Tornado Cash users offered a method to prove the provenance of their funds

Chainway developers released a tool allowing Tornado Cash mixer users to anonymously prove that their initial deposits did not contain ‘dirty’ coins.

Today we release our open source Proof of Innocence protocol that allows you to prove that your withdrawals on Tornado Cash are not from bad actors, while still maintaining your anonymity. 🔥🖥️⛓️

— Chainway (@chainway_xyz) January 18, 2023

Сервис Proof of Innocence (“Доказательство невиновности”) provides law-abiding users the ability to create a list of malicious wallets with which they do not want to be associated.

Subsequently, using cryptography they can prove that the wallet they used to deposit funds is not on this list. The tool does not require the user to disclose their own address.

“A good way to prove that you are not a malefactor, without giving up your anonymity,” commented co-founder of Tornado Cash Roman Semenov.

Representatives of Chainway said they hope that the service will improve the security and reliability of the system, as well as protect legitimate users from being linked to illicit activities and enable seamless withdrawal of funds.

At present, a similar procedure is available directly in Tornado Cash, but it requires the user to provide their own address — this undermines the purpose of using a mixer.

On 8 August 2022, OFAC added Tornado Cash to the sanctions list on suspicion of laundering more than $7 billion in cryptocurrencies. The service’s users included the North Korean Lazarus Group.

According to Chainalysis, Tornado Cash processed over $3.5 billion during its operation, of which up to $1.2 billion was directly linked to thefts, hacks and other illicit operations.

On 12 August Dutch authorities arrested the service’s developer Alexey Pertsev. He is suspected of involvement in money laundering and concealing illicit financial flows. Most recently, his detention was extended to 20 February 2023.

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