Ethereum privacy protocol Nocturne Labs ceases operations

Nocturne Labs, a well-known Ethereum-native privacy protocol, announces it is ceasing operations. This decision was made public via a post on the social media platform X. Nocturne was supported by prominent figures in the crypto world, including Ethereum co-founder Vitalik Buterin.

The decision is unexpected

The company, which had built a privacy protocol last year, has decided to close the company. Nocturne did not provide specific reasons for ceasing operations.

Nocturne Labs originally aimed to integrate private accounts and transactions into the Ethereum ecosystem. In October 2023, the company raised $6 million in a seed funding round led by Bain Capital Crypto and Polychain Capital, with participation from Buterin.

Transition period for users

Despite the closure, users can still perform recordings via the Nocturne frontend until the end of June. Afterwards, the withdrawal process will transition to a self-service system via GitHub, with detailed instructions on how to withdraw funds using Nocturne’s CLI tool.

The company wrote: “The frontend will remain open for recording until the end of this month. From there, we will transition the withdrawal process to self-service via this GitHub repo with detailed instructions on how to eject funds using our CLI tool.”

Decrease in total locked value

Nocturne currently has a total locked value (TVL) of over $129,000, down sharply from the $455,000 reported on January 22 when the closure of Nocturne V1 was announced. These figures come from DefiLlama, a platform that tracks data on decentralized finance (DeFi).

On January 22, Nocturne reported via a post on We will have more to share about the new product in the coming months.”

Impact of the broader crypto market

The closure of Nocturne Labs comes amid increased attention on privacy-focused cryptocurrency projects since August 2022, when crypto-mix protocol Tornado Cash was blacklisted by the US government. The developer of Tornado Cash, Alexey Pertsev, was found guilty of money laundering on May 14, despite Tornado Cash being a non-custodial protocol. This means that the funds mixed through the protocol are never managed by the protocol itself.