The system would not mean that criminals could not operate on the mixer, only that they could not access its entire liquidity.
Soleimani says an alternative system, in which an administrator maintains a blocklist to completely exclude bad actors from the platform, would be prohibitively expensive because adding addresses to a list hosted by the blockchain comes at a cost every time and criminals frequently jump between wallets. It would also raise ethical questions about whether a person should decide who is allowed to use the service.
“I don’t think I should be in charge of deciding who the good and bad people are for everyone – and no one else should do it either,” Soleimani says. “This system is different because it allows individuals to choose who they associate with or not.”
Soleimani says Privacy Pools’ customers are likely to be people who want to transact privately, such as those who want to donate to political causes anonymously or hide the amount of their salary denominated in cryptocurrency.
Even before the technical details were released, the project began receiving messages of support from the cypherpunk community, which advocates the use of cryptography to protect privacy.
“Cypherpunks like privacy, institutions like privacy, casual investors like privacy,” says Thurman. “He will be warmly welcomed.”
“I’m sure it will be good whatever he releases,” says Greg Di Prisco, former head of business development at MakerDAO, another leading Ethereum-based DAO. “I don’t think the average user understands how bad the world will be without transaction privacy.”
As for whether U.S. regulators are likely to be receptive to the idea, Soleimani says he’s “not confident at all” — a sentiment shared in crypto circles.
The debate around crypto mixers highlights the “philosophical divide” between evangelists and regulators, according to crypto analyst Noelle Acheson, on whether financial privacy is a right. She predicts that U.S. regulators will likely treat any type of blender with suspicion because of the possibilities of misappropriation, even if only a small percentage of users are bad actors.
But the emergence of a successor to Tornado Cash, Acheson says, highlights the difficulty regulators face in preventing similar tools from coming to market, which risks becoming a never-ending game of whack-a-mole.
Despite the headwinds, Soleimani says he hopes the project will represent a rare convergence of interests of regulators and crypto evangelists and act as a sort of “peace offering.” (OFAC did not respond to a request for comment.)
“My goal is to have a privacy tool that I can use as a US citizen. That’s always been my goal – that was the goal when we started Tornado Cash in the first place,” he says. “My friends and I think privacy is normal. One day you will too.
