StarkWare has unveiled a demo of “Private KYC” for Starknet, aiming to let users satisfy know-your-customer requirements without handing over complete identity documents. The privacy-focused system is built around selective disclosures using zero-knowledge proofs, designed to confirm specific facts—such as age or credential validity—while keeping the underlying personal data hidden.

In the announcement, StarkWare said the approach uses STRK20 privacy features alongside zero-knowledge STARK proofs. The goal is to reduce the amount of personal information organizations need to collect and store, addressing a core vulnerability of today’s compliance workflows: once large identity databases exist, they become high-value targets.

Key takeaways

• Starknet Private KYC is designed to verify specific attributes (e.g., “over 18” or “credential is valid”) rather than reveal full passport details.
• The demo relies on zero-knowledge STARK proofs so verifiers can confirm eligibility without viewing the underlying identity data.
• User-side steps include scanning a passport and proving eligibility via encrypted data registered on-chain.
• StarkWare frames the release as proof that compliance and privacy do not have to conflict—particularly by limiting how much identity data institutions store.
• The model is positioned as a contrast to biometric verification approaches that drew criticism for centralized custody concerns.

Selective identity checks on Starknet

Traditional KYC typically requires users to provide full documents, after which institutions must store and safeguard sensitive information. StarkWare argues that this “all-or-nothing” data exchange is unnecessary when regulations often require confirmation of only one or a small set of facts.

Under the proposed flow, users begin by scanning their passport using a smartphone camera and the device’s NFC chip to read and confirm the document is genuine and signed by the issuing authority. After that, users encrypt identity data to their Starknet wallet, register relevant attributes in a public on-chain registry, and submit zero-knowledge proofs for targeted checks.

Crucially, verifiers are able to validate eligibility by consulting the public registry and checking the proofs—without accessing the actual identity data itself. StarkWare described the principle this way: verification should “only confirm the precise fact,” such as meeting an eligibility rule, rather than expose the complete document.

StarkWare also warned that institutions collecting full identity information can create long-lived risk. In its framing, “every identity database becomes a liability the moment it exists,” underscoring why limiting what’s stored matters for both security and compliance.

How the demo’s privacy design works

StarkWare presented Private KYC as a demo rather than a fully deployed feature set, but the workflow outlines a practical mechanism for privacy-preserving verification on a public blockchain environment.

First, passport data is used locally during the scan and authenticity confirmation step. Next, identity data is encrypted and tied to a user’s Starknet wallet, reducing the likelihood that raw documents or complete personal records need to be transmitted to every counterparty.

Then, instead of sharing full documents for each verification request, users register attributes in a public on-chain registry and produce zero-knowledge STARK proofs for the specific statements that need to be checked. Starknet’s team said current identity checks often “ask for your whole document when they only need one fact,” and the architecture is intended to align the system’s disclosure level with the actual compliance requirement.

StarkWare’s core argument is that verification can be structured so institutions confirm what they need without building their own copy of someone’s identity. The company said this approach avoids creating another dataset that organizations would then have to defend.

Why KYC privacy is gaining momentum

The push for privacy-preserving verification comes as cyber risk continues to rise. The article accompanying the announcement cited StationX data suggesting the US reached a record 3,322 data compromises in 2025, representing a 79% increase over five years. It also referenced a global average data breach cost of $4.4 million, as reported by StationX in that same context.

On top of broad data-breach statistics, the wider compliance landscape is increasingly shaped by the reality that sensitive records—especially identity and credential data—attract attackers. StarkWare’s positioning is therefore less about cryptography as an abstract concept and more about changing the practical incentives for collecting and storing identity information.

The company’s approach also reflects an important asymmetry in today’s KYC systems: users often have little control over how many parties repeat collection, how long records are retained, or what security standards are used. Private KYC, as presented, aims to reduce those risks by limiting disclosure to what is necessary for eligibility decisions.

In the crypto ecosystem, there is also an example of the consequences of custody and centralization in privacy-adjacent identity systems. StarkWare compared its direction to Sam Altman’s World ID, which uses zk-proofs to verify humanness via iris scans on hardware orbs. However, World ID drew backlash over centralized biometric custody. StarkWare’s “self-custody” framing is intended to address similar concerns by avoiding the same custody pattern for biometric-style data.

What to watch next for Starknet’s Private KYC

Private KYC on Starknet is positioned as a step toward compliance-ready verification that protects sensitive personal details, but the demo nature of the announcement means implementation details and rollout timing remain unclear. Investors and builders should watch for when and how the proofs, on-chain attribute registries, and verifier tooling are integrated into real-world applications—especially those that need auditable eligibility without repeated exposure of full documents.

Commodity Futures Trading Commission (CFTC) Chair Michael Selig on Tuesday acknowledged fundamental differences in the traditional commodity markets it has long regulated and its more recent role overseeing aspects of the cryptocurrency and blockchain industry.

He told the American Cotton Shippers Association Annual Convention that considering the agency’s roots in overseeing asset classes that range from corn to hog bellies, the perpetual contracts tied to digital assets weren’t “suitable for all asset classes, especially in products like agriculture.”

“We fully recognize and understand that 24-7 trading and the perpetual model is not a natural fit for traditional commodity markets, like agriculture, that observe limited trading hours and rely on physical delivery,” said Selig.

The CFTC chair’s remarks followed the agency approving perpetual futures contracts tied to the spot price of Bitcoin for prediction markets platform Kalshi and issuing a no-action position for similar products on cryptocurrency exchange Coinbase in May. Kraken also subsequently launched perpetual futures trading for US users through its CFTC-regulated platform Bitnomial.

Related: Crypto lobby urges Congress to pass staking and mining tax bill as is

Selig’s position as sole commissioner at the CFTC, both in claiming that the agency has “exclusive jurisdiction” in overseeing prediction markets and approving crypto perpetual futures, has prompted legal backlash from many companies and state level authorities. Last week, the Chicago Mercantile Exchange (CME) Group sued the agency in the District of Columbia, alleging that the perpetual contract approvals violated the Commodity Exchange Act.

Still no commissioner nominations from Trump

Despite the urging of many US lawmakers, President Donald Trump has made no move to fill out the CFTC’s five-person leadership panel. Selig has been the only Republican commissioner and chair following the departure of Caroline Pham in December 2025.

The US Senate is expected to take up a vote on the Digital Asset Market Clarity (CLARITY) Act in a matter of weeks, which could change the roles of the CFTC and Securities and Exchange Commission in overseeing digital assets.

Magazine: Japanese pension fund tips 1% in crypto, G7 urges action on NK hackers: Asia Express

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

A group of US Senate Democrats is pressing Senate Republicans to open hearings into a reported $500 million investment that links a Trump-linked crypto firm to Abu Dhabi royalty, arguing the transaction could raise national security and conflict-of-interest concerns.

In a letter sent Tuesday, the lawmakers urged Republican leadership—who control the Senate’s committee system and set whether hearings move forward—to call witnesses from the Trump administration and to investigate whether the reported deal between the Trump family’s crypto company and a UAE-backed investor influenced decisions made by the president or his officials. The letter also points to broader concerns that the administration has weakened crypto enforcement.

Key takeaways

• Senate Democrats want immediate Senate hearings into a reported $500 million UAE-linked deal involving Trump family crypto interests.
• The lawmakers are asking for testimony from Trump administration officials “under oath” regarding the investment and related developments.
• They cite national security worries, including concerns that sensitive technology could be accessed by China after a major UAE arms and chip agreement.
• The letter links the investigation request to claims that the administration has loosened crypto compliance and enforcement efforts.

UAE investment into Trump-linked World Liberty Financial under scrutiny

The push follows reporting that an Abu Dhabi investment company backed by Sheikh Tahnoon bin Zayed Al Nahyan—an adviser to the United Arab Emirates’ national security apparatus—signed a deal in January 2025 to purchase a 49% stake in World Liberty Financial, a crypto platform associated with President Donald Trump, according to the Wall Street Journal as referenced earlier by Cointelegraph.

The Democrats’ Tuesday letter treats the reported transaction as more than an ordinary business arrangement. It argues that Congress should examine both the investment details and whether the deal affected subsequent actions by the president and the administration.

According to the letter, the senators are “deeply concerned” about what the UAE may receive—or may have already received—“at the expense of US national security.” They also argue that Congress must investigate whether the reported investment influenced decisions taken by President Trump.

National security concerns extend beyond crypto

The lawmakers point to additional context involving the UAE and the US administration. In May 2025, the Trump administration agreed to a major arms and artificial intelligence chip deal with the UAE, a development the senators said occurred “despite concerns raised by US national security officials that China could access the chips.”

President Trump has previously denied awareness of the World Liberty Financial deal, according to coverage referenced by Cointelegraph, which cited Trump’s position that he was not aware of the arrangement.

For the Democrats, the combination of a reported UAE investment in a Trump-connected crypto platform and a subsequent US-UAE technology and defense agreement is the heart of the scrutiny. Their central question is whether there is an asymmetry in benefits—whether the UAE may have obtained preferential access or other advantages in connection with both economic and strategic ties, even if the president says he was unaware of the crypto transaction.

Claims about weakening crypto enforcement fuel the call

Beyond the specific investment, the letter also ties the investigation request to what the senators describe as steps to weaken enforcement in the crypto sector. The Democrats cite concerns about actions such as exempting crypto service providers from certain financial services regulations and disbanding the Justice Department’s crypto enforcement team.

The senators—Elizabeth Warren, Richard Blumenthal, Gary Peters, Dick Durbin, and Ron Wyden—appear to be arguing that congressional oversight is needed not only to evaluate potential foreign influence around a high-profile crypto entity, but also to determine whether enforcement posture changes have reduced deterrence or oversight at a time when the sector’s regulatory and compliance framework is evolving.

Previous Democratic probes and pressure campaigns

This request is part of a broader pattern of Democratic scrutiny around World Liberty Financial and Trump-linked crypto interests.

Earlier this year, Cointelegraph reported that Senate Democrats urged the Treasury Secretary to determine whether the UAE stake should be reviewed under the Committee on Foreign Investment (CFIUS) framework, pointing to the possibility that foreign investment could implicate national security concerns. That push, according to prior coverage referenced by Cointelegraph, specifically urged Treasury Secretary Scott Bessent to assess whether the deal warranted a CFIUS probe.

Democrats have also raised questions about how regulators have handled enforcement decisions in the crypto space. Earlier coverage referenced by Cointelegraph described senators pressing Securities and Exchange Commission Chair Paul Atkins concerning the decision to drop a fraud case involving Justin Sun, a major backer associated with World Liberty Financial.

Separately, lawmakers have pursued investigations beyond crypto investment ties. In May, Democratic Senator Peter Welch and Representative Dave Min launched a probe into Trump’s pardons, including the pardon of Binance co-founder Changpeng Zhao. That inquiry came after Binance accepted a $2 billion investment from an Abu Dhabi fund in early 2025 and agreed that the funds would be paid in World Liberty Financial’s stablecoin, USD1.

Taken together, the new letter suggests Democrats intend to keep pressure on the oversight agenda—moving from regulatory enforcement questions and transaction scrutiny toward potential connections between foreign investment, presidential decision-making, and enforcement posture changes.

What to watch next

The next step hinges on whether Senate Republicans agree to schedule hearings and, if so, what specific questions committees will put to Trump administration officials and other witnesses about the reported UAE investment, related communications, and the administration’s enforcement decisions. With the national security and conflict-of-interest concerns now being formally framed as matters for congressional investigation, the key uncertainty is whether oversight will expand beyond allegations into documented evidence and official timelines.

Zcash miner Fortitude Mining Holdings is set to merge with medical technology company HeartSciences in a deal that will allow Fortitude to become publicly traded without pursuing a traditional initial public offering.

The all-stock transaction announced Tuesday will see Fortitude’s management team assume control of the combined company, which will operate under the Fortitude name and is expected to trade on Nasdaq under the ticker symbol TUDE, subject to regulatory approval. Existing HeartSciences shareholders will retain a minority ownership stake.

HeartSciences CEO Andrew Simpson hinted at the rationale behind the transaction, saying it would free the company from “the constant cycle of raising capital” while providing what it believes is the best path forward for shareholders.

While the combination brings together two unrelated businesses — Fortitude mines digital assets, while HeartSciences develops AI-enabled cardiac diagnostics — the deal is effectively a reverse merger that gives Fortitude access to the public markets through an existing Nasdaq-listed company. For HeartSciences, which has faced ongoing capital needs, the transaction offers shareholders continued exposure to a publicly traded business while allowing its healthcare unit to continue operating under Simpson’s leadership.

The structure is similar to other crypto companies that have reached the public markets through mergers rather than traditional IPOs. For example, Bitcoin miner Core Scientific listed via a SPAC merger in 2022, while Cipher Mining also went public through a SPAC transaction.

Shares of HeartSciences, which continue to trade on Nasdaq under the ticker HSCS pending completion of the transaction, rose as much as 91% on Tuesday, according to Google Finance data.

HeartSciences stock. Source: Google Finance

Related: CoinShares stock makes US debut on Nasdaq following SPAC merger

HeartSciences remained unprofitable before merger deal

HeartSciences has yet to achieve meaningful commercial revenue and has reported net losses for several consecutive years. According to MarketScreener, the company generated minimal revenue in fiscal 2025 while its net loss widened to $8.77 million from $6.61 million a year earlier.

Despite its financial challenges, HeartSciences advanced its product roadmap in fiscal 2025, launching its MyoVista Insights software platform, which is designed to modernize existing ECG management systems.

As a privately held company, Fortitude has disclosed little about its finances. However, it said it had scaled its annualized production to 157,000 Zcash (ZEC) as of May 31. ZEC was last trading at about $413 apiece, CoinMarketCap data showed at time of publication. That gave the token a market cap of $6.92 billion.

Related: Crypto Biz: Is AI the exit strategy for miners?

Bitcoin and ether are grinding toward the lower end of their recent ranges, major market making firm Wintermute’s OTC trading desk said in a Wednesday note shared with CoinDesk, with both assets caught between last week’s hawkish Fed and the stop-start Iran headlines.

Options markets price a relatively tight move for the next 24 hours. Wintermute’s one-day straddle, a measure of expected swing derived from options pricing, put bitcoin in a $61,242 to $63,563 range and ether between $1,606 and $1,694, implying moves of about 1.9% and 2.7% respectively.

The backdrop is deteriorating. Token correlations are rising, meaning assets are moving together rather than on their own fundamentals, while liquidity is thinning into the summer months with no fresh institutional bid visible in ETF flows.

Wintermute flagged $59,000 as the level to watch, calling it the bear market low and the key support if current pressure continues.

Three catalysts shape the rest of the week: the U.S.-Iran peace deal and whether it holds, Thursday’s PCE inflation print, the Fed’s preferred measure of price growth, and the quarterly options expiry at month-end, which can amplify moves as traders roll or close large positions.