Key Takeaways
- Vitalik Buterin has transferred 662 ETH to Railgun in the past 10 months.
- Railgun’s “Privacy Pool” protocol draws its inspiration from a Buterin-led academic paper on blockchain privacy.
- North Korean hacking group Lazarus is alleged to have used Railgun in the past.
Railgun has a loyal customer by the name of Vitalik Buterin, who has sent another 400 ETH worth over $1 million to the privacy-preserving crypto platform.
Vitalik Buterin’s Privacy
According to on-chain data platform, Arkham Intelligence, Ethereum co-founder Vitalik Buterin has transferred 400 ETH to Railgun. This brings the total to 662 ETH worth roughly $1.7 million at the time of writing.
Spot On Chain data shows that the funds were initially sent to an anonymous wallet before being sent to Railgun. It’s unknown why Buterin has decided to move another sizeable chunk of ETH to the platform.
Some seem to think the move is “suspicious,” but is it really? For one, Buterin is extremely wealthy, so perhaps obscuring some funds and their intended activities is a solid precaution. Furthermore, Buterin has publicly praised Railgun and advocated that “privacy is normal,” suggesting that the move may be more symbolic than anything.
Not a Mixer?
Railgun hasn’t positioned itself as a crypto “mixer” akin to Tornado Cash or Samourai Wallet. A “true” mixer involves a user depositing funds, obscuring the token’s origins in the mixer, and then withdrawing them for the “privacy” to come into effect.
Railgun uses a “Privacy Pool” concept, drawn from Buterin’s 2023 academic paper on blockchain privacy. Essentially, it’s a private address system. The Privacy Pools use cryptographic proofs to verify the legitimate origin of funds and maintain privacy.
To get technical, it leverages Zero-knowledge proofs, specifically zk-SNARKs, to guarantee privacy. Each transaction enhances privacy by adding layers of random information to transaction details, making it even harder to trace its origins.
It effectively shields a user’s tokens so that all transactions appear as being sent/received by the Railgun contract address. The user’s tokens are private key controlled, meaning that the user can still use them for on-chain activities.
Both Railgun and Buterin claim that its system makes it “much harder” for hackers, fraudsters, and other criminals to join its Privacy Pool, but that may not be entirely true.
Bad Actors Remain?
In 2023, research from financial crime compliance-centric firm Elliptic suggested that hackers had used Railgun. Worst of all, the North Korean hacking group Lazarus obscured tens of millions using the platform.
It was a small portion of the group’s broader series of hacks. They had primarily used Tornado Cash to wash stolen cryptos and launder their funds, but following sanctions against the mixer, Railgun became the main alternative.
The Lazarus Group was caught after then redistributing the funds to three exchanges. However, Binance and Huobi successfully identified, blocked, and seized these funds. To this day, Railgun denies that Lazarus leveraged Railgun in any way.
Eddie is a gaming and crypto writer at CCN. Covering the often weird and wonderful world of Web3 with an adoring, but skeptical eye.
Prior to CCN, Eddie has spent the past seven years working his way through the crypto, finance, and technology industry. He began with PR and journalism with Bitcoin PR Buzz and BitcoinNews.com, eventually working his way to become a copywriter with a dozen firms, including the likes of Polkadot before returning to journalism in 2023.
Having studied Radio production and journalism at University in the UK, Eddie spent a few years making podcasts and presenting on a local London radio station as he built up his writing chops.
A lifelong skateboarder, Eddie can often be found at the skatepark or touring the streets looking for something new to try. That, or kicking back playing JRPGs on his original PSP.
