Privacy Is Becoming a Bigger Issue for Institutional DeFi — AmericanFortress Wants to Fix It on Arbitrum

As more sophisticated financial activity moves on-chain, one problem continues to follow the growth of decentralized finance: every transaction is public.

Wallet balances, counterparties, trading behavior, treasury activity, and transaction flows remain fully visible across most blockchain ecosystems — a level of transparency that creates growing concerns for funds, traders, DAOs, and increasingly, automated financial systems operating at scale.

AmericanFortress believes that model becomes difficult to sustain as institutional participation accelerates.

This week, the company announced the launch of its privacy-focused infrastructure beta on Arbitrum, introducing a new system designed to make on-chain transactions more private without relying on mixers or custodial obfuscation tools.

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Bringing Stealth Address Infrastructure to Arbitrum

The rollout brings AmericanFortress’ “Send-to-Name” infrastructure to Arbitrum, allowing users to send assets using human-readable FortressNames instead of directly exposing recipient wallet addresses.

Behind the scenes, the system generates stealth addresses intended to reduce transaction visibility while preserving auditability between counterparties.

The launch comes as Arbitrum has grown into one of the largest execution environments in decentralized finance, securing more than $15 billion in total value locked while hosting major trading ecosystems like GMX and other high-volume DeFi applications.

“Financial infrastructure cannot scale institutionally if every transaction exposes counterparties, balances, and trading behavior in real time,” said Michal Pospieszalski, CEO and CTO of AmericanFortress.

“Arbitrum has become one of the most important execution environments in crypto markets, and this implementation delivers a privacy layer designed for serious financial activity without relying on mixers or compromising compliance requirements.”

Privacy Without Mixers

The company says the infrastructure was designed specifically for environments where operational privacy matters but regulatory concerns still remain important.

Unlike transaction mixers, which have drawn increasing scrutiny from regulators in recent years, AmericanFortress positions its system as a compliant privacy framework that preserves visibility between intended counterparties while reducing broader public exposure.

That distinction may become increasingly important as larger institutions continue experimenting with on-chain settlement, treasury management, algorithmic trading, and automated capital allocation systems.

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Post-Quantum Security and AI-Driven Finance

AmericanFortress also recently published research detailing a patent-pending post-quantum security architecture for hierarchical deterministic wallets, part of a broader infrastructure stack combining:

• privacy-preserving transaction systems

• naming infrastructure

• quantum-resistant wallet security

into what the company describes as a long-term framework for digital asset custody and settlement.

The company believes privacy-preserving infrastructure could become increasingly important as AI-driven agents begin operating autonomously across blockchain networks.

As algorithmic trading systems, automated treasury management, and machine-driven financial activity continue expanding across crypto markets, AmericanFortress argues that fully transparent execution environments may create growing security and operational challenges for both humans and autonomous systems alike.

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Arbitrum Users Testing the Beta

The launch also includes a new community campaign called “Receive on Arbitrum Privately,” encouraging users to test the beta wallet experience.

The first 500 eligible participants will receive a lifetime FortressName, with the initial rollout targeting Arbitrum-native DeFi users including perpetual traders, liquidity providers, and active on-chain market participants.

According to Chase Allred, Senior Partnerships Manager at Offchain, operational privacy is becoming a larger discussion as more complex financial activity migrates on-chain.

“Privacy and usability are increasingly important as more sophisticated financial activity moves on-chain,” Allred said.

“Infrastructure that improves operational security while remaining compatible with compliant blockchain ecosystems represents an important area of development for the wider industry.”

For AmericanFortress, the goal is not simply hiding transactions — it’s building a privacy layer capable of supporting the next generation of institutional and machine-driven finance.