sensitive data.

Luca Zorzino, general partner at Illuminate Financial, says: “Terminal 3 is pivotal in helping organizations unleash the power of digital credentials while ensuring digital trust.”

And Gary Liu, Terminal 3’s co-founder and CEO, adds: “Never has there been greater demand for user data, putting the privacy of billions at risk. At the same time, organizations face mounting compliance challenges as data volumes explode. This funding will fast-track our solutions for businesses navigating the next wave of agentic AI.”

Terminal 3, founded in 2023 by Liu, alongside Malcolm Ong and Joey Liu, has created a privacy-first technology stack that integrates blockchain storage and zero-knowledge proofs, enabling businesses to access essential customer data without the regulatory risks tied to storing it themselves.

The Terminal 3 team, which previously drove the South China Morning Post’s digital transformation, has already stored nearly six million decentralized user profiles in its proprietary Oracle system.

Even risk-averse institutions like banks, Liu tells The Asset, are being drawn to Terminal 3’s model. “We actively reduce regulatory risk by preserving privacy while enabling identity verification,” he notes. “Our platform supports key use cases, such as portable onboarding and compliance with KYC [know-your-customer] and accredited investor standards, allowing banks to maintain AML [anti-money laundering] and CFT [countering the financing of terrorism] obligations without sacrificing privacy.”

On the subject of Terminal 3’s ideal customers, Liu points to a broad base, but says regulated financial institutions handling digital assets are feeling the most immediate pressure. “They are caught between stricter rules like the crypto "travel rule" and the growing privacy demands of Web3 users. Our solution was designed to offer a compliance-ready, interoperable solution.”

On the bigger misconceptions in the space, Liu is clear: “Privacy and compliance are not at odds, effective privacy technologies actually enhance compliance,” he says, adding that businesses should prioritize access to data, not ownership. “Retaining unnecessary data adds cost and risk, our zero-knowledge approach gives companies what they need without the burden of custody.”