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index bc821716..c008b597 100644
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diff --git a/artifacts/lez/programs/wrapped_token.bin b/artifacts/lez/programs/wrapped_token.bin
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diff --git a/integration_tests/tests/auth_transfer/private.rs b/integration_tests/tests/auth_transfer/private.rs
index 655ca1a9..bc5c650b 100644
--- a/integration_tests/tests/auth_transfer/private.rs
+++ b/integration_tests/tests/auth_transfer/private.rs
@@ -624,7 +624,7 @@ async fn prove_init_with_commitment_root(
     let npk = NullifierPublicKey::from(&nsk);
     let vpk = ViewingPublicKey::from_bytes(vec![4_u8; 1184]).unwrap();
     let recipient_account_id = AccountId::for_regular_private_account(&npk, &vpk, 0);
-    let recipient = AccountWithMetadata::new(Account::default(), false, recipient_account_id);
+    let recipient = AccountWithMetadata::new(Account::default(), true, recipient_account_id);
 
     let (output, _) = execute_and_prove(
         vec![sender_pre, recipient],
@@ -633,7 +633,7 @@ async fn prove_init_with_commitment_root(
         })?,
         vec![
             InputAccountIdentity::Public,
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk,
                 random_seed: [0; 32],
                 npk,
diff --git a/integration_tests/tests/tps.rs b/integration_tests/tests/tps.rs
index 7141303e..bfcd4c64 100644
--- a/integration_tests/tests/tps.rs
+++ b/integration_tests/tests/tps.rs
@@ -272,7 +272,7 @@ fn build_privacy_transaction() -> PrivacyPreservingTransaction {
     let recipient_npk = NullifierPublicKey::from(&recipient_nsk);
     let recipient_pre = AccountWithMetadata::new(
         Account::default(),
-        false,
+        true,
         AccountId::for_regular_private_account(&recipient_npk, &recipient_vpk, 0),
     );
 
@@ -299,7 +299,7 @@ fn build_privacy_transaction() -> PrivacyPreservingTransaction {
                 membership_proof: proof,
                 identifier: 0,
             },
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk: recipient_vpk,
                 random_seed: [0; 32],
                 npk: recipient_npk,
diff --git a/lee/privacy_preserving_circuit/src/output.rs b/lee/privacy_preserving_circuit/src/output.rs
index c5d962d6..57ab588a 100644
--- a/lee/privacy_preserving_circuit/src/output.rs
+++ b/lee/privacy_preserving_circuit/src/output.rs
@@ -119,7 +119,7 @@ pub fn compute_circuit_output(
                     new_nonce,
                 );
             }
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk,
                 random_seed,
                 npk,
@@ -135,8 +135,8 @@ pub fn compute_circuit_output(
                     "Found new private account with non default values",
                 );
                 assert!(
-                    !pre_state.is_authorized,
-                    "Found new private account marked as authorized."
+                    pre_state.is_authorized,
+                    "Found new private account marked as unauthorized."
                 );
 
                 let new_nullifier = (
diff --git a/lee/state_machine/core/src/circuit_io.rs b/lee/state_machine/core/src/circuit_io.rs
index 8db29342..47b97833 100644
--- a/lee/state_machine/core/src/circuit_io.rs
+++ b/lee/state_machine/core/src/circuit_io.rs
@@ -49,7 +49,7 @@ pub enum InputAccountIdentity {
     },
     /// Init of a standalone private account the caller does not own (e.g. a recipient who
     /// doesn't yet exist on chain). No `nsk`, no membership proof.
-    PrivateUnauthorized {
+    PrivateForeignInit {
         vpk: ViewingPublicKey,
         random_seed: [u8; 32],
         npk: NullifierPublicKey,
@@ -127,7 +127,7 @@ impl InputAccountIdentity {
             Self::Public
             | Self::PrivateAuthorizedInit { .. }
             | Self::PrivateAuthorizedUpdate { .. }
-            | Self::PrivateUnauthorized { .. } => None,
+            | Self::PrivateForeignInit { .. } => None,
         }
     }
 }
diff --git a/lee/state_machine/src/privacy_preserving_transaction/circuit/tests.rs b/lee/state_machine/src/privacy_preserving_transaction/circuit/tests.rs
index fb66186b..4a82ad9b 100644
--- a/lee/state_machine/src/privacy_preserving_transaction/circuit/tests.rs
+++ b/lee/state_machine/src/privacy_preserving_transaction/circuit/tests.rs
@@ -60,7 +60,7 @@ fn prove_privacy_preserving_execution_circuit_public_and_private_pre_accounts()
 
     let recipient_account_id =
         AccountId::for_regular_private_account(&recipient_keys.npk(), &recipient_keys.vpk(), 0);
-    let recipient = AccountWithMetadata::new(Account::default(), false, recipient_account_id);
+    let recipient = AccountWithMetadata::new(Account::default(), true, recipient_account_id);
 
     let balance_to_move: u128 = 37;
 
@@ -89,7 +89,7 @@ fn prove_privacy_preserving_execution_circuit_public_and_private_pre_accounts()
         Program::serialize_instruction(balance_to_move).unwrap(),
         vec![
             InputAccountIdentity::Public,
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk: recipient_keys.vpk(),
                 random_seed: [0; 32],
                 npk: recipient_keys.npk(),
@@ -144,7 +144,7 @@ fn prove_privacy_preserving_execution_circuit_fully_private() {
 
     let recipient_account_id =
         AccountId::for_regular_private_account(&recipient_keys.npk(), &recipient_keys.vpk(), 0);
-    let recipient = AccountWithMetadata::new(Account::default(), false, recipient_account_id);
+    let recipient = AccountWithMetadata::new(Account::default(), true, recipient_account_id);
     let balance_to_move: u128 = 37;
 
     let mut commitment_set = CommitmentSet::with_capacity(2);
@@ -205,7 +205,7 @@ fn prove_privacy_preserving_execution_circuit_fully_private() {
                     .expect("sender's commitment must be in the set"),
                 identifier: 0,
             },
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk: recipient_keys.vpk(),
                 random_seed: [0; 32],
                 npk: recipient_keys.npk(),
@@ -249,12 +249,12 @@ fn init_note_view_tag_is_derived_from_account_keys() {
     let keys = test_private_account_keys_1();
     let identifier: u128 = 0;
     let account_id = AccountId::for_regular_private_account(&keys.npk(), &keys.vpk(), identifier);
-    let account = AccountWithMetadata::new(Account::default(), false, account_id);
+    let account = AccountWithMetadata::new(Account::default(), true, account_id);
 
     let (output, proof) = execute_and_prove(
         vec![account],
         Program::serialize_instruction(()).unwrap(),
-        vec![InputAccountIdentity::PrivateUnauthorized {
+        vec![InputAccountIdentity::PrivateForeignInit {
             vpk: keys.vpk(),
             random_seed: [0; 32],
             npk: keys.npk(),
@@ -318,7 +318,7 @@ fn circuit_fails_when_chained_validity_windows_have_empty_intersection() {
     let account_keys = test_private_account_keys_1();
     let pre = AccountWithMetadata::new(
         Account::default(),
-        false,
+        true,
         AccountId::for_regular_private_account(&account_keys.npk(), &account_keys.vpk(), 0),
     );
 
@@ -342,7 +342,7 @@ fn circuit_fails_when_chained_validity_windows_have_empty_intersection() {
     let result = execute_and_prove(
         vec![pre],
         instruction,
-        vec![InputAccountIdentity::PrivateUnauthorized {
+        vec![InputAccountIdentity::PrivateForeignInit {
             vpk: account_keys.vpk(),
             random_seed: [0; 32],
             npk: account_keys.npk(),
@@ -493,7 +493,7 @@ fn private_pda_withdraw() {
 /// Shared regular private account: receives funds via `authenticated_transfer` directly,
 /// no custom program needed. This demonstrates the non-PDA shared account flow where
 /// keys are derived from GMS via `derive_keys_for_shared_account`. The shared account
-/// uses the standard unauthorized private account path and works with auth-transfer's
+/// uses the standard foreign private account path and works with auth-transfer's
 /// transfer path like any other private account.
 #[test]
 fn shared_account_receives_via_simple_transfer() {
@@ -514,9 +514,9 @@ fn shared_account_receives_via_simple_transfer() {
         sender_id,
     );
 
-    // Recipient: shared private account (new, unauthorized)
+    // Recipient: shared private account (new, foreign)
     let shared_account_id = AccountId::from((&shared_npk, &shared_keys.vpk(), shared_identifier));
-    let recipient = AccountWithMetadata::new(Account::default(), false, shared_account_id);
+    let recipient = AccountWithMetadata::new(Account::default(), true, shared_account_id);
 
     let balance_to_move: u128 = 100;
     let instruction = Program::serialize_instruction(balance_to_move).unwrap();
@@ -526,7 +526,7 @@ fn shared_account_receives_via_simple_transfer() {
         instruction,
         vec![
             InputAccountIdentity::Public,
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk: shared_keys.vpk(),
                 random_seed: [0; 32],
                 npk: shared_npk,
@@ -578,10 +578,10 @@ fn private_authorized_init_encrypts_regular_kind_with_identifier() {
     );
 }
 
-/// `PrivateUnauthorized` with a non-default identifier produces a ciphertext that decrypts
+/// `PrivateForeignInit` with a non-default identifier produces a ciphertext that decrypts
 /// to `PrivateAccountKind::Regular` carrying the correct identifier.
 #[test]
-fn private_unauthorized_init_encrypts_regular_kind_with_identifier() {
+fn private_foreign_init_encrypts_regular_kind_with_identifier() {
     let program = crate::test_methods::claimer();
     let keys = test_private_account_keys_1();
     let identifier: u128 = 99;
@@ -592,12 +592,12 @@ fn private_unauthorized_init_encrypts_regular_kind_with_identifier() {
         &Nonce::private_account_nonce_init(&recipient_id),
     );
     let ssk = SharedSecretKey::encapsulate_deterministic(&keys.vpk(), &esk).0;
-    let recipient = AccountWithMetadata::new(Account::default(), false, recipient_id);
+    let recipient = AccountWithMetadata::new(Account::default(), true, recipient_id);
 
     let (output, _) = execute_and_prove(
         vec![recipient],
         Program::serialize_instruction(()).unwrap(),
-        vec![InputAccountIdentity::PrivateUnauthorized {
+        vec![InputAccountIdentity::PrivateForeignInit {
             vpk: keys.vpk(),
             random_seed: [0; 32],
             npk: keys.npk(),
@@ -731,7 +731,7 @@ fn private_pda_init_identifier_mismatch_fails() {
     let npk = keys.npk();
     let seed = PdaSeed::new([42; 32]);
     let account_id = AccountId::for_private_pda(&program.id(), &seed, &npk, &keys.vpk(), 5);
-    let pre_state = AccountWithMetadata::new(Account::default(), false, account_id);
+    let pre_state = AccountWithMetadata::new(Account::default(), true, account_id);
 
     let result = execute_and_prove(
         vec![pre_state],
diff --git a/lee/state_machine/src/state/tests/circuit.rs b/lee/state_machine/src/state/tests/circuit.rs
index 0b234b30..17492824 100644
--- a/lee/state_machine/src/state/tests/circuit.rs
+++ b/lee/state_machine/src/state/tests/circuit.rs
@@ -49,7 +49,7 @@ fn circuit_fails_if_invalid_auth_keys_are_provided() {
     );
     let private_account_2 = AccountWithMetadata::new(
         Account::default(),
-        false,
+        true,
         (&recipient_keys.npk(), &recipient_keys.vpk(), 0),
     );
 
@@ -69,7 +69,7 @@ fn circuit_fails_if_invalid_auth_keys_are_provided() {
                 membership_proof: (0, vec![]),
                 identifier: 0,
             },
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk: recipient_keys.vpk(),
                 random_seed: [0; 32],
                 npk: recipient_keys.npk(),
@@ -103,7 +103,7 @@ fn circuit_should_fail_if_new_private_account_with_non_default_balance_is_provid
             balance: 1,
             ..Account::default()
         },
-        false,
+        true,
         (&recipient_keys.npk(), &recipient_keys.vpk(), 0),
     );
 
@@ -119,7 +119,7 @@ fn circuit_should_fail_if_new_private_account_with_non_default_balance_is_provid
                 membership_proof: (0, vec![]),
                 identifier: 0,
             },
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk: recipient_keys.vpk(),
                 random_seed: [0; 32],
                 npk: recipient_keys.npk(),
@@ -153,7 +153,7 @@ fn circuit_should_fail_if_new_private_account_with_non_default_program_owner_is_
             program_owner: [0, 1, 2, 3, 4, 5, 6, 7],
             ..Account::default()
         },
-        false,
+        true,
         (&recipient_keys.npk(), &recipient_keys.vpk(), 0),
     );
 
@@ -169,7 +169,7 @@ fn circuit_should_fail_if_new_private_account_with_non_default_program_owner_is_
                 membership_proof: (0, vec![]),
                 identifier: 0,
             },
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk: recipient_keys.vpk(),
                 random_seed: [0; 32],
                 npk: recipient_keys.npk(),
@@ -203,7 +203,7 @@ fn circuit_should_fail_if_new_private_account_with_non_default_data_is_provided(
             data: b"hola mundo".to_vec().try_into().unwrap(),
             ..Account::default()
         },
-        false,
+        true,
         (&recipient_keys.npk(), &recipient_keys.vpk(), 0),
     );
 
@@ -219,7 +219,7 @@ fn circuit_should_fail_if_new_private_account_with_non_default_data_is_provided(
                 membership_proof: (0, vec![]),
                 identifier: 0,
             },
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk: recipient_keys.vpk(),
                 random_seed: [0; 32],
                 npk: recipient_keys.npk(),
@@ -253,6 +253,54 @@ fn circuit_should_fail_if_new_private_account_with_non_default_nonce_is_provided
             nonce: Nonce(0xdead_beef),
             ..Account::default()
         },
+        true,
+        (&recipient_keys.npk(), &recipient_keys.vpk(), 0),
+    );
+
+    let result = execute_and_prove(
+        vec![private_account_1, private_account_2],
+        Program::serialize_instruction(10_u128).unwrap(),
+        vec![
+            InputAccountIdentity::PrivateAuthorizedUpdate {
+                vpk: sender_keys.vpk(),
+                random_seed: [0; 32],
+                view_tag: 0,
+                nsk: sender_keys.nsk,
+                membership_proof: (0, vec![]),
+                identifier: 0,
+            },
+            InputAccountIdentity::PrivateForeignInit {
+                vpk: recipient_keys.vpk(),
+                random_seed: [0; 32],
+                npk: recipient_keys.npk(),
+                identifier: 0,
+                commitment_root: DUMMY_COMMITMENT_HASH,
+            },
+        ],
+        &program.into(),
+    );
+
+    assert!(matches!(result, Err(LeeError::CircuitProvingError(_))));
+}
+
+#[test]
+fn circuit_should_fail_if_new_private_account_is_provided_with_default_values_but_marked_as_unauthorized()
+ {
+    let program = crate::test_methods::simple_balance_transfer();
+    let sender_keys = test_private_account_keys_1();
+    let recipient_keys = test_private_account_keys_2();
+    let private_account_1 = AccountWithMetadata::new(
+        Account {
+            program_owner: program.id(),
+            balance: 100,
+            ..Account::default()
+        },
+        true,
+        (&sender_keys.npk(), &sender_keys.vpk(), 0),
+    );
+    let private_account_2 = AccountWithMetadata::new(
+        Account::default(),
+        // This should be set to true in normal circumstances
         false,
         (&recipient_keys.npk(), &recipient_keys.vpk(), 0),
     );
@@ -269,55 +317,7 @@ fn circuit_should_fail_if_new_private_account_with_non_default_nonce_is_provided
                 membership_proof: (0, vec![]),
                 identifier: 0,
             },
-            InputAccountIdentity::PrivateUnauthorized {
-                vpk: recipient_keys.vpk(),
-                random_seed: [0; 32],
-                npk: recipient_keys.npk(),
-                identifier: 0,
-                commitment_root: DUMMY_COMMITMENT_HASH,
-            },
-        ],
-        &program.into(),
-    );
-
-    assert!(matches!(result, Err(LeeError::CircuitProvingError(_))));
-}
-
-#[test]
-fn circuit_should_fail_if_new_private_account_is_provided_with_default_values_but_marked_as_authorized()
- {
-    let program = crate::test_methods::simple_balance_transfer();
-    let sender_keys = test_private_account_keys_1();
-    let recipient_keys = test_private_account_keys_2();
-    let private_account_1 = AccountWithMetadata::new(
-        Account {
-            program_owner: program.id(),
-            balance: 100,
-            ..Account::default()
-        },
-        true,
-        (&sender_keys.npk(), &sender_keys.vpk(), 0),
-    );
-    let private_account_2 = AccountWithMetadata::new(
-        Account::default(),
-        // This should be set to false in normal circumstances
-        true,
-        (&recipient_keys.npk(), &recipient_keys.vpk(), 0),
-    );
-
-    let result = execute_and_prove(
-        vec![private_account_1, private_account_2],
-        Program::serialize_instruction(10_u128).unwrap(),
-        vec![
-            InputAccountIdentity::PrivateAuthorizedUpdate {
-                vpk: sender_keys.vpk(),
-                random_seed: [0; 32],
-                view_tag: 0,
-                nsk: sender_keys.nsk,
-                membership_proof: (0, vec![]),
-                identifier: 0,
-            },
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk: recipient_keys.vpk(),
                 random_seed: [0; 32],
                 npk: recipient_keys.npk(),
@@ -781,7 +781,7 @@ fn private_unauthorized_uninitialized_account_can_still_be_claimed() {
     // remains allowed.
     let unauthorized_account = AccountWithMetadata::new(
         Account::default(),
-        false,
+        true,
         (&private_keys.npk(), &private_keys.vpk(), 0),
     );
 
@@ -790,7 +790,7 @@ fn private_unauthorized_uninitialized_account_can_still_be_claimed() {
     let (output, proof) = execute_and_prove(
         vec![unauthorized_account],
         Program::serialize_instruction(()).unwrap(),
-        vec![InputAccountIdentity::PrivateUnauthorized {
+        vec![InputAccountIdentity::PrivateForeignInit {
             vpk: private_keys.vpk(),
             random_seed: [0; 32],
             npk: private_keys.npk(),
diff --git a/lee/state_machine/src/state/tests/mod.rs b/lee/state_machine/src/state/tests/mod.rs
index d6acaa2e..399d268f 100644
--- a/lee/state_machine/src/state/tests/mod.rs
+++ b/lee/state_machine/src/state/tests/mod.rs
@@ -270,7 +270,7 @@ fn shielded_balance_transfer_for_tests(
 
     let recipient = AccountWithMetadata::new(
         Account::default(),
-        false,
+        true,
         (&recipient_keys.npk(), &recipient_keys.vpk(), 0),
     );
 
@@ -279,7 +279,7 @@ fn shielded_balance_transfer_for_tests(
         Program::serialize_instruction(balance_to_move).unwrap(),
         vec![
             InputAccountIdentity::Public,
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk: recipient_keys.vpk(),
                 random_seed: [0; 32],
                 npk: recipient_keys.npk(),
@@ -320,7 +320,7 @@ fn private_balance_transfer_for_tests(
     );
     let recipient_pre = AccountWithMetadata::new(
         Account::default(),
-        false,
+        true,
         (&recipient_keys.npk(), &recipient_keys.vpk(), 0),
     );
 
@@ -338,7 +338,7 @@ fn private_balance_transfer_for_tests(
                     .expect("sender's commitment must be in state"),
                 identifier: 0,
             },
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk: recipient_keys.vpk(),
                 random_seed: [0; 32],
                 npk: recipient_keys.npk(),
diff --git a/lee/state_machine/src/state/tests/validity_window.rs b/lee/state_machine/src/state/tests/validity_window.rs
index 12e7c229..7e314bc2 100644
--- a/lee/state_machine/src/state/tests/validity_window.rs
+++ b/lee/state_machine/src/state/tests/validity_window.rs
@@ -126,7 +126,7 @@ fn validity_window_works_in_privacy_preserving_transactions(
     let account_keys = test_private_account_keys_1();
     let pre = AccountWithMetadata::new(
         Account::default(),
-        false,
+        true,
         (&account_keys.npk(), &account_keys.vpk(), 0),
     );
     let mut state = V03State::new().with_test_programs();
@@ -138,7 +138,7 @@ fn validity_window_works_in_privacy_preserving_transactions(
         let (output, proof) = crate::privacy_preserving_transaction::circuit::execute_and_prove(
             vec![pre],
             Program::serialize_instruction(instruction).unwrap(),
-            vec![InputAccountIdentity::PrivateUnauthorized {
+            vec![InputAccountIdentity::PrivateForeignInit {
                 vpk: account_keys.vpk(),
                 random_seed: [0; 32],
                 npk: account_keys.npk(),
@@ -191,7 +191,7 @@ fn timestamp_validity_window_works_in_privacy_preserving_transactions(
     let account_keys = test_private_account_keys_1();
     let pre = AccountWithMetadata::new(
         Account::default(),
-        false,
+        true,
         (&account_keys.npk(), &account_keys.vpk(), 0),
     );
     let mut state = V03State::new().with_test_programs();
@@ -203,7 +203,7 @@ fn timestamp_validity_window_works_in_privacy_preserving_transactions(
         let (output, proof) = crate::privacy_preserving_transaction::circuit::execute_and_prove(
             vec![pre],
             Program::serialize_instruction(instruction).unwrap(),
-            vec![InputAccountIdentity::PrivateUnauthorized {
+            vec![InputAccountIdentity::PrivateForeignInit {
                 vpk: account_keys.vpk(),
                 random_seed: [0; 32],
                 npk: account_keys.npk(),
diff --git a/lez/wallet/src/account_manager.rs b/lez/wallet/src/account_manager.rs
index 37f8761d..e1127181 100644
--- a/lez/wallet/src/account_manager.rs
+++ b/lez/wallet/src/account_manager.rs
@@ -256,7 +256,7 @@ impl AccountManager {
                     identifier,
                 } => {
                     let acc = lee_core::account::Account::default();
-                    let auth_acc = AccountWithMetadata::new(acc, false, (&npk, &vpk, identifier));
+                    let auth_acc = AccountWithMetadata::new(acc, true, (&npk, &vpk, identifier));
                     let mut random_seed: [u8; 32] = [0; 32];
                     OsRng.fill_bytes(&mut random_seed);
                     let pre = AccountPreparedData {
@@ -437,7 +437,7 @@ impl AccountManager {
                         identifier: pre.identifier,
                         commitment_root: self.dummy_commitment_root,
                     },
-                    (None, _) => InputAccountIdentity::PrivateUnauthorized {
+                    (None, _) => InputAccountIdentity::PrivateForeignInit {
                         vpk: pre.vpk.clone(),
                         random_seed: pre.random_seed,
                         npk: pre.npk,
diff --git a/test_fixtures/fixtures/prebuilt_sequencer_db.dump b/test_fixtures/fixtures/prebuilt_sequencer_db.dump
index f8d051fd..5ff7bfd9 100644
Binary files a/test_fixtures/fixtures/prebuilt_sequencer_db.dump and b/test_fixtures/fixtures/prebuilt_sequencer_db.dump differ