Railgun DAO, a blockchain project that uses zero-knowledge cryptography to provide extra privacy to users when making transactions, said it has teamed with the Turkish developer Chainway to add a “proof of innocence” feature to satisfy anti-money-laundering and sanctions compliance.

Chainway released its “proof of innocence” tool in January, allowing blockchain users to prove that withdrawals from the coin mixer Tornado Cash are not from a list of specified deposits. The U.S. Treasury Department blacklisted Tornado Cash last August, arguing that the platform had been used to launder more than $7 billion.

The new functionality on Railgun allows users “to create a proof that their transactions are from a list of transactions that have not interacted with any blacklisted addresses, without revealing their identity,” according to a statement from a Railgun contributor. The Railgun privacy system is deployed on Ethereum, Polygon, Arbitrum and Binance Smart Chain.

Users can “mathematically prove the legitimate origins of their funds,” according to the statement. “It is an entirely zero-knowledge-based system, so user privacy is never compromised.”

Lists of blacklisted addresses can be sourced from forensic tools like Elliptic, TRM Labs or Chainalysis, according to the Railgun contributor.

Proof of concept on the new feature is expected late in the second quarter of this year, with full delivery expected in the third quarter.

Digital Currency Group, which owns CoinDesk, is a big investor in Railgun DAO, having acquired and staked about $10 million of its native RAIL tokens while donating about $7 million in stablecoins to the project’s decentralized autonomous organization treasury.

Privacy Ethereum Digital Currency Group Polygon Binance Smart Chain Arbitrum Tornado Cash Anti-Money Laundering Sanctions

Bradley Keoun

Bradley Keoun is CoinDesk's managing editor of tech & protocols, where he oversees a team of reporters covering blockchain technology, and previously ran the global crypto markets team. A two-time Loeb Awards finalist, he previously was chief global finance and economic correspondent for TheStreet and before that worked as an editor and reporter for Bloomberg News in New York and Mexico City, reporting on Wall Street, emerging markets and the energy industry. He started out as a police-beat reporter for the Gainesville Sun in Florida and later worked as a general-assignment reporter for the Chicago Tribune. Originally from Fort Wayne, Indiana, he double-majored in electrical engineering and classical studies as an undergraduate at Duke University and later obtained a master's in journalism from the University of Florida. He is currently based in Austin, Texas, and in his spare time plays guitar, sings in a choir and hikes in the Texas Hill Country. He owns less than $1,000 each of several cryptocurrencies.