A new privacy tool named Privacy Pools has launched on the Ethereum blockchain, aimed at enabling users to conduct transactions anonymously while demonstrating that their funds are not associated with illicit activities.

Developed by the team at 0xbow.io, the platform allows semi-permissionless access, with initial deposits capped at one Ether.

Ethereum co-founder Vitalik Buterin was among the first to engage with the platform, reportedly making a deposit shortly after its launch on March 31. The initiative employs a feature known as “Association Sets,” which aggregates transactions into anonymous pools. This mechanism includes screening processes to filter out transactions linked to illegal actors, such as hackers and scammers.

0xbow.io stated that these Association Sets are dynamic, allowing the removal of deposits identified as illicit without affecting other contributions. Users whose deposits are disqualified can utilize a “ragequit” function to retrieve their funds.

Despite the potential for enhanced privacy, the tool enters a landscape marked by increasing scrutiny from regulators. Privacy protocols have been under fire in recent years due to their exploitation by criminals for money laundering.

For instance, Tornado Cash was sanctioned by the U.S. Treasury in 2022 after being linked to approximately $7 billion in laundering activities.

The launch of Privacy Pools comes at a time when illicit crypto transfers reached over $41 billion in 2024, according to Chainalysis, representing 0.14% of the total on-chain volume for that year. Although this figure indicates an 11% decline from 2023, Chainalysis has projected that the total could rise to $51 billion as more criminal addresses are identified.

With over 21 ETH already deposited into Privacy Pools from 69 transactions, the platform has garnered interest from various investors, including Number Group and BanklessVC.

It also received backing from a white paper co-authored by Buterin and academics from the University of Basel, which has seen significant engagement in the research community.

This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators.
This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice.
The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.