Aztec Labs relaunches zk.money on Aztec Network

Aztec Labs has brought back zk.money, a self-custodial wallet designed for private payments on its Aztec Network Ethereum Layer 2, restoring a product it discontinued in 2023 while it focused on building the underlying privacy network.

The relaunched wallet is initially limited to DAI, the decentralized stablecoin, according to Aztec. Users can hold balances and send payments without exposing their balances, transaction amounts, or counterparties on Ethereum’s public ledger. That approach places zk.money in a legally sensitive corner of the crypto market, where privacy-preserving tools face heightened scrutiny even as developers argue that financial confidentiality is a normal user requirement.

Aztec said the new version operates on its newer Layer 2 network rather than the older smart contracts associated with the first zk.money product. The distinction is particularly relevant after exploits of two deprecated Aztec contracts in June, which the company said were unrelated to the current Aztec Network or the new wallet.

A private-payment wallet returns on a new network

The first zk.money launched in 2021 and gave users a way to shield transactions using zero-knowledge cryptography, which lets a network verify that a payment is valid without revealing all of its underlying details. Aztec retired the product in 2023 as it redirected engineering resources toward Aztec Network.

Before its shutdown, the original wallet served more than 75,000 unique wallets and processed over $100 million in transaction volume, Aztec said. Its return suggests the company believes the new network is sufficiently developed to support a consumer-facing payment product rather than only developer infrastructure.

Aztec Network is overseen by the nonprofit Aztec Foundation, while Aztec Labs develops applications and tools that run on the network. That structure separates network stewardship from the commercial development team, though Aztec Labs remains central to the launch and maintenance of zk.money.

The wallet is self-custodial, meaning users retain control of the keys needed to access their funds. Aztec does not present the product as a hosted account or a service that takes custody of user assets. The model gives users greater control, but also leaves them responsible for protecting recovery information and managing their own wallet security.

dai-only launch narrows the first version

The decision to begin with DAI limits the wallet’s immediate use to a single stablecoin, rather than supporting Ether or a range of dollar-pegged assets. DAI is issued through the Maker protocol and is designed to maintain a value close to one U.S. dollar through collateral and protocol mechanisms.

Using DAI also avoids reliance on stablecoins whose issuers can freeze tokens at specific addresses under certain circumstances. USDC, for example, has address-blacklisting capabilities operated by issuer Circle. Aztec has not said whether zk.money will add more assets or when it might do so.

A DAI-only design may make the wallet easier to position as a payments product, since users can transact in a dollar-denominated asset without cryptocurrency price swings affecting the value sent. It also constrains liquidity and choice in the early stage, particularly for users whose assets are held in Ether, USDC, or other tokens.

Aztec said users can deposit from Ethereum-based exchanges directly to a zk.money handle. The company did not identify which exchanges support that flow or specify the technical process for transfers from each platform.

ens-style handles replace long wallet addresses

zk.money users can claim readable names such as bob.zk.money, Aztec said, replacing the long hexadecimal addresses normally associated with Ethereum wallets. The handles are built using Ethereum Name Service technology and can work with applications that support ENS, according to the company.

Users can send payment links or request links tied to those names, which could make private transfers more practical for everyday use than copying and verifying a long address. Aztec also said users can set rules governing who may interact with a handle, adding a permission layer that could help users filter unwanted transfers or limit payment access.

The naming system does not itself create privacy. Its role is to simplify how users find and pay one another, while the Aztec Layer 2 is intended to keep the details of eligible transactions off the public ledger.

Aztec said zk.money is available through a web interface and can also be run locally. The company plans to release a mobile application in the fourth quarter but has not announced a specific date.

defi integrations are planned for the fourth quarter

Aztec also said it expects to connect zk.money to Ethereum-based decentralized finance protocols in the fourth quarter. It did not name potential integration partners or describe which lending, trading, or other DeFi functions would be available.

Those integrations would expand the wallet beyond private transfers, but they also introduce a more difficult design challenge. Private balances and private payment flows can be relatively contained within a Layer 2 environment; connecting them to public Ethereum protocols requires reliable bridges, withdrawal mechanisms, and clear handling of what information becomes visible when assets move between systems.

The company’s June security incident adds weight to that challenge. Aztec said two older, deprecated smart contracts were exploited, while emphasizing that they were not part of the current Aztec Network. Reports on the incidents described more than $4 million in losses across the legacy code, including approximately $2.15 million taken from a retired bridge contract.

The new zk.money is intended as a replacement for products tied to those legacy systems, according to Aztec. Users considering the wallet would need to distinguish between the active network and older contracts that remain deployed but are no longer supported.

privacy tools face a tougher legal environment

The relaunch also arrives after criminal cases involving privacy-focused crypto services have placed developers and operators under intense legal pressure. Federal prosecutors have pursued cases against people connected to mixing and privacy services, arguing in several cases that the tools enabled money laundering or sanctions evasion.

Roman Storm, a Tornado Cash co-founder, was convicted in August 2025 on a charge related to operating an unlicensed money-transmitting business, according to the U.S. Department of Justice. Separate cases against the founders of Samourai Wallet have also centered on allegations that their privacy-focused Bitcoin service facilitated illicit transfers.

zk.money differs technically from a traditional cryptocurrency mixer: it is presented as a wallet running within Aztec’s Layer 2 network, rather than a service built primarily to pool and redistribute public-chain funds. Yet both models address the same underlying demand for reducing the visibility of blockchain activity, a demand that regulators increasingly assess through anti-money-laundering and sanctions frameworks.

Aztec has raised $125 million to date, including a $100 million Series B funding round led by a16z crypto in 2022 with participation from Paradigm, according to the company. It has not disclosed new financing in connection with the zk.money relaunch.