Railgun DAO, a blockchain project that uses zero-knowledge cryptography to provide extra privacy to users when making transactions, said it has teamed with the Turkish developer Chainway to add a “proof of innocence” feature to satisfy anti-money-laundering and sanctions compliance.
Chainway released its “proof of innocence” tool in January, allowing blockchain users to prove that withdrawals from the coin mixer Tornado Cash are not from a list of specified deposits. The U.S. Treasury Department blacklisted Tornado Cash last August, arguing that the platform had been used to launder more than $7 billion.
The new functionality on Railgun allows users “to create a proof that their transactions are from a list of transactions that have not interacted with any blacklisted addresses, without revealing their identity,” according to a statement. The Railgun privacy system is deployed on Ethereum, Polygon, Arbitrum and Binance Smart Chain.
Users can “mathematically prove the legitimate origins of their funds,” according to the statement. “It is an entirely zero-knowledge-based system, so user privacy is never compromised.”
Lists of blacklisted addresses can be sourced from forensic tools like Elliptic, TRM Labs or Chainalysis, according to Railgun.
Proof of concept on the new feature is expected late in the second quarter of this year, with full delivery expected in the third quarter.
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Digital Currency Group, which owns CoinDesk, is a big investor in Railgun DAO, having acquired and staked about $10 million of its native RAIL tokens while donating about $7 million in stablecoins to the project’s decentralized autonomous organization treasury.
