They Want Your Privacy — The Fire That Tornado Cash Started

The recent sanction of Tornado Cash, a decentralised protocol for private transactions on Ethereum, by the U.S Treasury has lit the fuse of a spiralling, heated and heavily polarised discussion around privacy both on and off chain.

The conversation has quickly spread into legal channels as well as U.S representative Tom Emmer demands answers regarding the Tornado Cash Ban. This article breaks down the events that took place following the Tornado Cash ban, and analyses the importance of privacy on the Blockchain.

But first a quick overview of the Tornado Cash protocol —

What is Tornado Cash?

Tornado Cash is an Ethereum-based cryptocurrency mixes that supports a multitude of Ethereum-based transactions, from native ETH to ERC-20. Users can have access to a private “lockbox” where funds can be withdrawn or deposited anonymously with the help of access keys.

The access to the lockbox is managed by a ZK (zero knowledge) proof algorithm where the user proves they are the owner of the key, without actually providing any personally indefinable information. To further protect the anonymity of users, only a few pre-set quantities can be transacted on the protocol. Assets that have gone through the Tornado Cash protocol are not easily…