Ethereum has welcomed a groundbreaking privacy solution with the launch of Privacy Pools by 0xbow.io on March 31. This semi-permissionless tool allows users to transact privately while proving that their funds are not linked to illicit activities, striking a balance between financial privacy and regulatory compliance.
gm Ethereum ☀️
— 0xbow.io (@0xbowio) March 31, 2025
It is our great honor to announce the mainnet launch of Privacy Pools!
ETH users can now achieve on-chain privacy, while still dissociating from illicit funds
It is now up to all of us to Make Privacy Normal Again 🫡
More info in this thread 👇 pic.twitter.com/3nJO0AxoD1
Backed by Ethereum co-founder Vitalik Buterin, who made one of the first deposits, Privacy Pools leverages “Association Sets” to group transactions while conducting a screening test to filter out illicit actors. Unlike traditional privacy mixers, this tool offers dynamic filtering—transactions found to be connected to illicit activities can be removed without affecting others. Users whose deposits are flagged can opt for the “ragequit” function to recover their funds.
Balancing Privacy and Regulation
The launch of Privacy Pools comes at a crucial time as regulators scrutinize privacy protocols. The controversy surrounding Tornado Cash, sanctioned by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) between 2022 and 2025 due to its alleged facilitation of $7 billion in illicit transactions, highlighted the risks associated with unregulated privacy solutions. Although Tornado Cash’s sanctions were overturned in January 2025, its legal battle underscored the need for compliant privacy tools.
0xbow.io’s vision to “Make Privacy Normal Again” while maintaining regulatory transparency has garnered support from notable investors, including Number Group, BanklessVC, and Public Works. The project’s credibility is further bolstered by an audit from Audit Wizard, a firm co-founded by ex-Apple engineer Joe van Loon.
We’d also like to mention our investors for their trust and support @numbergroupxyz, @vitalik, @banklessvc, @publicworksfm, and several angels 👑
— 0xbow.io (@0xbowio) March 31, 2025
Growing Adoption and Future Prospects
Early adoption figures are promising, with over 21 ETH deposited from 69 transactions. Initial deposits are capped at 1 ETH, but 0xbow.io plans to raise limits as the protocol gains more trust and usage. The Privacy Pools concept was inspired by a September 2023 white paper co-authored by Buterin, Chainalysis scientist Jacob Illum, and University of Basel academics, which has since been widely cited.
Also Read: Ethereum Price Dives Below Key Support: Will ETH Drop to $1,550 Next?
With illicit on-chain transactions totaling $41 billion in 2024—0.14% of total volume—Privacy Pools presents a viable alternative to traditional privacy mixers, offering users financial privacy without regulatory red flags. As adoption grows, this innovative tool could redefine the future of privacy on Ethereum.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
