Wall Street's Privacy Paradox on Public Blockchains May Finally Be Solved

NEW YORK, NY – February 17, 2026 – A major barrier that has kept trillions in institutional capital away from public blockchains may be crumbling. StarkWare announced today it is integrating Nightfall, a privacy layer developed by professional services giant EY, into its Starknet blockchain, a move designed to bring enterprise-grade confidentiality to the public ledger of Ethereum.

This integration marks a significant breakthrough in the long-standing quest to make public blockchains practical for large financial institutions. For years, the inherent transparency of networks like Ethereum—where all transactions and balances are publicly visible—has been a non-starter for corporations concerned with competitive risks and regulatory compliance. The partnership between StarkWare and EY aims to resolve this paradox by enabling private payments, confidential treasury management, and secure asset tokenization on public rails.

"Blockchains can offer every institution the equivalent of a private superhighway for stablecoins and tokenized deposits," said Eli Ben-Sasson, co-founder and CEO of StarkWare. "With Nightfall, Starknet will show how that future actually works."

For the first time, enterprises will have a pathway to execute private B2B payments, manage corporate funds, and engage in decentralized finance (DeFi) without broadcasting their strategies to the world, all while maintaining the necessary tools for regulatory oversight.

The End of the Transparency Trade-Off

Public blockchains have long promised unprecedented efficiency, global reach, and deep liquidity. However, for an institution, this transparency is a double-edged sword. Exposing balances, counterparties, and investment strategies creates unacceptable risks, effectively keeping most enterprise capital siloed in traditional, private financial systems.

Nightfall, an open-source layer built on zero-knowledge proof (ZKP) technology, is engineered to eliminate that trade-off. ZKPs allow a user to prove that a transaction is valid without revealing any of the underlying data, such as the sender, receiver, or amount. This means transactions on Starknet can now be private by default.

This unlocks a suite of capabilities previously confined to private, permissioned networks:

• Confidential Payments: Institutions can execute B2B and cross-border payments without exposing sensitive financial data to competitors.
• Private Treasury Management: Corporations can manage treasuries with confidential balances, preventing market speculation or strategic disadvantages.
• Tokenized Assets: The holding and 24/7 transfer of tokenized securities and other assets can occur with complete confidentiality.
• Institutional DeFi: Banks and funds can engage in lending, swapping, and yield-generating strategies on Ethereum's vast DeFi ecosystem without revealing their positions.

"Privacy is the missing ingredient for large-scale enterprise payments on-chain," stated Paul Brody, EY Global Blockchain Leader. "The only scalable way to achieve it is on a public, shared blockchain built on open standards. This integration gets us there."

Walking the Regulatory Tightrope

While privacy is essential for institutions, absolute anonymity is a non-starter for regulators. The specter of illicit finance has led to intense scrutiny of privacy-enhancing technologies in the crypto space. This is where the Starknet-Nightfall integration attempts to thread the needle with a model of "compliant privacy."

The system is not designed for the unchecked anonymity that has drawn regulatory ire elsewhere. Instead, it features selective disclosure mechanisms. By cryptographically binding blockchain addresses to verifiable enterprise certificates, Nightfall allows institutions to transact privately while retaining the ability to provide auditors and regulators with a permissioned view of their activity. This preserves audit trails and supports Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance without sacrificing operational confidentiality.

This approach stands in contrast to both fully transparent public chains and fully opaque private systems. It also seeks to overcome the limitations of permissioned blockchains like Hyperledger or R3 Corda, which offer privacy but often lack the decentralization, composability, and deep liquidity of a public network like Ethereum. By building on a public Layer 2, Starknet aims to offer the best of both worlds: the privacy and control of a private system with the global reach and interoperability of a public one.

A 'Full-Circle Moment' for Blockchain Privacy

The collaboration represents a significant maturation of the blockchain industry. Eli Ben-Sasson, who previously co-founded the privacy-focused cryptocurrency Zcash, described the moment as a pivotal milestone.

"Privacy was once a countercultural idea," he remarked. "Now we're scaling privacy technology developed by EY - an icon of the establishment - on a public blockchain. That's a full-circle moment, and it shows how far this technology has come."

Zero-knowledge proofs have journeyed from a niche cryptographic concept powering privacy coins on the fringe of the ecosystem to a core enterprise technology endorsed by one of the world's largest professional services firms. This shift underscores a broader trend: the professionalization of decentralized finance and its preparation for institutional-grade scale.

With stablecoin and tokenized payment volumes already surpassing $10 trillion in adjusted settlement volume in 2025, the demand for robust, compliant, and private infrastructure is immense. To foster adoption, StarkWare is launching a series of global educational events to demonstrate to institutions how confidentiality, risk management, and public blockchains can finally coexist.

Together, Starknet and Nightfall are not just offering a new product; they are proposing a new blueprint for how global finance operates on-chain: private by default, compliant by design, and built for the scale of global markets.