Crypto: Starknet Taps Ey Nightfall To Bring Institutional Privacy To...

In a Tuesday release shared with Cointelegraph, StarkWare positioned the move as a way for enterprises to use a shared, open layer-2 rather than closed, bank-only networks, while working with a Big Four firm that already audits many of the organizations it wants to onboard.

StarkWare said that institutions will also be able to access Ethereum DeFi for activities such as lending, swaps and yield strategies, with transactions private by default but supporting selective disclosure, auditability and Know Your Customer (KYC) protocols.

Related: Arbitrum, Optimism and Base weigh in after Vitalik questions L2 scaling model

StarkWare frames this as a “major breakthrough” in making public blockchains usable for institutional capital that has so far been deterred by full onchain transparency and the resulting compliance and competitive risks.

He said that while crypto native teams had “moved mountains” building ZK infrastructure, the EY-built system added a complementary layer of institutional credibility and “regulatory fluency.”

Related: Vitalik Buterin tempers vision for ETH L2s, pushes native rollups

Gruell also cast Starknet plus Nightfall as an interoperability layer between institutions, contrasting it with what he claimed are “siloed” institutional environments on rival networks, which he said “do not serve as an interoperability infrastructure,” and permissioned models such as Canton Network, which are “not yet integrated with the Web3 ecosystem.”

He stressed that Nightfall would remain permissionless and fully integrated into Starknet, with a staged rollout, where initial deployment focused on “private payments and transfers with compliance gating and secure sequencing in place,” while “verifier upgrades and expanded functionality follow as the system scales.”

Starknet has steadily grown into one of the larger ZK rollups by total value locked (TVL), currently about $280 million, with usage primarily driven by DeFi protocols and native ecosystem apps.

At the same time, Starknet’s rapid scaling push has exposed reliability challenges. In 2025, the network suffered major outages tied to sequencer and infrastructure issues, prompting public post-mortems and commitments to harden reliability before courting more institutional flow.

Source: CoinTelegraph