Ethereum’s New Privacy Pools Go Live—Vitalik Jumps In First

Ethereum has introduced a new privacy-focused tool, Privacy Pools, which allows users to conduct private transactions while ensuring compliance with regulations. The tool, developed by 0xbow.io, launched on March 31, with Ethereum co-founder Vitalik Buterin among the first to deposit on the platform.

Privacy Pools aim to provide enhanced privacy for Ethereum users while preventing illicit activities. Users using this system can demonstrate to others that their funds are entirely isolated from any dubious sources without impairing their privacy. This is achieved through a feature called “Association Sets,” which groups transactions while screening for links to illicit actors such as hackers and scammers.

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

Transactions placed into the pool retain dynamic status so they may be removed when they link to activities classified as illegal. The new privacy solution introduces different methods compared to Tornado Cash because authorities criticized its money laundering capabilities.

Vitalik Buterin Supports the Launch with a Deposit

Buterin has publicly backed Privacy Pools and was one of the first users to make a deposit, transferring 1 Ether (ETH) to the platform. Over 21 ETH from 69 deposits have been made so far, according to 0xbow.io.

The project has received support from multiple investors, including BanklessVC, Public Works, and Number Group. 0xbow.io stated that the tool is part of a broader effort to “make privacy normal again” while ensuring regulatory compliance.

We’d also like to mention our investors for their trust and support @numbergroupxyz, @vitalik, @banklessvc, @publicworksfm, and several angels

— 0xbow.io (@0xbowio) March 31, 2025

Privacy and Compliance Features Set Privacy Pools Apart

One of the key features of Privacy Pools is its ability to separate legitimate transactions from illicit ones. The protocol allows users to withdraw funds while maintaining privacy without being associated with flagged addresses. If a deposit is disqualified, users have the option to use a “ragequit” function, which returns the funds to their original address.

Privacy Pools are built on zero-knowledge proofs and an “Association Set Provider” (ASP) that helps verify transactions. This ensures that only “clean” funds enter the pool while maintaining privacy for users. The system is currently available on Ethereum and Layer 2 networks like Gnosis.

Built on Research and Audited for Security

Privacy Pools is based on research from a 2023 white paper co-authored by Buterin, Chainalysis Chief Scientist Jacob Illum, and researchers from the University of Basel. The paper explored methods to improve blockchain privacy while ensuring regulatory compliance.

The code for Privacy Pools underwent an audit by security firm Audit Wizard, which was co-founded by a former Apple engineer. 0xbow.io emphasized that the system will continue to be tested and improved over time.

The U.S. Department of the Treasury sanctioned Tornado Cash through regulatory measures in 2022, which resulted in challenges for privacy tools. A U.S. appeals court reversed the sanctions against Tornado Cash in January 2025.

0xbow.io operates on a one Ethernet per transaction basis right now but will eliminate this restriction through additional testing. The company stated Privacy Pools deliver privacy solutions which meet legal standards while ensuring user fund security.

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