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index dfc27e67..cabee9ae 100644
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index b76eaadd..075675d0 100644
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diff --git a/artifacts/lez/programs/vault.bin b/artifacts/lez/programs/vault.bin
index ae08f453..dc8ad9db 100644
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diff --git a/artifacts/lez/programs/wrapped_token.bin b/artifacts/lez/programs/wrapped_token.bin
index dc9e3454..7473b7b2 100644
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diff --git a/integration_tests/tests/auth_transfer/private.rs b/integration_tests/tests/auth_transfer/private.rs
index ddea3ab8..b0b9bf7d 100644
--- a/integration_tests/tests/auth_transfer/private.rs
+++ b/integration_tests/tests/auth_transfer/private.rs
@@ -628,7 +628,7 @@ 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],
@@ -637,7 +637,7 @@ 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 71fb132b..78a28558 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),
     );
 
@@ -298,7 +298,7 @@ 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 c9543e05..8fae795f 100644
--- a/lee/privacy_preserving_circuit/src/output.rs
+++ b/lee/privacy_preserving_circuit/src/output.rs
@@ -117,7 +117,7 @@ pub fn compute_circuit_output(
                     new_nonce,
                 );
             }
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk,
                 random_seed,
                 npk,
@@ -133,8 +133,8 @@ 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 d441ff19..1cac1df6 100644
--- a/lee/state_machine/core/src/circuit_io.rs
+++ b/lee/state_machine/core/src/circuit_io.rs
@@ -48,7 +48,7 @@ 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,
@@ -125,7 +125,7 @@ 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 005a9230..34f3cede 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);
@@ -204,7 +204,7 @@ 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(),
@@ -247,7 +247,7 @@ 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),
     );
 
@@ -271,7 +271,7 @@ 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(),
@@ -422,7 +422,7 @@ 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() {
@@ -443,9 +443,9 @@ 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();
@@ -455,7 +455,7 @@ 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,
@@ -507,10 +507,10 @@ 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;
@@ -521,12 +521,12 @@ 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(),
diff --git a/lee/state_machine/src/state/tests/circuit.rs b/lee/state_machine/src/state/tests/circuit.rs
index c13a7370..160b033c 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),
     );
 
@@ -68,7 +68,7 @@ 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(),
@@ -102,7 +102,7 @@ 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),
     );
 
@@ -117,7 +117,7 @@ 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(),
@@ -151,7 +151,7 @@ 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),
     );
 
@@ -166,7 +166,7 @@ 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(),
@@ -200,7 +200,7 @@ 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),
     );
 
@@ -215,7 +215,7 @@ 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(),
@@ -249,7 +249,7 @@ fn circuit_should_fail_if_new_private_account_with_non_default_nonce_is_provided
             nonce: Nonce(0xdead_beef),
             ..Account::default()
         },
-        false,
+        true,
         (&recipient_keys.npk(), &recipient_keys.vpk(), 0),
     );
 
@@ -264,7 +264,7 @@ fn circuit_should_fail_if_new_private_account_with_non_default_nonce_is_provided
                 membership_proof: (0, vec![]),
                 identifier: 0,
             },
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk: recipient_keys.vpk(),
                 random_seed: [0; 32],
                 npk: recipient_keys.npk(),
@@ -279,7 +279,7 @@ fn circuit_should_fail_if_new_private_account_with_non_default_nonce_is_provided
 }
 
 #[test]
-fn circuit_should_fail_if_new_private_account_is_provided_with_default_values_but_marked_as_authorized()
+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();
@@ -295,8 +295,8 @@ fn circuit_should_fail_if_new_private_account_is_provided_with_default_values_bu
     );
     let private_account_2 = AccountWithMetadata::new(
         Account::default(),
-        // This should be set to false in normal circumstances
-        true,
+        // This should be set to true in normal circumstances
+        false,
         (&recipient_keys.npk(), &recipient_keys.vpk(), 0),
     );
 
@@ -311,7 +311,7 @@ fn circuit_should_fail_if_new_private_account_is_provided_with_default_values_bu
                 membership_proof: (0, vec![]),
                 identifier: 0,
             },
-            InputAccountIdentity::PrivateUnauthorized {
+            InputAccountIdentity::PrivateForeignInit {
                 vpk: recipient_keys.vpk(),
                 random_seed: [0; 32],
                 npk: recipient_keys.npk(),
@@ -773,7 +773,7 @@ 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),
     );
 
@@ -782,7 +782,7 @@ 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 55a99ead..76a8db7d 100644
--- a/lee/state_machine/src/state/tests/mod.rs
+++ b/lee/state_machine/src/state/tests/mod.rs
@@ -269,7 +269,7 @@ fn shielded_balance_transfer_for_tests(
 
     let recipient = AccountWithMetadata::new(
         Account::default(),
-        false,
+        true,
         (&recipient_keys.npk(), &recipient_keys.vpk(), 0),
     );
 
@@ -278,7 +278,7 @@ 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(),
@@ -319,7 +319,7 @@ fn private_balance_transfer_for_tests(
     );
     let recipient_pre = AccountWithMetadata::new(
         Account::default(),
-        false,
+        true,
         (&recipient_keys.npk(), &recipient_keys.vpk(), 0),
     );
 
@@ -336,7 +336,7 @@ 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 824a994d..0c3f4c49 100644
--- a/lez/wallet/src/account_manager.rs
+++ b/lez/wallet/src/account_manager.rs
@@ -263,7 +263,7 @@ 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 {
@@ -442,7 +442,7 @@ 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 2aa0c51f..08cc4d29 100644
Binary files a/test_fixtures/fixtures/prebuilt_sequencer_db.dump and b/test_fixtures/fixtures/prebuilt_sequencer_db.dump differ