Privacy Crypto Wallet Is Bringing Anonymous Payments to Stablecoins. Will Regulators Allow It?

Aztec Labs is bringing back zk.money, the privacy-focused, self-custodial Ethereum wallet it first launched in 2021 and shut down in 2023. The name is the same, but nothing from the old product has been carried over, including two deprecated contracts attackers drained for about $2.2 million each in June.

Inside the wallet, account balances and transaction details are not written to a public blockchain ledger. “Onchain transactions between two individuals shouldn’t mean publishing your financial history to the world,” said Joe Andrews, CEO of Aztec Labs, in a statement. For this relaunch, Andrews told Gizmodo, “On the assets: it’s actually stablecoins from the beginning.” The specific stablecoin in the system is DAI, which is intended to operate in a more decentralized manner than the more prominent offerings from Circle (USDC) and Tether (USDT).

A zk.money deposit is basically an ordinary Ethereum transfer to a new address. Enhanced anonymity is enabled after the funds move onto the Aztec Network, the Ethereum layer-two network the team spent the shutdown years building. Users claim a handle such as kyle.zk.money, powered by Ethereum Name Service (ENS), then pay or request payment by sharing a link. Aztec Labs says the wallet contracts have no admin key. The original version of zk.money drew more than 75,000 unique wallets and more than $100 million in volume in its first year, according to the company’s FAQ.