Sedona is a self-custody neobank that’s private by design. It offers crypto trading capabilities, with support for stocks and gold expected in the future. The platform bundles spot/perpetuals trading with structured earn products to deliver a more comprehensive crypto experience.
Fhenix is an innovative company revolutionizing privacy for crypto applications through Fully Homomorphic Encryption (FHE), enabling the deployment of encrypted smart contracts on-chain. It can integrate with Ethereum, Arbitrum, and Base applications, ensuring compatibility with hundreds of projects.
On July 15, 2026, Sedona announced a partnership with Fhenix that will see Confidential FHE (CoFHE) infrastructure implemented into Sedona’s Arbitrum-based platform, replacing its existing Trusted Execution Environment (TEE) security model, and introducing end-to-end encryption for balances, positions, and AI agent spending limits.
What is Fully Homomorphic Encryption
Current cryptocurrency systems use encryption to protect sensitive data. However, encrypted data cannot be read, so decryption is necessary before applications can process it, exposing the raw information and introducing a potential vulnerability.
However, fully homomorphic encryption offers a better solution. It enables data processing without decryption while maintaining consistent functionality for users. Applications can compute encrypted data directly, enabling end-to-end protection.
Sharing excitement regarding Sedona’s decision to switch to fully homomorphic encryption, Guy Itzhaki, CEO of Fhenix, said:
“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. We believe this partnership is an important step toward making privacy a default expectation for on-chain financial applications.”
Looking Forward
The switch to Confidential FHE marks an important step in Sedona’s evolution. Prior trusted-execution-environment-based security models were flawed. Users had to trust the underlying security hardware or committee-based models reliant on trusted operators.
Moving to fully homomorphic encryption enables Sedona to perform calculations on encrypted data, enhancing security by eliminating the trust dependencies that typically create a weak link. The system keeps your portfolio and positions hidden and encrypted, while enabling you to set spending limits that are respected by but not visible to deployed AI agents.
Confidential FHE systems are relatively uncommon, but the benefits are clear. They reduce counterparty risk and improve privacy. Sedona is currently in its waitlist phase, but it’s worth keeping an eye on the platform to see how its FHE integration rolls out. If successful, Sedona could be the catalyst for an industry-wide shift to fully homomorphic encryption.
Discussing the decision to switch to the FHE approach, Sedona’s founder, Tyler Maxwell, said:
“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. 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. For many of our users – especially those in emerging markets who rely on stablecoins as their primary savings account and payment rail: financial privacy isn’t a luxury. It’s an expectation. Bringing FHE to Sedona means they can manage their assets, automate strategies, and use AI-powered tools without exposing the information that matters most.”
With over half a decade of experience commentating on the cryptocurrency market and even more as a trader and investor, Jay has developed a robust knowledge base that enables him to dive deep into the inner workings of crypto platforms and the broader market to deliver unique, user-focused insight.
Jay's work has spanned public relations firms, crypto projects, affiliate sites, and news outlets.
