{"id":560395,"date":"2023-03-07T05:19:11","date_gmt":"2023-03-07T02:19:11","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/tornado-cash-dev-says-sequel-to-crypto-mixer-aims-to-be-regulator-friendly\/"},"modified":"2023-03-07T05:19:11","modified_gmt":"2023-03-07T02:19:11","slug":"tornado-cash-dev-says-sequel-to-crypto-mixer-aims-to-be-regulator-friendly","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/tornado-cash-dev-says-sequel-to-crypto-mixer-aims-to-be-regulator-friendly\/","title":{"rendered":"# Tornado Cash dev says &#8216;sequel&#8217; to crypto mixer aims to be regulator-friendly"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a26ea34819ae\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a26ea34819ae\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/tornado-cash-dev-says-sequel-to-crypto-mixer-aims-to-be-regulator-friendly\/#%E2%80%9D_Tornado_Cash_dev_says_%E2%80%98sequel_to_crypto_mixer_aims_to_be_regulator-friendly_%E2%80%9C\" >&#8221; Tornado Cash dev says &#8216;sequel&#8217; to crypto mixer aims to be regulator-friendly &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Tornado_Cash_dev_says_%E2%80%98sequel_to_crypto_mixer_aims_to_be_regulator-friendly_%E2%80%9C\"><\/span>&#8221; Tornado Cash dev says &#8216;sequel&#8217; to crypto mixer aims to be regulator-friendly &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-48054ca8>A former Tornado Cash developer claims to be building a new crypto mixing service that aims to solve a \u201ccritical flaw\u201d of the sanctioned crypto mixer \u2014 which he hopes will convince U.S. regulators to reconsider its position on privacy mixers.<\/p>\n<p>The code of a new Ethereum-based mixer, \u201cPrivacy Pools,\u201d was <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/github.com\/ameensol\/privacy-pools\">launched<\/a> on GitHub on Mar. 5 by its creator, Ameen Soleimani.<\/p>\n<p>In a 22-part <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Twitter<\/a> thread, Soleimani explained that the \u201ccritical flaw\u201d with Tornado Cash is that users cannot prove that they\u2019re not associated with North Korea\u2019s Lazarus Group or any criminal enterprise for that matter. <\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">1\/ We fixed <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/TornadoCash?ref_src=twsrc%5Etfw\">@tornadocash<\/a> <\/p>\n<p>v0 of <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/Nt4b2Tgx1D\">https:\/\/t.co\/Nt4b2Tgx1D<\/a> is live on <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/optimismFND?ref_src=twsrc%5Etfw\">@optimismFND<\/a><\/p>\n<p>test out the demo, but please note:<br \/>&#8211; this is experimental code<br \/>&#8211; it has not been audited<br \/>&#8211; the trusted setup is untrusted<\/p>\n<p>read the full story anon <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/9nAU3RrgpN\">https:\/\/t.co\/9nAU3RrgpN<\/a><\/p>\n<p>\u2014 ameen.eth (@ameensol) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/ameensol\/status\/1632083054272430080?ref_src=twsrc%5Etfw\">March 4, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>With Privacy Pools, however, Soleimani <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/github.com\/ameensol\/privacy-pools\">explained<\/a> that depositors and withdrawers could opt out of an anonymity set that contains an address associated with stolen or laundered funds.<\/p>\n<p>This feature of Privacy Pools is executed with zero-knowledge (ZK) proofs, meaning that the privacy of the user is preserved:<\/p>\n<blockquote><p>\u201cNow, users have the option to help regulators isolate illicit funds, without revealing their entire transaction history [&#8230;] With privacy pools, just because someone deposits into the same smart contract as you, it doesn&#8217;t mean they can also force you into sharing an anonymity set with them. It&#8217;s your choice.\u201d<\/p><\/blockquote>\n<p>Soleimani provided a demonstration of how Privacy Pools is used:<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">13\/ Our demo is live &#8211; <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/Nt4b2Tgx1D\">https:\/\/t.co\/Nt4b2Tgx1D<\/a> <\/p>\n<p>Now, users have the option to help regulators isolate illicit funds, without revealing their entire transaction history. <\/p>\n<p>Let&#8217;s watch a brief video of it in action: <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/t.co\/An9lWx6jfr\">pic.twitter.com\/An9lWx6jfr<\/a><\/p>\n<p>\u2014 ameen.eth (@ameensol) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/ameensol\/status\/1632089405220442116?ref_src=twsrc%5Etfw\">March 4, 2023<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>The developer hopes the solution will empower \u201cthe community to defend against hackers abusing the anonymity sets of honest users without requiring blanket regulation or sacrificing on crypto ideals.\u201d<\/p>\n<p>While Privacy Pools is already live on Optimism, Soleimani noted that the first version of the privacy protocol is still in its \u201cexperimental\u201d stage because the code isn\u2019t complete and has not been audited, but he is \u201cpretty close to having this ready.\u201d<\/p>\n<p>To see the protocol progress further, Soleimani wants on-chain forensics platforms like Chainlaysis and TRM Labs to conduct tracebacks on deposits so that users of the privacy tool don\u2019t have to manually create their own subset exclusion lists.<\/p>\n<p>In making the case for on-chain privacy protocols, Soleimani cited what he described as an \u201cexcellent\u201d report by the Federal Reserve Bank of St. Louis in Missouri which examined the trade-offs between on-chain privacy and regulation:<\/p>\n<blockquote><p>\u201cTheir report proposes to achieve effective regulation by having Tornado Cash users provide receipts to an intermediary, thus revealing their entire transaction history to the intermediary, but still being able to have privacy with respect to other public blockchain users.\u201d<\/p><\/blockquote>\n<p>The developer hopes this can help \u201cstart a conversation\u201d with U.S. regulators on how on-chain privacy can be preserved whilst restricting criminal activity through the use of ZK proofs.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>On-chain privacy is key to the wider mass adoption of crypto<\/em><\/strong><\/p>\n<p>Soleimani\u2019s attempt to create a crypto-friendly on-chain privacy solution comes after the U.S. Office of Foreign Asset Control (OFAC) sanctioned ETH and USDC addresses linked to Tornado Cash on Aug. 8 in response to several alleged thefts by North Korea\u2019s Lazarus Group, who were claimed to have routinely used the privacy mixer to preserve its anonymity.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2023-03\/30219712-a756-4c28-8ebc-300bb71d41b6.jfif\"><figcaption style=\"text-align: center;\"><em>Photograph of a #FreeAlex protest. Source: <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/ameensol\/status\/1632083075067781121\">Ameen.eth Twitter<\/a><\/em><\/figcaption><\/figure>\n<p>Shortly after the sanction on Aug. 10, Alexey Pertsev, the creator of Tornado Cash was arrested by authorities in the Netherlands and is currently facing a <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">series<\/a> of money laundering charges. He remains behind bars and his next hearing will take place in late April.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"law_decoded\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. 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