Buterin supports new privacy tool on Ethereum

What’s new? The Ethereum protocol 0xbow team has launched the Privacy Pools tool, which allows for confidential transactions while also proving the purity of assets. When processed, the tool groups transactions and performs checks to ensure assets are not linked to hackers and scammers.

Source: X.com

What else is known? Privacy Pools has received the backing of Ethereum co-founder Vitalik Buterin, who was also one of the first to deposit funds into the new platform. In addition to Buterin, Number Group, BanklessVC, and Public Works provided investment support for the project.

The transaction batches in Privacy Pools, called Association Sets, are modifiable. This means that if a transaction is accepted but later found to be illegal, it can be removed from the batch without affecting the rest of the deposits. When a transaction is removed from a batch, the user can call the ragequit function to return the funds to the original address.

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Some of the Privacy Pools features are available in free mode. Initially, the one-time deposit limit will be 1 ETH, but it will be raised after a series of stress tests.

The Privacy Pools code has been successfully tested by Audit Wizard, a smart contract auditing firm co-founded by former Apple engineer Joe van Loon.

The project’s creators built on a concept presented in September 2023 by Buterin, leading blockchain analytics platform Chainalysis’s Jacob Illum and two academics at the University of Basel in Switzerland. 0xbow strategic advisor Ameen Soleimani also contributed to this work.

0xbow notes that they intend to normalize confidential transfers once again. Their tool helps provide ETH on-chain users with anonymity and steer them away from illicit funds.

Privacy protocols have attracted the attention of regulators due to their growing popularity as a money laundering tool. One such privacy tool, crypto mixer Tornado Cash, was on the US sanctions list from August 2022 to March 2025 due to facilitating billions of dollars worth of transactions for the DPRK-based hacker group Lazarus.

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According to a Chainalysis report, illicit crypto transfers amounted to $41 billion or 0,14% of total blockchain transactions in 2024. Analysts said the figure could grow to ~$51 billion as new crime-related addresses are discovered.