News

According to a report by Jinse Finance, the venture capital firm Andreessen Horowitz (a16z)'s crypto-focused investment division has pointed out that modern cryptographic technologies such as zero-knowledge proofs can both protect user privacy and enable law enforcement to effectively combat illicit actors. In a report released on Tuesday, a16z Crypto’s policy partner Aiden Slaven and regulatory legal advisor David Sverdlov stated that zero-knowledge proofs can verify the authenticity of data without disclosing any detailed private information. They believe this technology has “the greatest potential” by demonstrating the source of funds without the need to reveal private information. The report was published just two weeks after Roman Storm, co-founder of the crypto mixing service Tornado Cash, was found guilty. Tornado Cash allows users to obscure the origin and destination of cryptocurrencies, and Roman Storm was convicted of conspiracy to operate an unlicensed money transmitting business, among other charges. In the Tornado Cash case, law enforcement and prosecutors argued that the mixing service facilitated criminal activity by providing a means to conceal illicit proceeds. Slaven and Sverdlov stated in the report: “If users are able to provide such proofs when converting cryptocurrency into fiat currency, cash-out points can have reasonable assurance that the cryptocurrency does not originate from criminal proceeds, while users can also retain the privacy of their on-chain transactions.”