According to reports from The Block, Aztec Labs has acquired Obsidion, the company behind the open-source privacy-preserving identity verification tool ZKPassport. The acquisition brings the entire Obsidion team, including co-founders Michael Elliot and Theo Madzou, into the Aztec Labs organization to continue developing ZKPassport and contribute to additional products. Other aspects of the deal were not disclosed in the announcement. As reported by ChainCatcher, this strategic move positions Aztec Labs to embed privacy-preserving identity verification directly into its Ethereum Layer 2 ecosystem, offering built-in, compliant identity verification for decentralized applications.
As reported by The Block, Aztec Labs raised approximately ₹5,000 crore ($60 million) worth of ETH through its AZTEC token sale in December. This funding follows the company's previous venture capital investments of about ₹10,000 crore ($125 million) from notable investors including a16z, Paradigm, and Ethereum co-founder Vitalik Buterin. The acquisition comes amid a wave of consolidation in the crypto industry, with some well-established firms being acquired by legacy institutions.
According to The Block, ZKPassport is a privacy and identity solution that enables users to prove attributes like age, nationality, and 'proof of humanity' cryptographically without revealing other aspects of their identity. Users scan their passport or government ID via NFC chips on their phone to generate a unique cryptographic signature. As reported by ChainCatcher, the technology has already been successfully deployed for event ticketing at Devconnect and compliance verification in Aztec community token sales. For Aztec Labs, which is building a private, encrypted version of Ethereum, integrating ZKPassport's technology could enable compliant yet privacy-preserving identity checks, which is critical for many decentralized finance (DeFi) applications and regulated entities seeking to operate on the blockchain without compromising user anonymity.
As reported by The Block, Aztec Labs plans to maintain the ZKPassport protocol and iOS mobile app as an open-source project. Aztec Labs CEO Joe Andrews stated that the Obsidion team has built something rare: a privacy product that meets real-world verification requirements without exposing user data. The acquisition also strengthens Aztec Labs' talent pool, with Elliott and Mazu bringing deep expertise in zero-knowledge cryptography and identity systems that will likely accelerate product development. The deal represents a strategic move to offer smoother access to DeFi protocols that require identity checks, without requiring users to upload sensitive documents to third-party servers, while providing developers with a ready-made privacy layer for compliant applications on Aztec's network.
According to recent reports, Obsidion itself has been described as a wallet designed for private payment interactions on the Aztec network. By acquiring the team and technology behind both the wallet and ZKPassport, Aztec Labs is pulling its identity and payment layers in-house. The broader Aztec Network runs on Noir, a domain-specific programming language designed for writing zero-knowledge circuits. ZKPassport was integrated into the Aztec ecosystem starting around June 2025, serving as the human verification layer on the project's testnet, and played a role during Aztec's token sale in November 2025, which raised approximately ₹4,800-5,000 crore ($59-61 million) at an initial fully diluted valuation of around ₹2,900 crore ($350 million). This acquisition creates a more vertically integrated stack, with Aztec now controlling the Layer 2 network, the zero-knowledge programming language, the identity verification protocol, and a wallet for private transactions.
