As international regulations change, individuals are increasingly interested in preserving their privacy. One of the co-founders of Ethereum, Vitalik Buterin, and others released a research paper. The authors explored the intersection of blockchain technology and financial regulations through the lens of privacy pool systems.
The paper introduces a fresh perspective by leveraging zero-knowledge proofs to tackle privacy challenges while simultaneously upholding regulatory standards.
Buterin and his co-authors Jacob Illum, Matthias Nadler, Fabian Schar, and Ameen Soleimani seek to find a “middle ground” reconciling the need for privacy with regulatory compliance demands.
Research Raises Concern About Tornado Cash
The document starts by analyzing the well-known tool for enhancing privacy in cryptocurrency transactions, the Tornado Cash protocol. This protocol enables users to carry out crypto transactions without disclosing their identities.
However, recent legal actions, including criminal charges and sanctions imposed by the US Office of Foreign Assets Control (OFAC) against Tornado Cash’s founders, brought a significant drawback to light.
The main drawback is law-abiding users’ challenges in disassociating themselves from the unlawful activities the protocol inadvertently attracted, the research noted. “There is no way for genuine users to distance themselves from the criminal elements drawn to the protocol.”
Ethereum Founder Suggests An Applicable Solution To Privacy Protocols
Buterin’s proposal offers a solution by introducing the concept of “association sets” within p
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Author: Kent Glory
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