AmericanFortress launches compliant privacy layer on Arbitrum for institutional DeFi

AmericanFortress has launched a beta privacy infrastructure on Arbitrum, promising compliant, mixer-free transaction shielding for institutional and high-volume DeFi users.

AmericanFortress has rolled out its beta privacy infrastructure on Arbitrum, introducing a Send-to-Name system that uses human readable FortressNames and auto generated stealth addresses to conceal counterparties while preserving bilateral auditability on chain. The company frames the launch squarely at institutions and high frequency DeFi participants operating on Arbitrum, a Layer 2 network that has emerged as one of Ethereum’s largest venues for on chain derivatives and liquidity protocols. According to an Arbitrum Foundation transparency report, the network processed more than 2.1 billion cumulative transactions in 2025 with total value locked hovering near $20 billion and almost $10 billion in stablecoins, underlining the scale of the activity AmericanFortress is targeting.

“Financial infrastructure cannot scale institutionally if every transaction exposes counterparties, balances, and trading behavior in real time,” AmericanFortress CEO and CTO Michal Pospieszalski said, arguing that Arbitrum has become “one of the most important execution environments in crypto markets” and that the new implementation “delivers a privacy layer designed for serious financial activity without relying on mixers or compromising compliance requirements.” The system allows users to send assets to @names while the protocol generates one time stealth addresses between counterparties, shielding transaction flows from third party observers but keeping records available to those directly involved. On its website, the firm describes FortressNames as “the first human readable, send to name wallet and secure transaction infrastructure for digital assets,” designed to replace “vulnerable wallet strings with one time, stealth addresses” in a way that is “easy to use, fully compliant, and quantum proof”.

Privacy layer for an institutional Arbitrum

The launch comes as Arbitrum continues to solidify its position as the dominant Ethereum Layer 2 for DeFi, with external analyses citing total value locked around $20 billion and leadership in Layer 2 DeFi market share through late 2025. Arbitrum has become the base for major perpetual futures venues like GMX, which was already holding more than $450 million in TVL on Arbitrum V2 by early 2024, according to a Bitquery deep dive on the protocol. That same perpetuals venue has generated millions in fee revenue and, as later reporting from crypto.news showed, racked up over $2.74 million in fees on a single day in January 2023.

AmericanFortress is positioning its Universal Privacy Layer directly in this environment, pitching privacy as operational risk management rather than opacity. The beta is built to be compatible with existing blockchain systems, aiming to reduce transaction visibility that can feed frontrunning, copy trading and surveillance of automated strategies. The firm’s recent cryptographic research details a patent pending post quantum security architecture for hierarchical deterministic wallets, and management says the broader stack couples privacy preserving transaction rails, naming infrastructure and quantum resistant wallet security into “a comprehensive framework for digital asset custody and settlement.”

Campaign, compliance and liquidity

As part of the rollout, the company is launching a “Receive on Arbitrum Privately” campaign that encourages Arbitrum traders, liquidity providers and other DeFi users to test private receiving flows via the beta wallet. The first 500 eligible participants are set to receive a lifetime FortressName, a lifetime handle that locks in their Send to Name identity on the network. The campaign focuses on Arbitrum native communities already active across perpetual trading, liquidity provisioning and high frequency on chain market making, where address level visibility is particularly sensitive.

“Privacy and usability are increasingly important as more sophisticated financial activity moves on chain,” said Chase Allred, senior partnerships manager at Offchain, the service provider behind Arbitrum. Allred argued that infrastructure “that improves operational security while remaining compatible with compliant blockchain ecosystems represents an important area of development for the wider industry,” echoing themes that have surfaced across previous crypto.news coverage of institutional stablecoin and yield products deploying to Arbitrum.

AmericanFortress says the infrastructure is built with the next generation of automated finance in mind, including AI driven agents that will transact autonomously across DeFi rails. The firm contends that privacy preserving execution environments will be necessary as algorithmic capital allocation and machine driven trading expand across networks like Arbitrum, which has already been flagged by CoinGecko research as the largest Layer 2 solution by TVL share. For Arbitrum, the move slots into a broader evolution toward institutional DeFi, following integrations ranging from Chainlink oracles to yield bearing stablecoins and making the network’s privacy story a live competitive point against other Ethereum Layer 2s.