Features writer

Jeffrey Gogo

Features writer

Jeffrey Gogo

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Jeffrey Gogo is a journalist with 20 years of experience in business, finance, cryptocurrency, and climate change news and analysis.

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Last updated: 

September 15, 2025

Key Takeaways:

• Vitalik Buterin tested Hinkal’s “Invisible Wallet,” a new tool that hides wallet activity to protect users from hacks.
• Crypto hacks surged to $163 million in August, rising for the third month a row.
• Analysts say privacy wallets can reduce exposure for high-net-worth holders, but warn they’re not a silver bullet against determined tracking.
• While zero-knowledge proofs allow for privacy-preserving compliance, experts say legal alignment remains uncertain.

Ethereum cofounder Vitalik Buterin has been testing Hinkal’s new ‘Invisible Wallet,’ a privacy tool that could mark a breakthrough at a time when wealthy wallets are increasingly targeted by hackers.

It comes as losses from crypto hacks soared to $163 million in August, rising for the third month in a row, according to PeckShield. In the last five years alone, crypto investors have lost over $4 billion in targeted attacks.

Web3 firm Hinkal says its wallet allows users to hide their on-chain activity. It claims that users, especially those with big balances, can use the wallet to deter attacks without compromising regulatory compliance.

Hinkal CEO Giorgi Koreli described crypto’s in-built transparency as a “bug”. He says it is not “normal” that over $4 trillion in crypto assets on public blockchains “can be monitored and potentially weaponized by others.”

“Privacy-preserving wallets are the future, because free surveillance and tracking can’t be,” Koreli argues.

In his test transfer in late August, Buterin sent 0.01 ETH ($44) from his wallet to an address owned by Hinkal using its invisible wallet, according to Etherscan data. Buterin’s wallet address is publicly labeled vitalik.eth.

As seen in the image below, Hinkal kept track of the Ethereum founder’s activity but did not share any more of his internal transactions for privacy reasons. Even his well-known address is obfuscated in the transaction record.

“If your assets can be watched, your transaction can be mapped and traced at every interaction,” Koreli wrote in an article posted on X. “It’s not freedom. It’s additional exposure.”

Hinkal’s Invisible Wallet ‘Is Not a Silver Bullet’

The blockchain is, by design, a public ledger that broadcasts wallet activity. As Koreli puts it, every transaction, position, and trading strategy is visible to competitors, as well as cybercriminals.

He says crypto’s “radical transparency” has been a major obstacle, discouraging privacy-focused institutions in traditional finance from investing in the “$50 billion” decentralized finance (DeFi) market.

Slava Demchuk, CEO of blockchain analytics firm AMLBot, said tools like Hinkal’s invisible wallet can raise the bar for personal security by shielding wallet balances and transaction histories from opportunistic attackers.

“For high-net-worth holders, that additional layer of privacy reduces the risk of targeted hacks, phishing attempts, or even physical threats,” Demchuk told Cryptonews, adding:

“Of course, as with any system, ultimate protection depends on adoption, decentralization, robustness of the cryptography behind it, and, most importantly, on users’ own caution.”

Invisible wallets, like Hinkal’s, act as cloaking devices. Transactions can still be validated on-chain, but sensitive details, such as wallet addresses, amounts, or counterparties, remain hidden from public scrutiny, experts say.

Yury Serov, head of investigations at analytics firm Global Ledger, lauded the privacy wallet for removing the most obvious exposure points, namely the appearance of a public address in swaps, lending and routine DeFi use.

But this “invisible” must not be conflated with “invulnerable.” For example, he says, if someone moves unusually large amounts when the liquidity pool is thin, bad actors may easily correlate deposits and withdrawals.

“Timing patterns, transaction sizes, and even metadata from relayers can give away more than users expect,” Serov tells Cryptonews, adding:

“In practice, this means Hinkal makes it much harder for casual observers or opportunistic attackers to track big wallets, but it won’t make a whale completely disappear from a determined investigation.”

According to Serov, Hinkal’s Invisible Wallet “is best viewed as a layer of risk reduction, not a silver bullet.”

Can Privacy and Compliance Coexist?

Hinkal insists that its wallet can be both private and compliant at the same time. Experts aren’t so sure. According to AMLBot CEO Demchuk, it is technically feasible for the wallet to comply with the rules while private.

“Yes, users do pass KYC requirements, and zero-knowledge (ZK) proofs allow them to demonstrate eligibility without exposing personal data,” he noted. “However, from a legal standpoint, it’s not entirely compliant yet.”

Under the European Union’s General Data Protection Regulation, or GDPR, service providers may still be required to act as data controllers, creating “a gap between technical compliance and regulatory obligations,” he said.

The blockchain analyst brought up PureFi as an alternative framework that verifies compliance checks on-chain while ensuring that service providers retain the role of data controller.

“So, while Hinkal’s approach is innovative, there are still open questions about full regulatory alignment,” said Demchuk.

Global Ledger’s Serov concurred with Demchuk, saying that with ZK proofs, users can prove they have already passed (know your customer) KYC verification with a regulated exchange or that they are not on the sanctions list, to participate.

He explains:

“Historically, regulators and policymakers have sometimes seen privacy as being in direct opposition to financial crime compliance. But today, technological advances are moving so quickly that it may no longer be necessary to sacrifice one goal to achieve the other.”

But not everyone is entirely convinced. Didier Lavallée, CEO of Canadian crypto firm Tetra Trust, says Hinkal’s compliance model is “unclear”.

“You would need some kind of token or verification system to confirm it is compliant,” Lavallée told Cryptonews. Still, the service might be useful for institutions that continue to use permissioned blockchains, he said.

Vitalik Wants Privacy Wired Into the Blockchain

Vitalik Buterin has occasionally revisited the question of privacy in his blogs. He usually breaks down the “moon math” that is required to code privacy protocols such as zero-knowledge proofs into Ethereum.

His simple solution is to wire privacy into the blockchain itself rather than add it on top of the blockchain in the form of a wallet, for example.

“Up until now, making private transfers on Ethereum has required users to explicitly download and use a ‘privacy wallet’, such as Railway (or Umbra for stealth addresses),” Buterin explains in one blog entry.

“This adds great inconvenience and reduces the number of people who are willing to make private transfers. The solution is that private transfers need to be integrated directly into wallets.”

One of his proposed implementations would have wallets store a portion of a user’s assets as a “private balance” in a privacy pool.

“When a user makes a transfer, it would automatically withdraw from the privacy pool first,” says Buterin. “If a user needs to receive funds, the wallet could automatically generate a stealth address.”

Invisible Wallet: Transparency vs. Privacy

Hinkal’s privacy tool challenges crypto’s core ethos of transparency. After all, blockchain was built to let “everyone see everything.” However, some crypto analysts argue the wallet reframes crypto transparency rather than ends it.

“Instead of putting every detail of a user’s balance and trades on-chain, it uses zero-knowledge proofs to make only the necessary facts verifiable,” said Serov, the Global Ledger head of investigations, adding:

“In other words, it tries to preserve the trustless auditability of crypto while reducing the personal exposure that comes with full transparency. Hinkal reflects a shift from ‘everyone sees everything’ to ‘everyone can verify what matters.’”

AMLBot’s Demchuk spoke about balancing transparency with privacy. “Transparency has always been core to blockchain, but privacy is equally fundamental, especially when financial security is at stake,” he detailed.

“Public ledgers can remain auditable, while individual users gain choice over what information they reveal.”

Meanwhile, Hinkal could face much bigger problems. Privacy tools have historically drawn sharp reactions from regulators.

In 2022, for example, the U.S. Treasury Department sanctioned Ethereum-based mixing service Tornado Cash on allegations of facilitating billions in laundered funds. Its cofounder, Roman Storm, was indicted in the U.S. for money laundering.

“There are some legitimate use cases of the (Hinkal) app, like payroll or protection from dusting attacks,” Serov noted. “But this innovation is likely to attract regulators’ attention in advanced regulatory regimes, like the EU.”

Without a MiCA license, or Markets in Crypto Assets Regulation, Hinkal will not be able to offer its privacy-enhanced crypto custody solution in the European Union, according to Serov.

“Under the new AMLR, crypto asset services providers will not be allowed to facilitate transactions with privacy coins or anonymous accounts from July 2027. Such privacy-enhancing solutions will be effectively outlawed.”

Analysts say Hinkal’s wallet will likely be pushed out into jurisdictions that don’t yet have similar regulations in place.

“Unlike mixers, which anonymize flows without checks, Hinkal integrates privacy-preserving KYC and access tokens,” said Demchuk. “That gives regulators a framework to distinguish it from ‘black box’ laundering tools.”

Data from Global Ledger shows that Tornado Cash received roughly $1.5 billion worth of ETH between Jan. 1 and Sept. 5 this year (see image above).

Serov said around 36% of the funds are “high-risk” and come from hacks, such as the Cork Protocol hack and Bybit hack, as well as sanctioned entities like Garantex and other risky sources. “The mixer poses significant AML risks,” he added.

The need for thieves to steal money protected by private keys stored by wallets

• Accessing or copying wallet data files.
• Knowledge of the passphrases (or pins, etc.) used to encrypt the keys of these files.

However, if someone is tricked by a scammer, it is certainly possible that the victim has been tricked into allowing the scammer to access the computer by installing the software they suggested, perhaps by giving screen sharing access to someone they thought was a helper. Their computers may have backdoor access and/or keyloggers installed.

It would be wise to assume the worst case scenario. Create a new wallet with a new key with a new key from an existing computer. I create an on-chain transaction to move money into that clean environment.

David Schwartz, chief technology officer at Ripple, has praised Xaman, a popular XRP wallet, for swiftly reacting to a large-scale supply chain attack on the Node Package Manager (NPM) ecosystem. 

A reputable developer’s NPM account was recently compromised, and widely JavaScript packages ended up being infected with malicious code. 

The malware specifically targets cryptocurrency wallets such as MetaMask in order to redirect the funds of uninitiated crypto users to the attackers by secretly swapping addresses. 

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As reported by U.Today, Ledger CTO Charles Guillemet has urged crypto users who do not have hardware wallets with clear signing to temporarily stop conducting on-chain transactions. 

Xaman’s reaction 

The team behind the Xaman wallet immediately conducted an audit, which showed that it was safe for users. 

XRPL Labs co-founder Wietse Wind Supply has noted that chain attacks are becoming “more and more common.”

So we began withdrawing from Beton Line (casino/poker platform) and retracted it to the wallet of the cash app. I’ve done this hundreds of times between the two and have never had any problems before. I know that the Cash app has received a transaction, but it is pending and has not been confirmed. Time passed and when I checked the blockchain it says that the original TXID has been replaced by RBF. In the first TXID I showed the transaction amount and the correct cash app wallet address as output, but in the new “exchange” TXID my wallet is not listed as output, nor is it listed the transaction amount. New amount, new address. From what I found online, isn’t this impossible only by hackers who have seed phrases for the sender platform or the sender’s wallet? Or is this likely a problem with the cache app? Thank you for not really understanding any help. Edit: Also, it has been confirmed more than 25 times on the blockchain and is not pending.

You’ve seen your friends and colleagues discuss cryptocurrency. Some people are investing heavily and enjoying profits, but most crypto wallet interfaces aren’t the most user-friendly as they don’t know where to start.

However, the Tangem wallet is here to change it for you. Hardware wallets have sophisticated design, simple setup processes and powerful security. To sweeten this deal even further, Tangem is currently offering 10% off to readers of 99Bitcoins.

Tangem Wallet: Another take on cryptographic security

Hardware wallets are considered the gold standard for keeping your digital assets safe, but they are not the easiest to use. There is an additional complexity that is not found in a regular crypto wallet, including writing down 12 or 24 words of recovery phrases, keeping them firmly, and hoping they will not be lost or stolen. If you’re just starting out, this doesn’t work.

Tangem solves this problem. Instead of relying on recovery phrases, Tangem Wallet stores its private key on a secure chip. These tips are certified at the rating guarantee level 6+, a reliable standard that banks and governments can trust. Your key will never leave the tip. Also, there are no seed phrases for hackers or you to leave behind.

Each wallet has two or three identical sets of cards, ensuring built-in redundancy. If one card is lost, the other card will still work. There is no need to follow complicated backup procedures. And for a while, 10% off with exclusive discount code.

Check out Tangem Wallet

Sleek, portable, easy to use

Tangem has two forms of hardware wallets: One is a credit card size wallet, and the other is Tangem Ring, which was announced in 2024. Both of these are battery-free, contactless and come with NFC technology.

To complete the transaction, tap the card or tap the phone. Unlike bulky hardware wallets that require cables and dongles, Tangem is easy to wear on your bank cards or fingers.

The Tangem app is available on iOS and Android. This app is open source. This means that the source code is available online, you can check it yourself and make sure there’s nothing suspicious (or at least rely on the ocean of experienced developers to check it out).

Tangem Wallet supports over 16,000 digital assets across more than 85 blockchains, allowing you to buy, sell, send, receive, exchange cryptocurrencies, and buy pile currency. You can also connect to distributed applications via WalletConnect.

A proven company with strong partnerships

Tangem Wallet was founded in Zug, Switzerland in 2017 and has received high praise for blockchain security in less than 10 years. In addition to being audited by well-known companies such as Kudelski Security and Riscure, its components are sourced from technology giants like Samsung Semiconductor. The company works with well-known companies such as Visa, Stellar and Cardano.

In 2023, the company introduced Wallet 2.0. This includes optional recovery phrases for advanced users. Recent innovations such as The Tangem Ring and Stealth Cards focus on combining security with everyday ease of use.

Check out Tangem Wallet

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The crypto market’s still just hanging ’round, consolidating – nothing wild happening.

But as we’ve already mentioned before, things could change on September 17, when the Fed’s gonna decide whether they’re going to cut interest rates.

And right now, it’s looking pretty likely they will.

Reason: the job market keeps getting weaker.

Hiring slowed → only 54K private sector jobs were added last month (way below what economists expected);

Layoffs spiked → August layoffs increased almost 40% compared to last year – the worst August we’ve seen since 2020;

More people are filing for unemployment → weekly jobless claims hit 237K (higher than expected).

(Tomorrow’s jobs report will give us an even clearer picture of how rough things are getting.)

Now, if the Fed does cut rates, here’s the domino effect: short-term interest rates drop, which makes the dollar less attractive to investors (’cause like, why hold dollars if they’re not paying you much?).

So the dollar gets weaker.

At the same time, according to QCP Capital, investors want extra pay for holding long-term bonds because they’re worried about future risks like inflation and government debt.

This combo – short-term rates down + long-term rates relatively high – tells markets: the Fed’s easing, but the future still looks risky.

And it’s actually good news for crypto:

Weaker dollar = stronger alternatives.

When the dollar loses its shine, assets like Bitcoin and gold become more attractive in global investment portfolios.

Inflation fears demand for “hedge” assets.

If inflation expectations rise, people want assets that hold their value when money starts losing its purchasing power.

Bitcoin increasingly fits that bill.

Policy uncertainty = “outside the system” becomes appealing.

When people don’t fully trust the government’s ability to manage the economy, Bitcoin’s whole “decentralized, no government control” thing starts looking pretty sexy.

Overall, the likely setup is rate cuts + weaker dollar + inflation worries.

That’s basically the perfect storm for assets like gold and Bitcoin – things people buy when they want protection from a wobbly economy and don’t completely trust traditional currencies.

And the institutions are already picking up on this, btw – Bitcoin ETFs had $633.3M in inflows just this week.

So, if you’re wondering why crypto bros are getting excited about the next Fed meeting, this is why.