A proposal known as Privacy Pools, which introduces a regulatory-friendly mixing protocol for Ethereum and was co-authored by Ethereum’s founder, Vitalik Buterin, has garnered support from key figures within the cryptocurrency industry. Notable endorsements include the founders of Coinbase, MetaMask, and Messari, The Block reported.
Privacy Pools aims to provide users with a method to prove the legitimacy of their funds without the necessity of disclosing the complete transaction history associated with those funds. This protocol serves as an alternative to Tornado Cash, a mixing protocol whose creators faced legal issues related to money laundering and sanctions violations.
Fred Ehrsam, co-founder of Coinbase and Paradigm, expressed optimism about Privacy Pools, stating, “Privacy Pools has the potential to be the most important tool we have to address regulatory challenges while maintaining privacy on public blockchains.” Brian Armstrong, the CEO and co-founder of Coinbase, shared Ehrsam’s sentiments by reposting the message.
Dan Finlay, co-founder of MetaMask, went a step further by offering assistance to the authors of the proposal in obtaining grant funding from the MetaMask Grants DAO. He noted that this initiative could lead to swift implementation of Privacy Pools, making it accessible to a wide range of wallet users.
The co-founders of Messari also weighed in on the matter. Ryan Selkis described it as the “News of the Year” and suggested that the researchers might have found a solution to the ongoing tension between transaction privacy and regulatory surveillance in the crypto space.
However, Dan McArdle, Messari’s other co-founder, maintained a more cautious stance. He emphasized the long-term goal of achieving a fully private monetary system without an easy way to trace transaction history. While acknowledging Privacy Pools as a near-term solution, McArdle underscored the importance of preserving the ideal long-term vision.
Haseeb Qureshi, managing partner at Dragonfly Capital, expressed reservations about Privacy Pools potentially encountering the same legal challenges as Tornado Cash. He pointed out that Tornado Cash had also integrated compliance tools into its protocol, raising questions about the effectiveness of such measures in avoiding legal issues.