As Crypto Hacks Surge, Ethereum Founder Vitalik Tests New ‘Invisible Wallet'
As crypto hacks continue to surge, Ethereum founder Vitalik Buterin has been testing Hinkal's new 'Invisible Wallet,' a privacy tool that could mark a breakthrough at a time when wealthy wallets are increasingly targeted by hackers. The latest losses from crypto hacks soared to $163 million in August, rising for the third month in a row, according to PeckShield. In the last five years alone, crypto investors have lost over $4 billion in targeted attacks.
Hinkal's Invisible Wallet claims to allow users to hide their on-chain activity, making it harder for hackers to target them without compromising regulatory compliance. The company's CEO, Giorgi Koreli, describes crypto's built-in transparency as a "bug." He argues that over $4 trillion in crypto assets on public blockchains can be monitored and potentially weaponized by others.
In his test transfer in late August, Buterin sent 0.01 ETH ($44) from his wallet to an address owned by Hinkal using its invisible wallet, according to Etherscan data. As seen in the image below, Hinkal kept track of the Ethereum founder's activity but did not share any more of his internal transactions for privacy reasons.
Buterin's wallet address is publicly labeled vitalik.eth. According to Koreli, if your assets can be watched, your transaction can be mapped and traced at every interaction. "It's not freedom. It's additional exposure."
The Blockchain is Public, But Privacy Matters
The blockchain is, by design, a public ledger that broadcasts wallet activity. As Koreli puts it, every transaction, position, and trading strategy is visible to competitors, as well as cybercriminals.
However, Hinkal's Invisible Wallet reframes crypto transparency rather than ends it. Instead of putting every detail of a user's balance and trades on-chain, it uses zero-knowledge proofs to make only the necessary facts verifiable.
"In other words, it tries to preserve the trustless auditability of crypto while reducing the personal exposure that comes with full transparency," said Yury Serov, head of investigations at Global Ledger. "Hinkal reflects a shift from 'everyone sees everything' to 'everyone can verify what matters."
Experts Weigh In
"Tools like Hinkal's Invisible Wallet can raise the bar for personal security by shielding wallet balances and transaction histories from opportunistic attackers," said Slava Demchuk, CEO of blockchain analytics firm AMLBot.
"For high-net-worth holders, that additional layer of privacy reduces the risk of targeted hacks, phishing attempts, or even physical threats," Demchuk added. "Of course, as with any system, ultimate protection depends on adoption, decentralization, robustness of the cryptography behind it, and most importantly, on users' own caution."
A Potential Silver Bullet?
Hinkal's Invisible Wallet could be a game-changer for crypto investors who want to protect their assets from hackers. But is it a silver bullet?
"It's not entirely compliant yet," said Demchuk, citing the European Union's General Data Protection Regulation (GDPR). "There are still open questions about full regulatory alignment."
Vitalik Wants Privacy Wired Into the Blockchain
Ethereum founder Vitalik Buterin has been testing Hinkal's Invisible Wallet and has proposed integrating privacy into the blockchain itself. He argues that private transfers need to be integrated directly into wallets, rather than relying on third-party tools.
A Potential Regulatory Roadblock
However, regulators may not be pleased with Hinkal's approach. In 2022, the U.S. Treasury Department sanctioned Ethereum-based mixing service Tornado Cash on allegations of facilitating billions in laundered funds.
"There are some legitimate use cases of the app, like payroll or protection from dusting attacks," said Serov. "But this innovation is likely to attract regulators' attention in advanced regulatory regimes, like the EU."
A Future Without Privacy?
As crypto hacks continue to surge, it's clear that privacy will play a critical role in protecting investors' assets. But can Hinkal's Invisible Wallet truly make a difference?
"The solution is not to sacrifice one goal for the other," said Demchuk. "Public ledgers can remain auditable, while individual users gain choice over what information they reveal."