According to EU-Startups, Paris-based confidential finance startup Zaiffer has emerged from stealth with €2 million in funding to bring privacy to decentralized finance. The company is launching confidential tokens, or cTokens, backed by joint investment from cryptography company Zama and Web3 venture builder PyratzLabs. Founded in 2025 and led by CEO Bilal El Almay, Zaiffer uses fully homomorphic encryption technology to process encrypted transactions in under five seconds. The protocol allows any ERC-20 token to be converted into confidential versions while preserving sender and receiver trails for compliance. A demo is already live on Sepolia testnet with full mainnet rollout expected by November 2025, including tools for embedding cToken features directly into DeFi products.
The Privacy-Compliance Balancing Act
Here’s the thing about DeFi right now – it’s stuck between two extremes. You’ve got complete transparency where everyone can see your every transaction, or you’ve got privacy coins and mixers that regulators absolutely hate. Zaiffer is trying to thread that needle with what they’re calling “confidential tokens.” Basically, you can hide the amounts but still show who’s sending to whom when needed.
And that selective disclosure feature is actually pretty clever. Think about it – institutions want to use DeFi but they can’t exactly have their entire treasury management strategy visible to competitors. At the same time, they need to prove they’re not laundering money or breaking sanctions. This gives them both. They can do confidential payroll or OTC trades without moving off-chain, then grant temporary access to auditors when required.
France’s Crypto Moment
What’s really interesting here is the Paris connection. You’ve got Zaiffer and their investor Zama both based in the same city, with Zama having raised €49 million earlier this year for the same underlying FHE technology. That’s not a coincidence – France is quietly building a serious encryption and blockchain hub.
But here’s my question: can FHE really go mainstream? For years, fully homomorphic encryption has been this theoretical thing that academics loved but nobody could use because it was too slow. Zaiffer claims they’re processing encrypted transactions in under five seconds, which if true, is actually pretty impressive. That’s the kind of performance that could make this practical for real financial applications.
The Institutional Play
Look, the timing here is everything. Institutions have been circling DeFi for years but keep getting scared off by the transparency. They don’t want their competitors seeing their moves, and compliance teams have nightmares about explaining privacy coins to regulators. Zaiffer’s approach of working with existing tokens and wallets without needing bridges or infrastructure changes could actually work.
The €2 million raise seems modest compared to some of the other European privacy DeFi rounds mentioned – Austria’s TACEO got €4.8 million, the UK’s BOB raised €8.1 million. But sometimes smaller, targeted funding is smarter when you’re building on existing technology rather than starting from scratch. They’re essentially creating a privacy layer rather than rebuilding the entire stack.
What’s Next
If Zaiffer can deliver on their November 2025 mainnet promise and the performance holds up, this could fundamentally change how institutions interact with DeFi. The roadmap includes confidential AMMs, lending, and perpetuals – basically the whole DeFi stack but with privacy switches.
But the real test will be adoption. Will developers actually integrate this into their products? Will regulators accept this as compliant? And will users trust that the selective disclosure actually works as promised? Those are the billion-euro questions. For now though, it’s refreshing to see someone trying to solve the privacy-compliance dilemma rather than just picking one side.
