Sedona partnered with Fhenix on July 15 to integrate Confidential Fully Homomorphic Encryption infrastructure into its Arbitrum-based trading system. The integration replaces Sedona's existing security model based on trusted execution environments with fully homomorphic encryption, according to the companies. The upgrade is intended to keep user balances, portfolio positions and AI agent spending limits encrypted during processing, reducing reliance on trusted hardware.
Sedona Replaces Trusted Hardware With Cryptographic Encryption
Sedona, a self-custodial trading platform and neo-bank, announced the partnership to integrate Confidential FHE infrastructure into its system. The company said the upgrade will ensure key financial data is encrypted by default. According to the companies, the integration announced July 15 replaces Sedona's existing security model based on trusted execution environments with fully homomorphic encryption.
"Sedona is exactly the kind of application Confidential FHE was built for," said Guy Itzhaki, chief executive officer of Fhenix. "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."
In a statement, the companies said the distinction is important for 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 on committee-based approaches that require trust in a set of operators. Fully homomorphic encryption enables computations 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 executing inside the system, as well as from other parties.
Sedona Plans Arbitrum Deployment After Migration Completion
Sedona, founded by Tyler Maxwell, offers spot trading, perpetuals and structured products. The platform is migrating from the Seismic ecosystem to Arbitrum. Sedona said the deployment will occur after that migration is completed, shifting the platform's privacy model from hardware-based trust assumptions to cryptographic guarantees.
"We started with TEEs because they were the most practical way to deliver privacy, but our goal has always been to remove trust assumptions wherever possible," Maxwell said. "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."
Sedona said the technical integration is ongoing. Details on timing for the rollout on Arbitrum were not provided beyond the statement that it will follow completion of the migration.
FAQ
What did Sedona announce on July 15?
Sedona announced a partnership with Fhenix on July 15 to integrate Confidential Fully Homomorphic Encryption infrastructure into its Arbitrum-based trading system, replacing its existing security model based on trusted execution environments.
Why is Sedona integrating FHE into its platform?
Sedona is integrating FHE to keep user balances, portfolio positions and AI agent spending limits encrypted during processing, reducing reliance on trusted hardware and shifting to cryptographic guarantees instead of hardware-based trust assumptions.
When will Sedona deploy the Fhenix infrastructure on Arbitrum?
Sedona said the deployment will occur after completing its migration from the Seismic ecosystem to Arbitrum, but did not provide specific timing details beyond that statement.
