Venture capital firms: zk-SNARKs can protect user privacy while combating illegal activities.

Golden Finance reports that the venture capital firm Andreessen Horowitz (a16z) has pointed out that modern encryption technologies such as zk-SNARKs can both protect user privacy and enable law enforcement to effectively combat criminals. In a report released on Tuesday, Aiden Slaven, policy partner at a16z Crypto, and regulatory legal advisor David Sverdlov stated that zk-SNARKs can verify the authenticity of data without disclosing any detailed private information. They believe that this technology has the "greatest potential" by demonstrating the source of funds while requiring no disclosure of private information. This report was released just two weeks after Roman Storm, the co-founder of the Crypto Assets mixing service Tornado Cash, was found guilty. Tornado Cash allows users to obscure the origins and destinations of their Crypto Assets, while Roman Storm was convicted of charges including conspiring to operate an unlicensed money transmission business. In the Tornado Cash case, law enforcement and prosecutors argued that the coin mixing service facilitated criminal activities by providing a means to conceal illegal gains. Slaven and Sverdlov stated in the report: "If users can provide such proof when converting crypto assets into fiat currency, then cash exchange points can obtain reasonable assurance that the crypto assets are not derived from criminal proceeds, while users can also retain the privacy of their on-chain transactions."