Chainway announced a new tool which Tornado Cash users can utilise to demonstrate that their initial deposits did not come from a list of wallets that contained stolen money without disclosing their address.

The technology, called Proof of Innocence, is made for people who want to use Tornado Cash and demonstrate that their money doesn’t come from sanctioned or blocked addresses. It’s intended for reputable users who wish to protect their privacy while avoiding association with criminal activity.

What is Tornado Cash

Tornado Cash is a well-known Ethereum service that protects user privacy and enables anonymous transactions. The Office of Foreign Assets Control (OFAC) slapped restrictions on Tornado Cash-related wallets and smart contract addresses in August due to suspicions that the service was being used to launder money.

This sparked doubts about the reliability and security of the system and brought attention to the need for additional safeguards to stop bad actors from abusing it.

Recall a Dutch court determined that Alexey Pertsev, one of the developers behind Tornado Cash, posed a flight risk and ordered him to remain behind bars until February 20.

Pertsev has been held in custody since August, just days after the U.S. Treasury invoked sanction authorities to target the Tornado protocol, which it claimed was used to enable North Korean hackers and launder over a billion dollars worth of cryptocurrency.

How The Protocol Works

When withdrawing money through Tornado Cash, customers must present zero-knowledge proof (ZK-Proof) to prove that their commitment — their deposited money — is being held safely in the system and has not already been taken out.

The user can verify the presence and status of their commitment using this proof, which is based on a Merkle Tree data structure, without disclosing personal information about themselves or their transaction history. Therefore, the zero-knowledge proof guarantees the user’s cash’s secrecy and safety while allowing them to access and withdraw their commitment as needed.

By enabling users to demonstrate that their commitment is not included in a given list of commitments, the “Proof of Innocence” protocol adds another layer of security. Doing so makes it possible to ensure that the user is not a hacker or other bad actor who has received a warning or been sanctioned for engaging in prohibited behaviour.

The user supplies the commitments on the blacklist and builds a Sparse Merkle Tree of this blacklist to produce this evidence. This makes it simple and quick for the user to demonstrate that their commitment is not included in the blacklist. Then, anyone can check this proof.

Final Words

Chainway warns that users should use their Proof of Innocente at their own risk, so users must thoroughly understand the protocol function and evaluate its risk.

The protocol is open source and is available on GitHub.

~ By Jordano M. Z. ~