Ethereum Introduces Privacy Pools—Vitalik Buterin Deposits First ETH

• Privacy Pools launched on Ethereum to help users protect transaction privacy while staying compliant with regulations.
• The tool uses zero-knowledge proofs and vetted fund lists to block suspicious activity without revealing personal data.

A new Ethereum-based privacy solution called Privacy Pools has officially launched on the mainnet. Developed by cryptographers, including the co-founders of Ethereum Ameen Soleimani and Zak Cole, the tool is aimed at making crypto transactions more private but, more importantly, legal.

Built by infrastructure developer 0xbow, Privacy Pools relies on such measures as zero-knowledge proof and the Association Set Provider to prevent illicit funds from the system. The platform allows users to mask their transactions involving ERC-20 tokens on Ethereum and layer-2 solutions like Gnosis and the Ethereum network without revealing their financial activity.

gm Ethereum

It is our great honor to announce the mainnet launch of Privacy Pools!

ETH users can now achieve on-chain privacy, while still dissociating from illicit funds

It is now up to all of us to Make Privacy Normal Again

More info in this thread pic.twitter.com/3nJO0AxoD1

— 0xbow.io (@0xbowio) March 31, 2025

Unlike some of the previous mixers like Tornado Cash, the Privacy Pools have an extra layer of compliance. ASPs can have lists of suspicious or sanctioned addresses to enable users to link their deposits to unlawful activity while keeping their identities a secret.

Vitalik Buterin Backs 0xbow’s Vision

Beyond providing the initial funding, Vitalik Buterin, one of the co-founders of Ethereum, offered solid theoretical underpinnings to the creation of the company. In 2023, Buterin wrote a piece with Chainalysis chief scientist Jacob Illum and researchers Matthias Nadler and Fabian Schär from the University of Basel. The paper provided the basis for Privacy Pools, and the document has been downloaded over 12000 times and has been used in nine other articles.

Several notable investors, including Number Group, BanklessVC, Public Work, and individual angel investors, support 0xbow. The Privacy Pool smart contract also received an audit from Audit Wizard, a blockchain auditing company owned by a former Apple developer.

According to 0xbow, 69 transactions have been made to contribute above 21 ETH into the pool. Buterin made one of the investments himself.

“This is only the beginning.The road to making privacy normal again is long and exciting, and we can’t do it alone!” 0xbow.

Privacy Without Compromise Gains Momentum

Soleimani explained the proposed idea of restoring privacy while not concealing unlawful activities. He attributed this to Tornado Cash and further stated that Privacy Pools are better than previous solutions because they offer the option to opt out of the respective dealings.

Recent figures support the growing need for compliant privacy tools. Chainalysis reported $41 billion in illicit crypto transfers in 2024, comprising 0.14% of total on-chain activity. As investigations continue, that number may rise to $51 billion.

Other projects have already used similar concepts to mitigate bad actors, for example, in February, Railgun helped avoid the zKLend scammers from laundering the stolen funds. Privacy Pools aims to advance that vision further with an additional sound layer of accountability integrated into the model.

While ETH itself is grappling with its price volatility, its Layer 2 networks are still in use. Base is a scaling solution operating on Ethereum that handles a throughput of approximately 6.9 million daily transactions. This high throughput and cost efficiency imply a good foundation for decentralised applications. As of press time, ETH is trading at about $1,882.86, up 5% over the last 24 hours.