Key takeaways
- Sedona partnered with Fhenix on July 15 to integrate cryptographic encryption by default into its system.
- The FHE change removes 100% of the reliance on trusted hardware, setting a new standard for private DeFi applications.
- Next, Sedona will deploy the Fhenix infrastructure to Arbitrum after completing its multi-stage migration.
Cryptographic Security Upgrade
Sedona, a self-custodial trading platform and neobank, announced a partnership with Fhenix to integrate Fully Homomorphic Confidential Encryption (FHE) infrastructure into its Arbitrum-based system. The company said the upgrade would ensure key financial data is encrypted by default.
The integration, announced July 15, replaces Sedona’s existing security model based on trusted execution environments with fully homomorphic encryption, according to the companies. Sedona said the change aims to keep user balances, wallet positions and AI agent spending limits encrypted even during processing, reducing reliance on reliable hardware or carrier-based models.
“Sedona is exactly the kind of application Confidential FHE was designed for,” said Guy Itzhaki, CEO of Fhenix. “Trading platforms and financial applications need privacy that extends beyond transactions to balances, positions and, increasingly, the parameters in which autonomous agents operate. By moving from trusted hardware to cryptographic guarantees, Sedona shows how confidential finance can become a native feature of Arbitrum rather than an optional feature.”
Sedona, founded by Tyler Maxwell, offers spot, perpetual and structured trading products. The platform is migrating from the Seismic ecosystem to Arbitrum. Sedona said the rollout would take place once the migration is complete, shifting the platform’s privacy model from hardware-based trust assumptions to cryptographic guarantees.
In a statement, the companies said the distinction was important to both users and developers. They noted that many private decentralized finance solutions rely on trusted execution environments, which require users to trust the underlying hardware, or committee-based approaches that require trust in a set of operators. Fully homomorphic encryption allows calculations to be performed on encrypted data without revealing it, the companies said.
Under the integrated model, Sedona users’ balances and positions will remain hidden from AI agents running inside the system, as well as other parties.
“We started with TEEs because they were the most practical way to ensure privacy, but our goal has always been to remove trust assumptions as much as possible,” Maxwell said. “Fully homomorphic encryption allows us to protect sensitive financial data through mathematics rather than hardware, providing a much stronger foundation for the future of self-custody. »
Sedona said technical integration is underway. Details on the timing of the rollout to Arbitrum were not provided beyond the statement that this will follow the completion of the migration.
