StarkWare has rolled out a new privacy framework for tokens on Starknet that aims to balance confidentiality with compliance. The company’s STRK20 token standard lets users hide on-chain balances and transaction amounts, while preserving tools that authorized parties can use for audits and regulatory checks.
Announced Tuesday, STRK20 adapts ERC-20 functionality for Starknet with optional “shielded” balances and transactions. StarkWare says the design hides financial details from the public ledger but keeps disclosure mechanisms available under controlled conditions. Co-founder and CEO Eli Ben-Sasson emphasized the approach is risk-based rather than a blanket promise of regulatory approval—privacy is conditional and paired with screening and disclosure features.
How it works: assets are screened before entering shielded pools, and viewing-key technology enables targeted access to transaction data when lawful requests or compliance demands require it. Unlike privacy-first coins that try to obscure most on-chain data, STRK20 explicitly builds in accountability tools so institutions, exchanges and regulators can perform necessary reviews.
STRK20 is part of a wider trend. On June 8, Sui opened public testing on Devnet for confidential transfers that encrypt token balances and transfer amounts while leaving sender/recipient addresses, token types and timestamps visible on-chain. Sui says authorized parties can access encrypted data for audits and compliance, with a Testnet rollout planned later this year. Both efforts demonstrate a shift toward “selective privacy”—protecting sensitive amounts while keeping enough transparency for oversight.
That movement has been driven in part by recent real-world frictions. Earlier this month, blockchain privacy firm Zama accelerated its compliance roadmap after roughly $12.5 million in USDC held in its confidential wrapper was temporarily frozen under a court order; the restriction was later lifted once the legal issue was resolved. Zama highlighted disclosure tools and coordination procedures for encrypted transactions in its response.
Privacy projects have also faced technical risks. Developers behind Zcash disclosed a vulnerability that could have enabled counterfeit tokens; an emergency network upgrade in early June addressed the flaw and there’s no evidence it was exploited. Zcash’s team warned that reconstructing historical activity inside shielded pools can be difficult after vulnerabilities are revealed—underscoring the trade-offs between strong confidentiality and the ability to verify or remediate problems.
Together, the new STRK20 standard and Sui’s confidential transfers illustrate how blockchain developers are moving toward privacy systems that are auditable by design. The challenge now is striking the right balance: giving users meaningful privacy while ensuring institutions and regulators can perform necessary checks when warranted.
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