Privacy Pools 'Zero-Knowledge' Crypto Mixer Under Development, Former Tornado Cash Developer Says

Privacy Pools can prove transactions are not linked to illegal activities using zero knowledge-proofs.

Privacy Pools 'Zero-Knowledge' Crypto Mixer Under Development, Former Tornado Cash Developer Says

Photo Credit: Pixabay/ WorldSpectrum

The US authorities have banned crypto privacy mixer Tornado Cash

  • The US Treasury has raised many concerns around crypto privacy mixers
  • Privacy mixers are facing increasing scrutiny in the US
  • A new, legally compliant privacy mixer is currently being developed

Privacy Pools, a successor to the legally sanctioned crypto mixer Tornado Cash is currently in development. One of the developers who worked on Tornado Cash is now creating a new platform that is said to be compliant with legal norms. The developer has posted the code of the new service on GitHub. With this platform, the developer aims to provide services similar to Tornado Cash, but with a more legal-friendly approach. The code posted on GitHub is only experimental, as per the developer.

The upcoming Privacy Pools service will use zero-knowledge proofs enable its users seeking more privacy in their crypto transactions, to prove that they are not associated with terror or hacking groups, according to former Tornado Cash developer Ameen Soleimani. Privacy mixers like Tornado Cash are often misused by crypto thieves.

These mixers allow people to deposit their stolen tokens into a common pool of crypto tokens and then wire their stolen holdings into secret wallets. This process is designed break any trail of the stolen funds, that could have been traced by officers investigating a crypto scam or fraud case.

Last year, Tornado Cash caught the attention of US authorities. The privacy mixer reportedly laundered illegal funds worth $7 billion (roughly Rs. 57,911 crore).

The FBI even suspects that North Korean hackers have used Tornado Cash to escape with stolen cryptocurrencies worth $455 million (roughly Rs. 3,763 crore). Meanwhile, the US Office of Foreign Assets Control (OFAC) imposed sanctions against Tornado Cash in August last year, for illegally laundering money via crypto assets.

Alexey Pertsev, the brains behind Tornado Cash is currently serving jail time under the supervision of the Dutch police without being charged with any crime.

The percentage of funds passing through crypto mixers from the custody of cybercriminals reportedly touched $51.8 million (roughly Rs. 413 crore) in April 2022. This marked the highest volume of crypto funds so far to have been wired to destination wallets via crypto mixers.

While law enforcement agencies in the US are already tightening noose around crypto privacy mixers, blockchain security firms like Chainalysis are working on bringing out tools that can reverse-engineer and demix transactions processed via crypto mixers.

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Radhika Parashar
Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at More
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