Maelstrom backs Bitcoin privacy – Days after dumping its entire Zcash bag

Maelstrom, the family office of BitMEX co-founder Arthur Hayes, is pushing further into crypto privacy, with two of the four developers it funds through its Bitcoin Grant Program now working full-time on tools that make transactions harder to trace.

The fund disclosed the split in its first annual report on the program, which has paid open-source developers in monthly Bitcoin installments under 12-month contracts since October 2024 and caps grant stacking at $400,000 a year.

Benalleng and Macgyver handle the privacy work, while Rkrux and Stratospher contribute to Bitcoin Core, the network’s main software. Maelstrom framed the grants as long-term backing for Bitcoin’s technical development.

The report said,

The program is aiming to provide its grantees with relatively stable and long term funding. The developers are working on open source technology to improve Bitcoin, with respect to scalability, robustness and privacy.

The two privacy projects attack traceability from different angles. One lets the sender and receiver jointly add inputs to a single transaction so it no longer resembles a standard payment, breaking common surveillance heuristics.

The other lets recipients accept funds without reusing or publishing addresses.

Bitcoin wallets and Solana race to close the same privacy gap

Vikrant Sharma, founder of Cake Wallet, told AMBCrypto that the wallet’s Bitcoin Silent Payments and Payjoin v2 integration fills a gap Bitcoin left open.

“People want to use Bitcoin on the go and they don’t want to reveal their history and balances and all that. Bitcoin is open and permissionless but without privacy, it’s a surveillance tool.”

The same push is reshaping other chains. Helius’s acquisition of Light Protocol aims to build a programmable, fully on-chain privacy layer for Solana, covering encrypted balances and payments for both retail and institutional users.

Maelstrom exits Zcash even as it funds Bitcoin privacy

The grants land as Hayes confirms Maelstrom has sold its entire position in Zcash [$ZEC], one of the largest privacy tokens.

He tied the exit to a vulnerability in Zcash’s Orchard pool that could have allowed counterfeit $ZEC to be minted undetected. Hayes said he viewed actual minting as unlikely but could not cryptographically rule it out, and he left the door open to re-entry.

He said,

We [Maelstrom] will consistently re-evaluate our thinking and if my assumptions are proven incorrect, will rebuy, hopefully at lower prices.

Privacy tokens remain a fraction of the broader market, with a combined capitalization near $51 billion led by Zcash [$ZEC], Monero [XMR], and Dash [DASH], and press-time trading volume of $3.3 billion.

Final Summary

• Arthur Hayes’ family office Maelstrom is funding Bitcoin privacy work, with half its grant recipients now focused on making transactions harder to trace.
• The move comes just after Maelstrom sold its entire $ZEC holding over a security scare.