Railgun Denies Money Laundering Claims as Total Volume Approaches $1 Billion
Summary:
Crypto privacy protocol Railgun challenged allegations that it assisted in money laundering with North Korea and other U.S. sanctioned entities, attributing its zero-knowledge tech as a shield against such activities. Despite these claims, Railgun's total volume nears $1 billion, largely supported by Ethereum co-founder Vitalik Buterin's commendation of the privacy protocol. However, the FBI reported that North Korean hackers used Railgun to launder over $60m worth of Ether (ETH) stolen in the 2022 Harmony Bridge heist. Railgun has since defended itself, saying the Lazarus group was prevented from using its system a year ago. The company's native token, Railgun (RAIL), also saw an 86.3% increase over the past week.
Crypto privacy protocol Railgun has addressed allegations of aiding North Korea and other entities faced with U.S. sanctions in crypto money laundering, asserting that its privacy tech based on zero-knowledge makes this impossible and the claims are devoid of substantial proof. The total volume of transactions on the Railgun platform has approached $1 billion, with Ethereum co-founder Vitalik Buterin recently commending and defending the privacy protocol in a blog post. Launched in January 2021, Railgun utilizes zero-knowledge (ZK) cryptography to cloak wallet balances, transaction histories, and transaction details, enabling its users to operate decentralized applications (DApps) on Ethereum or other supported chains while preserving their privacy. The potential of Railgun as an alternative to Tornado Cash was once highlighted by blockchain security firm Elliptic after the U.S. government imposed sanctions on the crypto mixer.
In January 2023, the FBI alleged that North Korean hackers had exploited Railgun to launder over $60 million worth of Ether (ETH) stolen in the 2022 Harmony Bridge heist. In a blog post responding to crypto reporter Colin Wu, Railgun dismissed the idea that the Lazarus group had leveraged its privacy protocol, branding it as inaccurate journalism. According to Railgun, the group is barred from utilizing their system via the "Private Proofs of Innocence" mechanism, which was activated over a year prior. Furthermore, the accusation was baseless to begin with.
Introduced by Railgun's research team and contributors in January 2023, Private POI is a feature that uses cryptographic assurance to guarantee that funds transferred into the Railgun smart contract do not originate from a notorious list of transactions or individuals. It compels users to produce a ZK-proof confirming that their funds do not belong to a specific list of transactions and wallets. Buterin has since defended Railgun, asserting that "privacy is natural" and the protocol's privacy pools make it considerably more challenging for harmful parties to take part.
According to data from Dune Analytics, Railgun's total transaction volume has reached $962.8 million, and its total locked value on Ethereum - where most of the protocol's activity takes place - has exceeded $25 million. On April 15, its native token, Railgun (RAIL), surged following revelations that Buterin had transferred 100 ETH worth $325,000 to Railgun earlier that day. The token is currently valued at $1.18 and has seen an 86.3% increase over the past week.
Published At
4/17/2024 4:07:49 AM
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