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 platform, which has reached a total volume of nearly $1 billion, relies on zero-knowledge-based technology to ensure privacy and argues that there is no evidence to support these accusations.
Railgun, established in January 2021, utilizes zero-knowledge (ZK) cryptography to protect wallet balances, transaction history, and transaction details. This allows users to engage in decentralized apps (DApps) on Ethereum or other supported chains while maintaining their privacy.
Blockchain security firm Elliptic previously referred to Railgun as a “prime alternative to Tornado Cash” after the US government imposed sanctions on the crypto mixer.
In January 2023, the FBI claimed that North Korean cyber attackers had used Railgun to launder over $60 million worth of Ether (ETH) from the Harmony Bridge heist in 2022.
In response to a crypto reporter’s post, Railgun denied the use of the privacy protocol by Lazarus, labeling it as “false reporting.” The company explained that the “Private Proofs of Innocence” system, implemented over a year ago, prevents Lazarus and similar groups from using the Railgun system.
Railgun’s researchers and contributors introduced Private Proofs of Innocence, also known as Private POI, in January 2023. This system ensures that funds entering the Railgun smart contract are not associated with a list of undesirable transactions or actors. Users are required to create a ZK-proof demonstrating that their funds are not part of a predetermined list of transactions and wallets.
Vitalik Buterin, co-founder of Ethereum, has also come to the defense of Railgun, emphasizing the importance of privacy and stating that the privacy pools protocol makes it more challenging for malicious actors to infiltrate the system.
Railgun has achieved a total volume of $962.8 million, with its total value locked on Ethereum surpassing $25 million. The token Railgun (RAIL) experienced a rally after it was reported that Buterin had sent 100 ETH worth $325,000 to Railgun. Currently, the token is trading at $1.18, marking an 86.3% increase over the past seven days.