Railgun, a crypto privacy protocol, has firmly denied allegations that it has been used by North Korea and other US-sanctioned entities for cryptocurrency money laundering. The protocol argues that its zero knowledge-based technology prevents such activities and that there is no evidence to support these claims.
Railgun’s total volume is approaching $1 billion, and its recent endorsement by Ethereum co-founder Vitalik Buterin in a social media post has further boosted its popularity and credibility. The platform, established in January 2021, utilizes zero-knowledge cryptography to protect wallet balances, transaction history, and transaction details, allowing users to engage with decentralized apps (DApps) on Ethereum and other supported chains while maintaining their privacy.
Elliptic, a blockchain security firm, previously referred to Railgun as a “prime alternative to Tornado Cash” after the US government imposed sanctions on the crypto mixer.
However, in January 2023, the FBI claimed that Railgun was used by North Korean cyber attackers to launder over $60 million worth of Ether (ETH) stolen in the 2022 Harmony Bridge heist.
In response to allegations made by crypto reporter Colin Wu, Railgun denied any involvement with the Lazarus group and labeled it as “false reporting.” The platform stated that the group has been blocked from using the Railgun system due to the implementation of the “Private Proofs of Innocence” system, which was launched over a year ago. Railgun also emphasized that the initial allegations were mistaken and baseless.
The Private Proofs of Innocence, also known as Private POI, was developed by Railgun’s researchers and contributors in January 2023. It employs cryptographic assurance to ensure that funds entering the Railgun smart contract are not associated with a predefined list of undesirable transactions or actors. Users are required to create a zero-knowledge proof to demonstrate that their funds are not part of the restricted list of transactions and wallets.
Vitalik Buterin has also come to Railgun’s defense, arguing that privacy is a fundamental right and praising the privacy pools protocol for making it more difficult for malicious actors to exploit the system.
Railgun has achieved a total volume of $962.8 million, with most of its activity occurring on the Ethereum network. Its total value locked on Ethereum has also surpassed $25 million, according to data from Dune Analytics.
The Railgun token (RAIL) experienced a rally on April 15 after reports emerged that Buterin had sent 100 ETH worth $325,000 to Railgun earlier that day. The token is currently trading at $1.18, representing an increase of 86.3% over the past seven days.
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