#Vitalik_Buterin has joined a team of authors working on research regarding Privacy Pools, a new privacy protocol that could provide an alternative to Tornado Cash. This project also involves Amin Sulaimani, a developer; Jacob Illum, a researcher from Chainalysis; as well as Matthias Nadler and Fabian Shar, scientists.

The primary goal of Privacy Pools is to create a mechanism that achieves a "balancing act," filtering funds associated with illicit activities while finding a balance between privacy and regulatory compliance. This is accomplished using Zero-Knowledge Proofs (ZKPs).

The core idea of the proposal is the ability to publish #ZKPs that confirm the legitimacy of funds without revealing the entire transaction graph. The authors argue that privacy and regulatory compliance can coexist.

Researchers acknowledged #TornadoCash as a valuable tool for ensuring privacy but noted its vulnerability to abuse by illegal entities. In August 2022, the U.S. Office of Foreign Assets Control #OFAC included the Tornado Cash website on its sanctions list, claiming that it had laundered over $7 billion in cryptocurrency, including more than $455 million associated with the Lazarus Group, a North Korean hacker group.

On August 12, developer Alexey Pertsev, associated with Tornado Cash, was arrested in the Netherlands on suspicion of involvement in money laundering and concealing illicit financial flows, although he denied all accusations. In April 2023, a court changed Pertsev's pretrial detention to house arrest.

This is not the first time Vitalik Buterin has expressed interest in privacy matters within the cryptocurrency world. Earlier this year, he called privacy the "single biggest remaining problem" for #Ethereum and proposed his solution.$ETH