AI Agents Are Coming On-Chain — and Transparency May Be the Weakest Link

As artificial intelligence (AI) agents begin to interact directly with blockchain-based financial systems, a long-simmering tension in crypto is moving to the forefront: whether radical transparency is compatible with security, institutional adoption, and national resilience.

That was a central theme in a recent Ecoinimist interview with Yaya Fanusie, the global head of policy at Aleo, who argues that the next phase of on-chain finance will force a rethink of how blockchains are designed — particularly as autonomous AI systems become more capable.

Fanusie, a former U.S. intelligence official who spent years analyzing illicit finance and national security threats, says the rise of AI-driven actors interacting with transparent ledgers creates a new and underappreciated attack surface.

“If you have an ecosystem where everything is transparent, it makes it very easy for those who want to attack something or hack something,” Fanusie said, pointing to how open transaction data allows attackers to “strategize, identify, [and] plan” their targets.

AI Agents Change the Threat Model

The concern is not hypothetical. Fanusie referenced recent research showing how AI agents can be used to probe decentralized finance systems for vulnerabilities, a signal of what may come as autonomous software becomes more sophisticated and more deeply embedded in on-chain markets.

Also read: New Anthropic Research Finds AI Hackers Are Now Economically Viable—and Getting Cheaper Fast

In Fanusie’s view, AI simply accelerates a dynamic that already exists. Transparent blockchains, he argues, are inherently easier to surveil — not just by analysts and regulators, but by hostile actors ranging from cybercriminals to nation-states.

As AI agents begin managing wallets, executing trades, and interacting with smart contracts autonomously, the stakes rise sharply — especially once institutional capital is involved.

Why Institutions Change Everything

Fanusie emphasized that transparency was manageable when blockchains were largely the domain of individuals and small-scale experimentation. This equation changes when large pools of capital, treasuries, or tokenized securities move on-chain.

“When you have institutional assets, that’s when you get actual high vulnerabilities,” he said. “You get incentives by states to hack, and even by businesses.”

From a national security perspective, Fanusie sees fully transparent financial infrastructure as a liability. Over years of research into China, Russia, Iran, and North Korea, he came to a stark conclusion: open ledgers can make it easier for adversaries to map economic activity and identify pressure points.

“The best security against those actors in the digital finance space is having digital financial infrastructure which is private — or which allows privacy,” he said. “You can’t have a financial system that is up for view for everyone.”

Privacy by Design, Not as a Patch

That belief underpins Aleo’s approach. The layer-1 blockchain is built using zero-knowledge proofs, making transaction details confidential by default rather than relying on add-on privacy tools.

Fanusie is skeptical that privacy can be reliably bolted onto transparent blockchains after the fact.

“Whatever solutions people build on these transparent blockchains are going to be a bit of a whack-a-mole,” he said, warning that layered privacy approaches create complexity and new vulnerabilities. “The bad actor is always going to be looking for those gaps.”

He predicts that many institutional pilots will stall as compliance teams and regulators confront these issues in practice — particularly around data protection and financial surveillance.

The Authoritarian Risk

Beyond hacking and theft, Fanusie raised a broader concern: that digital finance without strong privacy guarantees risks drifting toward authoritarian control, especially when combined with programmability.

“Digital finance without privacy tech is digital authoritarianism, eventually,” he said, arguing that societies that value individual autonomy must embed confidentiality into financial infrastructure from the start.

He also voiced skepticism about central bank digital currencies that promise privacy without clearly defined technical safeguards, warning that once transaction data is exposed — even lawfully — it may be impossible to fully contain.

A Fork in the Road

As AI agents, tokenized assets, and regulated institutions converge on blockchain rails, Fanusie believes the industry is approaching a fork in the road. 

Either privacy becomes a core architectural principle, or on-chain finance risks becoming both insecure and politically fraught.