AmericanFortress launches compliant privacy on Arbitrum for institutional DeFi
AmericanFortress has launched beta privacy infrastructure on Arbitrum for institutions and heavy DeFi traders that do not want every transaction sitting in public view.
The system is called Send-to-Name. It uses human-readable FortressNames and automatically generated stealth addresses. AmericanFortress says the setup hides counterparties while still keeping on-chain audit records for the people involved. That distinction matters. The company is targeting institutions and frequent DeFi traders on Arbitrum, a Layer 2 network with heavy use in Ethereum derivatives and liquidity protocols. An Arbitrum Foundation transparency report said the network passed 2.1 billion cumulative transactions in 2025, with TVL near $20 billion and almost $10 billion in stablecoins.
Michal Pospieszalski, AmericanFortress CEO and CTO, said, “Financial infrastructure cannot scale institutionally if every transaction exposes counterparties, balances, and trading behavior in real time.” He also called Arbitrum “one of the most important execution environments in crypto markets” and said the implementation gives financial users privacy without relying on mixers or weakening compliance. My take: that is the whole pitch, not a side detail. AmericanFortress says users can send assets to @names, while the protocol creates one-time stealth addresses between parties. Outside observers lose the clean transaction trail, at least in theory. The sender and receiver still keep access to the records. The firm describes FortressNames as “the first human readable, send to name wallet and secure transaction infrastructure for digital assets,” built to replace “vulnerable wallet strings with one time, stealth addresses” that are “easy to use, fully compliant, and quantum proof.”
The timing is not hard to understand. Arbitrum has become one of the main Ethereum Layer 2s for DeFi. Outside analyses put its TVL around $20 billion and rank it near the top of Layer 2 DeFi market share through late 2025. A Bitquery deep dive said Arbitrum hosts perpetual futures venues such as GMX, which had more than $450 million in TVL on Arbitrum V2 by early 2024. Bitquery also reported that GMX generated millions in fees, including more than $2.74 million on one day in January 2023. Why does this matter? Because when a network has 2.1 billion cumulative transactions and nearly $10 billion in stablecoins, address-level visibility stops being a privacy debate and starts being a trading-risk problem.
AmericanFortress is selling its Universal Privacy Layer as operational risk management, not only as a way to make transactions harder to follow. Most privacy pitches in crypto start with anonymity. That is only half right here. The beta works with existing blockchain systems and is meant to reduce the visibility that can feed frontrunning or copy trading. It also targets surveillance of automated strategies. The firm’s recent cryptographic research describes a patent-pending post-quantum security architecture for hierarchical deterministic wallets. Management says the wider stack combines private transaction rails, naming infrastructure, and quantum-resistant wallet security into “a comprehensive framework for digital asset custody and settlement.” I’ll be honest: the compliance angle is probably more important than the privacy branding. Institutions want privacy, but they also want audit trails and paperwork they can defend. The spot Bitcoin ETF approvals earlier this year, followed by BTC moving past $49,000 in January, showed how quickly markets can react when regulated access gets easier.
As part of the rollout, AmericanFortress is running a “Receive on Arbitrum Privately” campaign to get Arbitrum traders, liquidity providers, and other DeFi users to test private receiving flows in the beta wallet. The first 500 eligible participants will receive a lifetime FortressName, giving them a Send-to-Name identity on the network. The campaign is aimed at Arbitrum-native users already active in perpetual trading, liquidity provision, and fast on-chain market making. Those are exactly the places where public transaction trails can get expensive. Is this just a wallet-name giveaway? No. It is a distribution test for whether private receiving feels normal enough to use repeatedly. Chase Allred, senior partnerships manager at Offchain, the service provider behind Arbitrum, said infrastructure “that improves operational security while remaining compatible with compliant blockchain ecosystems represents an important area of development for the wider industry.” Crypto.news coverage tied that comment to earlier institutional stablecoin and yield products on Arbitrum.
AmericanFortress is also building for automated finance, including AI-driven agents that transact across DeFi rails without a person clicking every button. The company argues that private execution environments will matter more as algorithmic capital allocation and machine trading spread across networks such as Arbitrum, which CoinGecko research has ranked as the largest Layer 2 by TVL share. Counter to the usual advice, full transparency is not always the cleanest market design. Sometimes it just hands the playbook to faster traders. For Arbitrum, this lines up with its push into institutional DeFi, after integrations involving Chainlink oracles and yield-bearing stablecoins. It also gives Arbitrum another point of comparison with other Ethereum Layer 2s. Privacy is still a sensitive topic in crypto, especially after the Tornado Cash sanctions in August 2022. That is why AmericanFortress keeps stressing compliance. Institutions may not need perfect anonymity. They need privacy they can explain to lawyers, auditors, and regulators without dreading the meeting.
In our system, the person chatting with you and the person sending you money?
1000% the same identity.
Cryptographically proven. @MehowHacks explains 👇 pic.twitter.com/ehFt1hCzQB
— AmericanFortress (@Americanfort_io) May 25, 2026
What this means
This launch points to a more usable version of DeFi privacy: not full anonymity, but privacy with records. That is probably the only version large financial firms can go near. Traditional finance does not want every trade copied in real time, but it also cannot operate inside a black box. Yes, that sounds contradictory. It is also how regulated markets work. AmericanFortress is trying to live in that awkward middle. If it works, Arbitrum could become more practical for funds, market makers, and desks that have avoided DeFi because public wallets reveal too much. For traders, the immediate appeal is simpler: less exposure to frontrunning and copy trading. Less strategy surveillance too. TVL on Arbitrum could rise if the product gets real usage, though one privacy launch is not a magic switch for institutional capital. I would watch the boring metrics first: wallets, transaction volume, repeat use, and integrations.
Investors should watch Arbitrum’s TVL and transaction count over the next few months, especially for signs of institutional flows rather than short campaign-driven activity. If AmericanFortress gains traction, it could help sentiment around ARB, Arbitrum’s native token. Partnership announcements will matter too, but only if usage follows. The bigger question is whether regulators accept this model of verifiable privacy. Guidance from the SEC, CFTC, or other agencies could help AmericanFortress, or make the category harder to build. We will know soon enough. The next few quarters should show whether compliant privacy is something institutions actually use, or just something people say they want on panels.