ZK-proofs could protect privacy and still combat bad actors, VC argues

A16z Crypto’s comments come weeks after Roman Storm was found guilty of charges linked to his mixing service Tornado Cash, which masks the origin and destination of crypto.

The crypto-focused investment arm of venture capital firm Andreessen Horowitz argues that modern cryptographic techniques, such as zero-knowledge proofs, can protect user privacy but still allow law enforcement to crack down on bad actors. 

In a report on Tuesday, a16z Crypto policy partner Aiden Slaven and regulatory counsel David Sverdlov said that ZK-proofs, which verify the authenticity of data without disclosing any detailed private information, have the “greatest potential” by showing the origin of funds, but without publicly revealing private information.

Their report comes only two weeks after Roman Storm, the co-founder of the crypto mixing service Tornado Cash, which allows users to mask the origin and destination of cryptocurrency, was found guilty of charges related to conspiracy to run an unlicensed money business.

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