# Why Institutional Custody Breaks on Shielded Chains | Lukas Helminger (TACEO) at ETHConf

- Channel: [ETHGlobal](https://streameth.org/ethglobal)
- Date: 2026-07-09
- Duration: 08:33
- Topics: TACEO, Lukas Helminger, ETHConf, institutional custody, shielded chains, privacy, zero knowledge proofs, ZK, collaborative SNARKs, co-SNARKs, multi-party computation, MPC, threshold signatures, ECDSA, self custody, encrypted compute, key shares, Coinbase, Fireblocks, BitGo, Aleo, Aztec, Midnight, Miden, Zcash, client side proving, Ethereum, co-Circom, Noir, Circom, private payments, private yield, tokenization, identity, regulated entities, Dan Boneh, on-chain verification, cryptography
- Watch: https://streameth.org/watch/yt-Lcm9ilGc0G8
- YouTube: https://www.youtube.com/watch?v=Lcm9ilGc0G8

## Description

In this talk, Lukas Helminger from TACEO presents a problem his team discovered in recent weeks: why institutional custody breaks on shielded chains. TACEO is building a network for encrypted compute focused on the identity and finance layers. He frames the stakes by looking at the scale of custody today, citing Coinbase holding roughly $300 billion in assets under custody at the market's height (including most ETFs), BitGo not far behind, and Fireblocks securing around $10 trillion in transaction volume across over 2,000 institutions. This makes institutional custody critically important to crypto itself. He then surveys the privacy renaissance of recent months, highlighting ZK based projects like Aleo, Aztec, Midnight, Miden, and Zcash, plus Ethereum's roadmap toward client side proving. All of these models assume self custody, where you hold your own key and run your own prover so the secret never leaves your hands for maximum privacy.

Lukas explains the tension: the institutional world cannot rely on a single entity holding a key, since that creates unacceptable risk for regulated entities. State of the art institutional custody instead splits the key into shares (for example a customer share, a custodian share, and a backup share) so no party ever holds the whole secret, and uses threshold signatures, a form of multi-party computation, to authorize transactions without ever reconstructing the key in one place, with ECDSA being a commonly thresholdized algorithm. The problem is that on shielded chains, transactions are authorized not by signatures but by zero knowledge proofs, which are far more complex, and none of the existing custodians have a way to thresholdize a ZK proof. He presents the solution from academia: collaborative SNARKs (co-SNARKs), introduced about four years ago by Dan Boneh and Alex, which place the zero knowledge proof inside a multi-party computation protocol so the entire proving system is thresholdized, producing a proof indistinguishable from a standard one that verifies on chain without protocol changes. He shares that TACEO has been building this for over two and a half years, with a network live for two months doing 100,000 transactions per day across private payments, yield, and tokenization, and tooling for co-Circom and Noir with surprisingly low performance overhead. He closes inviting custodians who need to onboard shielded assets to talk, since this is a key unaddressed blocker to bringing privacy to institutions.

00:00 Introduction
00:12 What TACEO Is Building
00:30 A Problem Hidden in Plain Sight
00:52 The Scale of Custody Today
01:25 Fireblocks and $10 Trillion in Volume
01:52 The Privacy Renaissance
02:32 Why These Models Assume Self Custody
02:57 Why Single Key Custody Fails Institutions
03:24 How State of the Art Custody Splits Keys
04:01 Threshold Signatures and Multi-Party Computation
04:35 Why ECDSA Is Commonly Thresholdized
05:08 Where Things Break in the ZK World
05:43 Collaborative SNARKs From Academia
06:17 How Co-SNARKs Thresholdize Proving
06:39 How Far TACEO Has Come
07:11 Tooling for Co-Circom and Noir
07:30 Why the Performance Overhead Is Low
07:51 A Call to Custodians
08:26 Closing

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