Etherealize closed a $40 million funding round to build infrastructure that enables trading and settlement of tokenized equities on Ethereum while protecting sensitive data with zero-knowledge (ZK) proofs.
Danny Ryan, co-founder and president of Etherealize, told Decrypt that privacy will be a non-negotiable requirement as traditional financial markets move on-chain. “The market does not, and cannot, function fully in the clear,” he said, arguing that institutional on-chain activity — from treasury operations to trading strategies — needs confidentiality.
Zero-knowledge proofs let one party prove a statement is true without revealing the underlying data. Etherealize plans to use ZK technology and other tools to create permissioned, compliant rails for tokenized securities that preserve privacy while enabling settlement on Ethereum.
The company’s pitch is partly strategic: as big financial firms demand privacy guarantees, practical and regulatory-friendly privacy features may gain broader acceptance and eventually benefit everyday users. That said, Ryan acknowledged the regulatory headwinds after recent enforcement actions targeting coin-mixing tools, underscoring that privacy solutions must be designed with compliance in mind.
Not all privacy progress is coming from Etherealize. New layer-1 projects such as Tempo and Arc are exploring built-in or selective shielding for balances and transactions. Still, Etherealize’s approach focuses on applying proven ZK techniques within Ethereum’s ecosystem to meet institutional needs today.
Why it matters: if institutions insist on on-chain privacy, demand could accelerate practical, compliant privacy tooling on Ethereum — a development that may reshape how sensitive financial activity is conducted on public blockchains.
Source: Decrypt. Read the original coverage for full details.