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Railgun Privacy Protocol, a pioneering step in the cryptocurrency world, recently surpassed $1 billion in transaction volume, marking a significant milestone. This achievement coincided with increased scrutiny on crypto mixers, leading to the closure or withdrawal of many competing protocols due to regulatory pressures. Railgun’s adoption was further solidified by support from notable figures like Ethereum founder Vitalik Buterin.
Vitalik Buterin Moved 80 ETH
On May 22, Vitalik Buterin drew attention by moving 80 ETH worth approximately $300,000 through Railgun. According to Arkham Intelligence, Buterin’s use of Railgun for transactions is consistent. Over the past six months, Buterin made regular transfers via Railgun, including a 100 ETH transfer in April. In a tweet, Buterin emphasized the importance of privacy pools in Railgun to protect users’ privacy from potential bad actors.
According to Dune Analytics, Railgun‘s all-time transaction volume reached $1.16 billion since its launch in January 2022. The protocol’s total value locked (TVL) also showed significant growth. DefiLlama data revealed that Railgun’s TVL increased by 146% to $76.2 million since mid-April and by 460% from $13.6 million at the start of the year to $76.2 million. This growth reflected Railgun’s importance in the crypto privacy space.
Railgun Adopted While Others Declined
Railgun’s adoption coincided with the decline of many other crypto mixer services. These services, especially under severe regulatory pressures from US authorities. A notable example is Tornado Cash, once a leading Ethereum privacy protocol, which faced US Treasury sanctions in August 2022.
These sanctions were a response to the protocol being used by the North Korea-backed Lazarus Group to launder stolen assets. Tornado Cash’s TVL dropped from $460 million to below $165 million within six weeks after the sanctions. However, Tornado Cash has since recovered, reaching a TVL of $513 million.
The US Treasury recently targeted Sinbad.io and Samourai Wallet’s co-founders for similar reasons, accusing them of facilitating money laundering and other illegal activities. These regulatory actions led other privacy-focused services to make changes. Wasabi Wallet, a popular Bitcoin wallet, announced in June that it would halt its Coinjoin feature and began blocking US residents from accessing its services as of April 27. This move highlighted the necessity for privacy protocols to comply with regulatory standards.
Railgun’s successes did not remain free from controversy. In January 2023, security researcher ZachXBT claimed that the Lazarus Group moved $63.5 million in stolen assets through Railgun. However, Railgun denied these allegations in April, stating that their systems prevent such groups from using their protocols. The Lazarus Group is known for high-profile cyberattacks, including the Sony Pictures hack and various cryptocurrency thefts.
