0xBow launches tool to separate legal Tornado Cash funds

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Mikhail Vnuchkov

14.10.2025

0xBow launches tool to separate legal Tornado Cash funds — Tornado Cash users gain compliance tool from 0xBow team

The team behind the cryptocurrency privacy project Privacy Pools, 0xBow, has launched a new tool that will allow Tornado Cash users to separate their funds from illicit activity.

According to The Block, citing a representative from 0xBow, the new mechanism — Tornado Cash Proof of Association — is the first working system that combines privacy preservation with regulatory compliance for Tornado Cash.

“We see this as an important step forward for Tornado users who were unfairly caught in the crossfire of law enforcement actions, and as a practical model for the future of privacy and compliance,” the 0xBow representative told The Block.

The 0xBow protocol employs zero-knowledge proofs and other privacy-preserving techniques to let users demonstrate — without revealing too much information — that their funds are not associated with known illicit actors.

“By inputting a note and withdrawal address, the system generates a proof that cross-checks your withdrawal against a carefully curated list of Tornado Cash deposits. This list excludes illegal participants who have tainted the protocol,” explained the 0xBow team.

If the withdrawal address passes verification, it is added to a public Proof of Association registry, confirming the legitimacy of the transaction — all without disclosing any personal data.

Tornado Cash seeks to distance itself from criminal use

Currently, the blacklist of the system includes over 16,000 addresses linked to hacks, phishing attacks, and other illicit activities.

Launched earlier this year, the Privacy Pools project uses the concept of an “association set provider” — an idea first introduced by Vitalik Buterin and several well-known cryptographers. These pools allow whitelisted users to anonymize their ERC-20 tokens without contributing to shared pools, such as Tornado Cash, which have been exploited by bad actors.

Tornado Cash was sanctioned by the U.S. Treasury’s Office of Foreign Assets Control (OFAC) in August 2022 for allegedly facilitating the laundering of billions in illicit funds, including those tied to North Korea’s Lazarus Group.

Although the Ethereum-based protocol was recently removed from the OFAC sanctions list for certain categories of U.S. citizens after an appeals court ruling, legal uncertainty remains. This has made users hesitant to anonymize their funds, as some exchanges have required Tornado Cash users to disclose the origin of their assets.

As we wrote, Tornado Cash developer Roman Storm found guilty, partially freed

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