SpankChain’s Hint at Tornado Cash Return

Ameen Soleimani, the co-founder of SpankChain and Reflex Labs, tweeted an image that teases the reincarnation of the controversial crypto mixing service.

Tornado over the sea with an island

The legal woes of Tornado Cash developer, Alexei Pertsev, do not seem to deter cypherpunks and privacy advocates from trying to revive the sanctioned crypto mixer. And a recent tweet by Ameen Soleimani suggests that Tornado Cash might soon make a comeback.

“I sincerely hope no one thought we were finished,” Soleimani said.

The image in his tweet indicates that the forthcoming solution called “Privacy Pools v0” will be a “sequel to Tornado.Cash” and is developed by Soleimani himself, on behalf of MolochDAO.

For context, MolochDAO, launched by Soleimani in February 2019, is a decentralized autonomous organization (DAO) tasked with funding and supporting the development of public goods on Ethereum. As of July 2022, Moloch DAO has distributed almost $700,000 in grants to many projects, including Lighthouse, Ethereum Cat Herders, DApp Node, and Tornado Cash.

The DAO got its name from “Meditations on Moloch,” an essay by web philosopher and LessWrong contributor Scott Alexander, where he explores why people tend to sacrifice the good of society in favor of short-term individual gains. After a prolonged period of inactivity, MolochDAO made a comeback in October with an announcement of a 100 ETH donation to Tornado Cash and 23 ETH to Coin Center, a crypto-focused think-tank that is suing OFAC over its Tornado Cash ban.

The DAO also allocated a 35 ETH grant for shipping a demo of Privacy Pools v0.1. According to the roadmap, devs eye deployment of the solution on Optimism before the end of year 2023.

The idea behind Privacy Pools, which was first coined by Vitalik Buterin in the episode of Around the Block podcast, is that withdrawing users can optionally provide a zero-knowledge (ZK) proof that their deposits were not part of a subset of deposits associated with illicit activity.

“So as a user, if there are bad deposits that have been made from other bad addresses that I would prefer not to share an anonymity set with, I can opt to provide a ZK-proof along with my withdrawal that shows that my depositing address was not among those bad addresses. This is helpful because it allows users to share a ZK-circuit and smart contracts, without being forced to share an anonymity set,” the grant proposal reads.

The reactions from the community to Soleimani’s announcement were overwhelmingly positive, as many praised him for fighting the right battle. Some also expressed worries about Soleimani’s safety, which seems a reasonable concern given that developing privacy solutions is considered by many governments the “gray” area of the law, despite the ongoing efforts of NGOs and privacy advocates to present code as free speech.

“Finished? Just getting started. It's the vicious circle between privacy and surveillance. The feedback loop,” one user cheered in the replies.

“Not the hero we deserved, but the hero we needed,” another user praised Soleimani’s efforts.

In August, Tornado Cash developer Alexey Pertsev, a Russian national residing in the Netherlands, was arrested by the Dutch police on money laundering charges just days after the U.S. Treasury sanctioned the service. The prosecutor’s office claimed that the crypto mixer has laundered over $7 billion worth of crypto since its inception in 2019, including funds stolen by the North Korean hacker group Lazarus.

Earlier this month, a Dutch court ruled that Pertsev will remain detained until his next hearing scheduled for April 21. A pre-trial review will take place on May 24, The Block reported.