Aztec Labs Relaunches zk.money Privacy Wallet Amidst Uncertainty

Aztec Labs has relaunched its Ethereum layer-2 privacy wallet zk.money after a brief hiatus, allowing users to make private stablecoin payments. However, the software's legal status remains uncertain due to ongoing prosecutions and unresolved legislation.

The wallet uses Aztec Network to conceal payment activity, but the initial deposit onto Ethereum is still publicly visible. Users can deposit USDC or USDT from Ethereum, which are reportedly converted to DAI upon entry. The wallet has a $2,500 cap on individual deposits, payments, and withdrawals during its launch phase.

Aztec Labs CEO Joe Andrews stated that the assets used by the wallet are stablecoins 'from the beginning.' However, the system's compliance posture is defined by launch-phase limits and sanctions screening. The wallet's frontend screens addresses against sanctions lists, and independent relayers are expected to screen deposit and withdrawal addresses using Predicate.

The legal entity behind the service, Obsidion Labs Limited, describes the system as non-custodial and states that it is not a party to transfers. However, users in certain jurisdictions, including those under 18 or located in the UK or New York, are excluded from using the wallet. Tools such as virtual private networks can be used to bypass these restrictions.

The legal status of non-custodial privacy software remains unsettled due to recent prosecutions and stalled legislation. The CLARITY Act, which included proposed protections for non-custodial software developers, was scheduled for a Senate cloture vote in September 2026. However, the outcome is not clear, and revisions to the bill had removed explicit criminal liability protection for developers of non-custodial and open-source software.