Under Soleimani's system, individual users would be responsible for marking off which other depositors they do not wish to be associated with. In practice, imagine this means using blacklists compiled by companies like Nansen, which monitor public blocks for crime.
In theory, such a design would also limit the amount of money associated with criminal activity that flows through the mixer, he says, "because anyone using it will be able to isolate [criminal addresses]" and reduce the size of the pool. where bad actors can hide.
The system does not mean that scammers cannot use the mixer, but simply that they will not be able to access all of its liquidity.
Soleimani said that an alternative system in which administrators maintain a block list to completely ban bad actors from the platform would be too expensive, because adding addresses to a blockchain-hosted list is always expensive and criminals frequently move wallets. . It will also raise ethical questions about whether an individual should make decisions about who can use the service.
"I don't think it's my job, or anyone else's, to decide who is good and who is bad for everyone," Soleimani said. "This system is different because it allows people to choose who to partner with."
Soleimani says that Privacy Pools' clients tend to be those looking to transact in private, such as those looking to donate anonymously to political causes or hide the size of their cryptocurrency salary.
Before the technical details were released, the project began to receive messages of support from the cypherpunk community, who were advocating the use of cryptography to protect personal privacy.
"Cypherpunks like privacy, institutions like privacy, casual investors like privacy," Thurman said. "It will be very well received."
“Whatever they come up with, I'm pretty sure it's going to be amazing,” said Greg Di Prisco, former head of business development at MakerDAO, another Ethereum-based DAO. "I don't think the average user understands how bad a world without operational privacy would be."
As for whether US regulators would go along with the idea, Soleimani said he is "not at all sure," a sentiment shared in cryptocurrency circles.
According to cryptocurrency analyst Noelle Acheson, the debate among cryptocurrency mixers over whether financial privacy is a right highlights the "philosophical divide" between evangelicals and regulators. He predicts that regulators in the US will be suspicious of any mixer because of the potential for fraud, even if only a small percentage of users are bad actors.
But the emergence of a successor to Tornado Cash, Acheson said, shows the challenges regulators face in preventing similar instruments from entering the market, which risks becoming an endless game of moles.
Despite the clashes, Soleimani said he hoped the project would represent a rare convergence of interests between regulators and crypto evangelists and act as a "peace proposition." (OFAC did not respond to requests for comment.)
“My goal is to have a privacy tool that you can use as a US citizen. That has always been my goal – it has been a goal when I developed Tornado Cash from the beginning,” he says. “My friends and I believe that privacy is normal. One day you will too."