Layer-2 network Starknet has introduced Shadow Accounts, which let users interact with decentralised finance apps without publicly linking that activity to their main wallet. The feature creates separate persistent addresses for each app, funded from shielded balances in the STRK20 privacy pool. Balances and transactions of shadow accounts stay visible on-chain, but the link to the funding wallet is hidden. The first integration is on the decentralised exchange Ekubo.

What it means: Privacy on blockchains is shifting from controversial mixing tools towards designs that try to combine confidentiality with some transparency. Shadow Accounts do not hide transactions themselves but who stands behind them, which resembles holding several bank accounts for different purposes. For professionals and businesses using DeFi, publicly linking every move to one wallet is a real problem because it reveals strategy, holdings and counterparties. In the EU, however, every privacy tool is treated with suspicion. The new anti-money laundering regulation will bar crypto-asset service providers from 2027 from keeping anonymous accounts or handling privacy-enhancing coins. A Greek exchange would need to consider whether funds coming from such pools call for enhanced due diligence. StarkWare's earlier private KYC demo shows the technology can prove identity without exposing documents, and that direction may prove the most useful for regulators trying to balance privacy with oversight. Greek developers working on wallets should follow this design space closely.

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