Sedona adopts Fhenix confidential FHE for balance privacy

Sedona has partnered with Fhenix to integrate confidential fully homomorphic encryption (FHE) into its self-custodial trading platform, the companies announced on July 15. The upgrade is intended to keep user balances, portfolio positions and AI agent spending limits encrypted while computations run.

Sedona, a neo-bank that offers spot trading, perpetuals and structured products, is migrating from the Seismic ecosystem to Arbitrum. Fhenix’s FHE infrastructure is slated for deployment on Arbitrum after Sedona completes that multi-step migration. No specific rollout date was provided.

Fully homomorphic encryption allows computations to be performed on encrypted data without decrypting it first. According to the firms, that lets Sedona run trading logic and autonomous agents without exposing underlying financial data to system operators or the code that performs the work.

The integration replaces a privacy model that relied on trusted execution environments (TEEs) and operator committees. The companies said the change eliminates reliance on trusted hardware and reduces the need for users to trust physical devices or groups of operators to keep data confidential.

“Sedona is exactly the kind of application Confidential FHE was built for. Trading platforms and financial applications need privacy that extends beyond transactions to balances, positions and increasingly the parameters that autonomous agents operate within. By moving from trusted hardware to cryptographic guarantees, Sedona is showing how confidential finance can become a native capability on Arbitrum rather than an optional feature,” Guy Itzhaki, chief executive of Fhenix, commented.

Tyler Maxwell, founder of Sedona, explained the platform initially used TEEs because they were the most practical route to privacy and that the company’s longer-term goal has been to reduce trust assumptions. “Fully homomorphic encryption lets us protect sensitive financial data through mathematics rather than hardware, providing a much stronger foundation for the future of self-custody,” Maxwell added.

Technical work on the integration is ongoing. The partners said deployment on Arbitrum will follow the migration and did not provide a timeline. They noted that performance and operation under live trading conditions have yet to be demonstrated.