StarkWare launches privacy tokens that still allow compliance checks

StarkWare has launched a new privacy framework for Starknet tokens that allows users to conceal balances and transaction details while preserving tools for compliance reviews and regulatory disclosures.

According to StarkWare, the newly released STRK20 standard brings privacy features to ERC-20 tokens on Starknet by enabling users to shield balances and transaction information on-chain.

The framework was announced on Tuesday as developers across the crypto industry continue looking for ways to offer transaction privacy without removing oversight mechanisms relied upon by institutions, exchanges, and regulators.

Providing details on how the system works, StarkWare co-founder and CEO Eli Ben-Sasson notes that STRK20 should not be viewed as a guarantee of regulatory approval or legal compliance. Instead, he said the framework follows a risk-based approach where privacy remains conditional.

Ben-Sasson explained that screening occurs before assets enter shielded pools and that viewing-key technology can be used to disclose information when lawful requests require access.

Unlike traditional privacy-focused cryptocurrencies that seek to obscure most transaction data, STRK20 introduces disclosure tools designed to balance confidentiality with accountability. 

Under the model described by StarkWare, transaction details remain hidden from the public while authorized disclosure remains possible under specific circumstances.

Privacy tools are adding disclosure mechanisms

Elsewhere in the sector, developers are adopting similar approaches to encrypted transactions. According to an announcement published on June 8, Sui opened public testing for confidential transfers on its Devnet. The feature encrypts token balances and transfer amounts while leaving sender and recipient addresses, token types, and transaction timestamps visible on-chain.

As reported by crypto.news, Sui stated that authorized parties can access relevant data when required for auditing or compliance purposes. A Testnet rollout is scheduled for later this year.

Rather than removing transparency entirely, the Sui design keeps selected transaction information visible while concealing financial details. The network described the system as a way to support privacy requirements without limiting access for compliance teams and auditors.

Taken together, the launches from StarkWare and Sui highlight how blockchain developers are increasingly incorporating controlled disclosure features into privacy products instead of relying on complete anonymity.

Recent events have increased focus on oversight

At the same time, several privacy-focused projects have recently faced scrutiny over compliance and operational safeguards.

Earlier this month, blockchain privacy company Zama said it would speed up work on its compliance roadmap after approximately $12.5 million in USDC held within its confidential USDC wrapper was frozen under a court order. According to Zama, the restriction was later removed once the underlying legal request was resolved.

Following the incident, the company highlighted disclosure tools and regulatory coordination procedures available for encrypted transactions.

Meanwhile, developers behind Zcash recently disclosed a vulnerability that raised concerns about the possible creation of counterfeit tokens. According to the project, an emergency network upgrade completed in early June addressed the issue, and no evidence of exploitation has been found.

Zcash developers noted that reconstructing historical activity inside shielded pools can be difficult after vulnerabilities are disclosed, a limitation that has renewed discussion around how privacy systems can provide confidentiality while still supporting verification and oversight when needed.