Nocturne Labs Shuts Down: Ethereum-Based Privacy Protocol Winds Up Operations
Summary:
Nocturne Labs, an Ethereum-based privacy protocol supported by Ethereum's co-founder Vitalik Buterin, has announced the termination of its operations without providing reasons. The firm initially aimed to enhance privacy in the Ethereum ecosystem and successfully raised $6 million in Oct 2023. Despite the wind-down, users can still withdraw funds until the end of June. The abrupt closure has led to speculation that the firm might face regulatory pressure over privacy issues.
Nocturne Labs, an Ethereum-based privacy platform championed by cryptocurrency luminaries like Ethereum's co-founder Vitalik Buterin, has announced its termination on June 5th. The firm, responsible for creating a privacy protocol in the previous year, did not furnish reasons for wrapping up its enterprise. Nocturne Labs was contacted by Cointelegraph for an explanation but has yet to comment. Conceived with the purpose of enhancing privacy in the Ethereum ecosystem, Nocturne's funding round in October 2023 had raised $6 million. This event was spearheaded by Bain Capital Crypto and Polychain Capital, with Buterin also contributing.
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Users can still make withdrawals via Nocturne until the end of June, in spite of the company closing down its operations. The announcement included this: "Our front end stays open for withdrawals till this month's close. We will then transition the withdrawal process to self-serve using our GitHub repo that clearly guides the users on leveraging our CLI tool to extract funds."
The current total value locked in Nocturne is over $129,000, a significant dip from Jan. 22, when it was over $455,000. This was when the closing down of Nocturne V1 was publicized, according to data from DefiLlama.
Nocturne's termination was possibly hastened by crackdowns on privacy by regulators. On Jan. 22, the protocol hinted at this in an X post: "We anticipate that an increased need for privacy will resurface with more applications and utility but until then, our focus will pivot to prominent technological and user-centric issues. We plan to disclose more about our new product in the subsequent months."
Cryptocurrency initiatives aimed at privacy have been under the radar since August 2022, following the US government blacklisting the crypto mixing protocol, Tornado Cash. Alexey Pertsev, Tornado Cash's developer, was charged with money laundering on May 14, despite the protocol being noncustodial. This means Tornado Cash never takes control of or holds the funds passing through it.
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Published At
6/6/2024 3:50:20 PM
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