Bitcoin and Lightning Privacy with Stacked

Written by Brandon - Stacked Team

Updated June 2026

Privacy at Stacked

Stacked is a regulated New Zealand business. We have compliance obligations that require us to collect and retain certain information about our customers and their use of our services.

That means Stacked is not an anonymous way to buy or sell bitcoin. When you use Stacked, we may know your identity, account details, payment information, bitcoin buy and sell history, and, for merchant customers, relevant transaction history.

We take the responsibility of protecting this information seriously. We work to keep customer data secure, limit access to it, and use it only for legitimate business, security, support, and compliance purposes.

There are a few important privacy realities to understand when using Stacked:

• We know your identity and your history of bitcoin buys and sells through Stacked.
• We may know information about deposits, withdrawals, orders, and merchant payments processed through Stacked.
• We may be required to report or provide information to regulators, government agencies, or law enforcement where the law requires it.
• Your bank or payment provider may also have information about payments you make to or receive from Stacked.

Recent regulatory changes mean that some virtual asset transfers may be subject to reporting or information-sharing requirements, similar in some ways to international wire transfer rules. Where those rules apply, Stacked must follow its legal obligations.

However, your use of Stacked can still offer important privacy protections, depending on how bitcoin is delivered.

• Your personal details provided during onboarding are not shared with third parties who do not already have them, except where required for legitimate business, security, compliance, or legal reasons. 
• If bitcoin is delivered to you over the Lightning Network, Stacked cannot follow your future payments or later movements into cold storage.
• If bitcoin is delivered into your Stacked Wallet, which is a self-custodial wallet based on Spark, Stacked does not have a live view of your wallet balance or your future transactions after delivery.
• If bitcoin is delivered directly on-chain, the withdrawal transaction is recorded publicly on the Bitcoin blockchain. In that case, the privacy tradeoff is different because on-chain transactions can be viewed and analysed by anyone.

This distinction matters. On-chain bitcoin is public by design. Lightning and Spark do not publish individual wallet payments to the Bitcoin blockchain in the same way, which means Stacked (or anyone requesting information from Stacked) cannot simply monitor what you do next after funds are delivered through those systems.

We want you to be fully aware of the choice you are making when using Stacked in terms of your financial privacy. For more information, please read our Privacy Policy.

What Stacked can and cannot see

It helps to separate platform activity from wallet activity.

What Stacked can see

When you use Stacked to buy or sell bitcoin, we can see the activity that happens on the Stacked platform. This may include:

• Your customer profile and verification information.
• Your buy and sell orders.
• Payment information connected to those orders.
• The fact that bitcoin was delivered to your Stacked Wallet or to another wallet you provided.
• Information we are required to collect or retain for compliance, fraud prevention, and support.

What Stacked cannot see after delivery to self-custody

Stacked Wallet is a self-custodial wallet based on Spark. When bitcoin is delivered into your Stacked Wallet, you control the wallet. Stacked does not custody those funds for you.

That means Stacked does not have a live view of:

• Your Stacked Wallet balance after delivery.
• Future transactions you make from your Stacked Wallet.
• Where you later send funds from your self-custody wallet.
• Payments you make directly from the wallet after the bitcoin has been delivered.

The same general principle applies when you withdraw bitcoin to an external self-custody wallet. Stacked may know the withdrawal or delivery event, but we cannot monitor what you do with those funds after they are in your self-custody wallet.

This is an important difference between a regulated bitcoin platform and a self-custodial wallet. Stacked has records of the regulated platform activity. Stacked does not control or monitor your self-custody wallet after delivery.

For more detail about how we handle personal information, please read our Privacy Policy.

 

Privacy with Stacked Wallet

Stacked Wallet gives you a self-custodial way to use bitcoin with Lightning and Spark. It is designed to make bitcoin easier to use without turning your wallet into a custodial account.

From a privacy perspective, this matters because Stacked Wallet creates a separation between:

• Stacked platform activity, such as buying or selling bitcoin through your Stacked account; and
• Self-custody wallet activity, such as later sending, spending, or moving bitcoin from your wallet.

Stacked knows when bitcoin is bought or sold through the platform. But once funds enter your self-custody wallet, Stacked does not see your ongoing wallet balance or future wallet transactions.

That does not mean your activity is perfectly private from everyone. Bitcoin and Lightning privacy depends on the network, the wallet technology being used, the recipient, any service providers involved, and whether funds are later moved on-chain.

The practical point is this: Stacked Wallet gives you self-custody and a stronger privacy boundary than a custodial account, but it should not be confused with anonymity.

 

Privacy on the Lightning Network

The Lightning Network can offer privacy advantages compared with ordinary on-chain bitcoin transactions.

On-chain bitcoin transactions are recorded publicly on the Bitcoin blockchain. Anyone can see transaction amounts, addresses, and transaction history, even if they do not automatically know who controls each address.

Lightning works differently. Lightning payments are not published to the Bitcoin blockchain as individual on-chain transactions. Instead, payments are routed across a network of Lightning channels.

Lightning uses onion routing. In simple terms, this means that routing participants generally only know the node before them and the node after them in the payment route. They do not normally see the full payment path, the payment purpose, or the full relationship between sender and recipient.

That gives Lightning useful privacy properties, especially for senders. But it is not perfect privacy.

A few things still matter:

• Recipients know they received a payment. If you are paying a merchant, service provider, or person, they may know who you are from the context of the payment.
• Custodial wallets can see more. If you use a custodial Lightning wallet, the wallet provider may know your balance, payment history, and payment destinations.
• Self-custodial wallets may still use service providers. Wallets using Lightning Service Providers, Spark, or similar infrastructure may involve technical metadata that differs from running your own node.
• On-chain movements are public. If funds are moved to or from the Bitcoin blockchain, those on-chain transactions are publicly visible.
• Network analysis is still possible. Depending on payment routing, wallet type, timing, amounts, and counterparties, some information may be inferred by network participants or outside observers.

Lightning improves practical payment privacy, but it does not make every payment invisible or anonymous.

 

Privacy tradeoffs by wallet type

Different wallet types create different privacy tradeoffs. Choosing a wallet is not just about ease of use. It is also about who can see what, who controls the funds, and what infrastructure the wallet depends on.

Custodial Lightning wallets

Custodial wallets are simple, but the provider controls the bitcoin on your behalf. Because the provider runs the wallet infrastructure, it may be able to see your balance, transaction history, and payment destinations.

Custodial wallets can be useful for small amounts or casual payments, but they offer weaker financial privacy and weaker control than self-custody.

Self-custodial wallets using service providers

Many modern self-custodial wallets improve the user experience by relying on service providers for routing, liquidity, backup, or coordination. This can include Lightning Service Providers, Spark infrastructure, or similar systems.

These wallets can give you control of your funds without forcing you to run your own node. But they may still involve some technical metadata being visible to service providers or network participants. The exact tradeoff depends on the wallet design.

Running your own node

Running your own Bitcoin and Lightning node can give you the most control and reduce reliance on third-party infrastructure. It can also improve privacy in some ways.

But running your own node is much more complex. It requires technical knowledge, maintenance, liquidity management, backups, and operational discipline. For most users, it is not the easiest starting point.

eCash and federated systems

Some emerging bitcoin systems, such as eCash or federated custody models, can offer strong privacy characteristics for users. These systems may hide individual user activity well, especially when many people use the same system.

But they come with their own tradeoffs, including reliance on a federation or mint, different recovery models, and different risks from ordinary self-custody.

 

A plain-English summary

Stacked is a regulated business, so we must collect and retain certain customer and transaction information. We may also be required to report or provide information where the law requires it.

At the same time, Stacked Wallet is self-custodial. When funds are delivered into your Stacked Wallet, Stacked does not have a live view of your wallet balance or your future transactions. We know the platform activity. We do not monitor your self-custody wallet after delivery.

Lightning and Spark can also improve the practical privacy of bitcoin payments compared with using only on-chain transactions, because individual payments are not simply published to the Bitcoin blockchain in the same way. But this does not mean your activity is anonymous or private from everyone.

The best way to think about privacy is as a set of tradeoffs:

• Regulated services know regulated platform activity.
• Self-custody gives you more control and a clearer privacy boundary.
• Custodial wallets are convenient but give the provider more visibility and control.
• Lightning can improve payment privacy, but it is not perfect anonymity.
• On-chain bitcoin transactions are public and should be treated that way.

At Stacked, we believe people should have practical tools for using bitcoin while keeping meaningful control over their money and financial information. Privacy is not all-or-nothing. It depends on the services, wallets, and networks you choose to use.