A new privacy tool on Ethereum, called ‘Privacy Pools,’ has launched, offering users the ability to transact privately while ensuring their funds aren’t associated with illicit activities. Developed by 0xbow.io, the platform launched on March 31st and garnered support from Ethereum co-founder Vitalik Buterin, who made one of the first deposits on the platform. 0xbow.io utilizes ‘Association Sets,’ a method for batching transactions anonymously, and a screening process to ensure funds aren’t linked to illicit actors like hackers or scammers. The dynamic nature of these sets means that if a transaction is later found to be illicit, it can be removed from the set without disrupting other deposits. 0xbow.io claims this innovation helps achieve regulatory compliance while promoting on-chain privacy for Ethereum users. Privacy protocols have faced criticism from regulators due to their potential use by illicit actors in money laundering. The recent ban of Tornado Cash, a prominent privacy tool, highlights this concern. However, the recent removal of sanctions against Tornado Cash after a US appeals court deemed them unlawful provides hope for future innovation in the space. The initial deposit limit for Privacy Pools is 1 Ether (ETH) with plans to increase it as the platform becomes more robust. Initial deposits from users, including Vitalik Buterin, have reached over 21 ETH. 0xbow.io credits support from other notable entities such as Number Group, BanklessVC, Public Works and several angel investors. The Privacy Pools project also received contributions from prominent figures in the crypto space like Vitalik Buterin, Chainalysis Chief Scientist Jacob Illum, and academics at the University of Basel. A successful audit by Audit Wizard, a smart contract auditing firm co-founded by former Apple engineer Joe van Loon, further ensures the platform’s security. The use of Privacy Pools is supported by research published in September 2023 that outlines its potential benefits. The Chainalysis report for 2025 indicates significant growth in illicit crypto transactions – exceeding $41 billion in 2024 representing just 0.14% of the total on-chain volume. This underscores the continued need for innovative privacy solutions within the blockchain ecosystem.