Crypto theft has already topped $1 billion just this year alone, and it often happens in full view in real time with nothing anyone can do to stop it. My next guest built a company to change that. Harry Donnelly is the CEO and Founder of Circuit, a security startup that raised $5 million from NYC Partners and notably Lloyd's of London. He holds a master's in financial engineering from MIT where his research focused on DeFi, and before Circuit he worked at JP Morgan and Morgan Stanley. Harry, welcome to the show.
Thank you for joining.
What is Circuit and what are you building?
Circuit is an on-chain risk platform. We looked at all the risks that were happening in crypto — as you said, in real time, funds are disappearing, billions and billions of dollars every year. What we focus on is how do we stop it before it settles? How do we prevent these funds from disappearing in real time? We build different types of technology which look to get ahead of attackers — before funds settle, we sweep funds to safety and get them back into a safe backup destination.
What has changed in the market that makes this so necessary right now?
Crypto theft has gotten more and more prevalent. A lot of new AI tools are being used to scan everything in real time and move funds in real time. The prevention we had before was trying to build a fortress and stop things from happening. But AI is making it much easier to find all the little cracks in the fortress. No matter how big you build your fortress, there is often going to be a little gate left open. What we do is say — even if someone breaches the fortress, how do we detect it? How do we get ahead of it and still sweep funds to safety? We focus on real time prevention and real time movement of funds, rather than waiting to try and stop funds or recover them after they are gone.
What does it actually look like watching this happen?
It is kind of crazy sometimes. The thing about the blockchain is that everything is visible. You can see attacks happening, transaction by transaction by transaction. The biggest hack in history happened last year — Bybit. $1.5 billion was lost in a single evening. You could go that evening and watch on the blockchain what was actually happening — the funds being moved from address to address, publicly visible to anybody in the world. Unlike traditional cybercrime where you need a post-mortem months later, you can see what is happening as it happens. But it also moves much faster — you can move $1 billion in seconds, and once it is gone, it is gone.
What does Circuit believe about security that the rest of the industry has not caught up to yet?
What we saw — and what others are now starting to look at too — is how do you do real time response? Most people are focused on prevention before it happens, or tracking and recovering funds after. The gap in the middle is real time response. When an attack happens, you get an alert, a security team creates a war room, they coordinate and try to sign transactions — but humans move slowly compared to machines. These attacks can happen in seconds or minutes. By the time people get around to it, it is often hours later and the funds are gone. What we do is ask, ahead of time, what do you want to happen automatically if something goes wrong? We automate it. If this happens, sweep the funds to safety immediately.
What is the technology specifically that Circuit is pioneering?
It is that real time response — specifically using pre-signed transactions, the ability to pre-approve transactions to move funds to safety. We call it automatic asset extraction. This technology allows you to not give up trust but still sweep funds to safety in the event that something goes wrong. We are pioneering that in the market.
Why did Lloyd's of London back a crypto startup?
We worked with Lloyd's through their Lloyd's Lab programme and worked directly with different people in the market to understand what they care about most. At the end of the day, insurance is about risk transfer — they pick up the bag when everyone else has lost money. A lot of insurers were looking at crypto and getting scared. They said they did not understand it — it is the most complicated bits of financial markets and the most complicated bits of computer science mashed together. We went in and explained the risks, what goes wrong, and how we can stop it. Lloyd's recognised this as a growth area and backed us as the first crypto startup they ever invested in — their eighth ever investment overall.
If someone holding digital assets for clients is watching this and they are worried, what should they do?
Reach out. Come and talk to us. We speak to clients every week about their security setup — how they are thinking about it, what they need to do, and what could go wrong. It is a very specific area. There are lots of different technologies that should be in place but if you are not aware of them you might be missing something. We can work with you to figure out what is missing, what circuit can fill, and how to protect your clients best.
What is the five to ten year vision?
The vision for blockchain is that you have created this amazing shared ledger that everyone can see and update in real time — the best thing for agents transacting on-chain. But that also needs safeguards. One of the big conversations around the agentic economy is the security around it. How do you make sure that when things go wrong, it does not become irreversible? You need both machine speed and the ability to get things back if something goes wrong.
Awesome. Thanks so much for joining us.
Thank you Johnny. I appreciate it.
