On April 1, 2025, the Privacy Pools launch happened. It is a new semi-permissionless tool introduced on the Ethereum blockchain. It lets users make private transactions while proving their money isn’t connected to illegal activities. Vitalik Buterin, Ethereum’s co-founder, supported the privacy pools launch and created one of the first deposits.

It is a smart protocol based on contracts. It was created by the Ethereum developers 0xbow.io. It enables users to do transactions privately while still verifying that the amount is not related to illicit activities. This feature uses “Association Sets” to collect multiple transactions in an anonymous pool. To comply with the regulatory norms, the system performs a screening test that flags doubtful addresses.

Vitalik Buterin’s Backing and First Deposit

Vitalik Buterin , co-founder of Ethereum, has been a major supporter of the Privacy Pools launch. He participated in creating the white paper of the project in September 2023 and co-authored it with Chainalysis Chief Scientist Jacob Illum and 0xbow.io’s strategic adviser Ameen Soleimani, which laid out the foundation of the project.

Vitalik not only backed the idea of privacy pools launch but also made the first 69 deposits, transferring 1 Ether (ETH). According to 0xbow.io, users have deposited about 21 ETH in advance, which demonstrates early adoption.

Source: X

Security and Compliance Measures

To ensure whole system is safe and reliable, its code was thoroughly checked by Audit Wizard , a company that specializes in reviewing smart contracts. The company was co-founded by Joe van Loon , a former engineer at Apple. The audit confirmed that the protocol works as promised and is secure.

0xbow.io has also attracted backing, from well-known investors, such as Number Group , BanklessVC , Public Works , and several others.

Inspired by Tornado Cash but More Compliant

Privacy Pools takes inspiration from Tornado Cash , a tool that lets users make anonymous transactions on the blockchain. However, Tornado Cash was banned by the U.S. Treasury in 2022 because it was used to launder $7 billion by a group tied to North Korea. In January 2025 , a U.S. court decided the ban was unfair, and Tornado Cash was removed from the blacklist.

Unlike Tornado Cash , it focuses on keeping transactions private but also making sure users can prove their funds are not linked to illegal activities. This way, privacy pool launch tries to balance the secuirty of private information with lawful behavior .

The Growing Need for Privacy Pools

The Privacy Pools launch took place when crypto crime was a matter of concern for all traders. As per the Crypto Crime Report by Chainalysis 2025, $41 billion in illicit transactions were made in 2024. The report stated the amount could rise up to $51 billion as more suspicious addresses are found.

Looking Ahead

Privacy Pools launch showcases a major step towards focusing on security in Crypto while complying with the regulatory norms. It is backed by Vitalik Buterin with efficient security audits and early acceptance. It has the potential for reframing the security protocols on public blockchains. It will assist in maintaining private as well as complaint transfers, performing as needed for the future.