Aztec Labs has relaunched zk.money, a self-custodial privacy wallet that hides payment amounts, balances and recipients on its Ethereum Layer 2, three years after shutting the original product down. The wallet went live Tuesday and lets users send stablecoins through readable names such as bob.zk.money or through payment links instead of long wallet addresses.
The new version runs on Aztec Network, the privacy-focused Layer 2 the team built after retiring the first zk.money in 2023. Balances, payment amounts and counterparties never appear on a public ledger. Deposits from Ethereum remain visible, so anyone watching the chain can see that money entered the system, but activity inside the network stays private.
Stablecoins only, converted to DAI
Users can deposit DAI, USDC or USDT from Ethereum. USDC and USDT are converted into DAI on the way in, leaving DAI as the only currency used inside the wallet. A deposit costs 35 cents plus Ethereum gas fees, and a withdrawal costs 20 cents. Users get 100 sponsored transactions a day inside the wallet.
Aztec Labs chief executive Joe Andrews framed the return as a response to default transparency on public blockchains. “Onchain transactions between two individuals should not mean publishing your financial history to the world,” Andrews said in a statement. “zk.money is a self-custodial crypto wallet where your financial history stays yours.”
The wallet is non-custodial, meaning Aztec says its operators cannot spend, move or freeze user funds. A sealed server co-signs each operation but cannot spend funds on its own, according to the project’s documentation.
How payments work
Account names are built on Ethereum Name Service technology, so handles resolve wherever ENS support exists. Users secure their tags with a passkey that syncs across devices rather than relying on a seed phrase for that part of the account. Each resolution of a name produces a fresh deposit address, with a zero-knowledge proof verifying that the address was derived correctly from the registration. The address on Ethereum does not reveal which tag sits behind it, so a user can keep sharing the same name while the destination underneath keeps changing.
Users can send funds from Ethereum-based exchanges directly to a zk.money handle. Aztec also plans to connect the wallet with DeFi protocols on Ethereum and says it is working with partners it has not yet named, with integrations expected in the fourth quarter.
Early limits and unfinished audits
The alpha release carries tight constraints. Every deposit, payment and withdrawal must stay below $2,500, and all users share a $50,000 daily deposit ceiling that replenishes over time. Raising the caps would require deploying a new contract and users moving over to it. The documentation describes the limits as a safeguard for the launch phase.
The wallet also screens deposit and withdrawal addresses against a sanctions policy, including the addresses funds come from and the addresses withdrawals go to. Users in the United Kingdom and New York are barred by the terms of service, along with users in sanctioned countries. The legal entity named in the terms is Obsidion Labs Limited, not Aztec Labs itself.
Aztec’s own documentation warns the software has not been fully audited and that critical bugs are possible. Contributors disclosed a critical flaw in the network’s V5 proof system in August, and a fix is planned for V6. Andrews said zk.money will launch before that fix lands, with a separate system called Oxide checking payments for errors caused by software bugs in the meantime. Users will be able to move to the updated network once the fix is ready.
Why it shut down, and why it is back
The original zk.money launched in 2021 and processed more than $100 million in volume across 75,000 wallets before Aztec retired it in 2023. Andrews told The Block the shutdown was not about demand failing. The old system was hard to extend and could not scale globally, he said, so the team redirected everything into building a decentralized network designed for private computation from the ground up.
That network is now overseen by the nonprofit Aztec Foundation, while Aztec Labs builds products on top of it. Private smart contract execution went live on September 21, eight days before the wallet relaunch. The company has raised $125 million to date, including a $100 million Series B led by a16z crypto and Paradigm in 2022.
A mobile app is planned for the fourth quarter without a set date. The wallet runs in a browser or locally on a user’s machine.
A regulated stablecoin inside a privacy wallet
The relaunch lands in a changed legal climate. Tornado Cash was sanctioned by the US Treasury in 2022, and developers behind the Samourai Wallet faced prosecution. The CLARITY market structure bill, which included protections for non-custodial developers, failed a Senate cloture vote this month. Asked about the legal climate, Aztec pointed to sections of the wallet’s terms covering its non-custodial architecture and screening practices.
Aztec is not the only project in this space. Railgun has built a following as a privacy protocol for DeFi transactions on Ethereum, and other teams have tried zero-knowledge shielded transfers. The difference Aztec claims is that its wallet sits on a network built for private computation rather than a privacy layer added to a general-purpose chain.
There is also a philosophical wrinkle: the only asset inside the wallet is DAI, a stablecoin that has drifted toward centralized reserve assets over the years. Privacy advocates get shielded transfers, but the money inside them answers to a regulated issuer. Ethereum’s own roadmap is moving the same direction, with developers weighing changes for a planned 2027 upgrade that would let privacy apps handle approvals and fees with less outside help, and co-founder Vitalik Buterin has spoken publicly about the risks of fully traceable financial activity.
Whether the wallet finds an audience depends on whether users care enough about hidden balances to accept the caps, the fees and the audit risk. The first version pulled in $100 million in volume, and the new one starts with more infrastructure under it. Regulators have not said where they stand.