Privacy-focused blockchains embrace compliance features

StarkWare and Sui have introduced new privacy-focused features designed to protect transaction data while allowing authorised disclosures for regulatory and auditing purposes.

StarkWare launched STRK20 on Starknet, a privacy framework for ERC-20 tokens that enables users to shield balances and transaction activity while retaining mechanisms for disclosure under specific circumstances.

“Compliance-ready does not mean STRK20 itself determines legal compliance or guarantees regulatory approval,”

StarkWare co-founder and chief executive, Eli Ben-Sasson, said.

Ben-Sasson said the framework uses a risk-based approach where privacy is conditional rather than absolute, incorporating screening requirements before funds enter shielded pools and allowing disclosures through viewing keys when legally required.

Meanwhile, Sui has launched a public beta of confidential transfers, a feature that hides transaction amounts while permitting authorised parties to access information for compliance, auditing and investigative purposes.

The launches highlight a broader industry trend away from fully anonymous privacy systems and towards models designed to balance confidentiality with institutional and regulatory requirements.

The shift comes amid growing scrutiny of privacy-focused blockchain projects, including Zama's efforts to accelerate compliance measures following a temporary court-ordered freeze of funds and Zcash's recent disclosure of a vulnerability that could have allowed counterfeit tokens to be created undetected before being patched through an emergency network upgrade.

At the time of reporting, Sui price was $0.7429.