Vitalik Buterin introduces decentralized privacy pools for balancing crypto regulation and anonymity

A new research paper led by Ethereum creator Vitalik Buterin proposes “Privacy Pools,” a novel approach to balance privacy protections and regulatory compliance in cryptocurrencies.

The paper outlines how Privacy Pools allows users to prove their crypto withdrawals do not originate from illicit sources without revealing their complete transaction histories. Users can generate zero-knowledge proofs demonstrating their withdrawals are associated with approved “sets” of past deposits.