Merkle Science is building blockchain privacy that regulators can actually live with

Merkle Science thinks it has found the middle ground between blockchain privacy and regulatory compliance, and it involves making your on-chain balances invisible to the public while keeping a compliance backdoor for the people who need one.

Justus Delp, VP of Business Solutions at Merkle Science, laid out the company’s approach to what it calls confidential transfers. Account balances stay private. Compliance teams still get the access they need to do their jobs.

What Merkle Science is actually building

Merkle Science, founded in 2018, has spent years developing tools for predictive transaction monitoring and risk detection across multiple blockchains. Its product suite includes Compass for transaction monitoring and Tracker for investigations, tools used by law enforcement and financial institutions alike.

The company raised $5.75M in a Series A round in 2021 to scale those capabilities. Now it’s pushing into what might be its most ambitious project yet: making privacy and compliance coexist on the same chain.

The firm has partnered with Mysten Labs, the team behind the Sui blockchain, to integrate confidential transfers directly with compliance and risk monitoring infrastructure. The collaboration is designed to bake privacy-compliant architecture into the system from the ground up.

Delp, who holds a PhD from the University of Edinburgh, described this as a fundamental shift in how the company thinks about on-chain assets. Rather than treating every transaction as a publicly visible event that compliance teams retroactively analyze, the new model assumes privacy as the default state. Compliance access becomes a structured permission layer, not an artifact of everything being exposed.

The regulatory tightrope

Merkle Science already extends its services to privacy-focused protocols, serving both law enforcement agencies and financial institutions. The confidential transfers initiative is an extension of that philosophy, applied at the infrastructure level. The company has also formed partnerships with entities such as Aleo, Finoa, and Stablecoin Standard as part of its broader compliance capabilities.

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