Ameen Soleimani, the early developer of Tornado Cash, created a similar version of this transaction masking application after it was banned by the US.
The new version called “Privacy Pools” is a fork from Tornado Cash, enhanced with a number of improvements. Privacy Pools adds a feature that allows users to prove they are “not from North Korea” and that their wallet address is not on the government’s “blacklist”.
Privacy Pools is committed to maintaining privacy by not revealing who the users are thanks to zero-knowledge proof technology.
Privacy Pools are created to continue the unfinished parts of Tornado Cash, but in a transparent way and avoid the “observation” of the authorities. The application is currently in beta and has not been audited.
“The hope is that regulators are less interested in penalizing Privacy Pools, because it has addressed their concerns.” – developer Ameen Soleimani shared.
In August 2022, The US Treasury Department has sanctioned Tornado Cash because it believes that the platform has “abetted” the notorious North Korean criminal group – Lazarus Group – to launder a large amount of dirty money. Great hacks in history like Axie Affinity, lost more than 600 million USDare also hackers through Tornado Cash to trace the money, hindering the investigation process.
The Tornado Cash development team was later targeted by the authorities. Also in August, Dutch authorities arrested developer Alexey Pertsev together prison term until April 2023.
Tornado Cash is a “money mixer” that obfuscates the origin and almost wipes the transaction trace on the blockchain, to increase privacy and make investigations difficult. It is because it is an open source and completely decentralized project that has made Tornado Cash a “thorn” in the eyes of governments and law enforcement agencies.