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Privacy Pools launch on Ethereum, with Vitalik demoing the feature

A new semi-permissionless privacy tool, Privacy Pools, has launched on Ethereum, allowing users to transact privately while proving their funds aren’t linked to illicit activities.

The privacy tool, launched by Ethereum builders 0xbow.io on March 31, earned support from the likes of Ethereum co-founder Vitalik Buterin, who not only backed the privacy project but made one of the first deposits on the platform. 

0xbow.io said that it implements “Association Sets” to batch transactions into the anonymous Privacy Pools and that a screening test is conducted to ensure that those transactions aren’t linked to illicit actors, such as hackers, phishers and scammers.

The Association Sets are “dynamic” — meaning that if a transaction is admitted but later found to be illicit, it can be removed from the set without disrupting any other deposits, 0xbow.io said.

If a deposit is disqualified, the user can click the “ragequit” function to return the funds to their original deposit address.

The innovation is part of 0xbow.io’s vision to “Make Privacy Normal Again” while also attempting to achieve regulatory compliance.  

Privacy protocols have received considerable backlash from regulators in recent years due to their increasing use by illicit actors to launder funds. 

One of those privacy tools, Tornado Cash, was sanctioned by the US Treasury’s Office of Foreign Assets Control (OFAC) between August 2022 and March 2025 after it was linked to around $7 billion laundered by the North Korean state-backed Lazarus Group.

Tornado Cash has since been removed from OFAC’s blacklist after a US appeals court said the sanctions were unlawful in January 2025.

0xbow.io noted that initial deposits are limited to 1 Ether (ETH) but that the limit would be raised once the privacy protocol is more battle-tested.

Privacy Pools inspired by Buterin and others

Over 21 ETH has already been transferred into Privacy Pools from 69 deposits, including at least one from Buterin, 0xbow.io noted.

Privacy Pools launch on Ethereum, with Vitalik demoing the feature

Source: Vitalik Buterin

In addition to Buterin, 0xbow.io said it also received investment support from Number Group, BanklessVC, Public Works and several angel investors.

Related: Privacy isn’t a luxury in crypto, it’s a necessity — Midnight CEO

0xbow.io also praised Buterin, Chainalysis Chief Scientist Jacob Illum, and two academics at the University of Basel in Switzerland for crafting a September 2023 white paper outlining how Privacy Pools could be built. 

0xbow.io strategic adviser Ameen Soleimani also contributed to the paper, which has seen over 12,000 downloads and has been cited in nine other papers.

The Privacy Pool code also passed a successful audit from Audit Wizard. a smart contract auditing firm co-founded by former Apple engineer Joe van Loon.

More than $41 billion worth of illicit transfers were made in 2024,  which made up 0.14% of total onchain volume for the year, according to the Chainalysis 2025 Crypto Crime report published on Jan. 15.

While it marked around an 11% fall from 2023, Chainalysis said that figure could climb to around $51 billion as more criminal-tied addresses are found.

Magazine: What are native rollups? Full guide to Ethereum’s latest innovation

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SEC drops investigation into PayPal’s stablecoin

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SEC drops investigation into PayPal’s stablecoin

SEC drops investigation into PayPal’s stablecoin

PayPal says the US Securities and Exchange Commission has abandoned its investigation into the payment giant’s US-dollar stablecoin.

PayPal said in an April 29 regulatory filing that the SEC concluded its investigation into PayPal USD (PYUSD) and wouldn’t be taking any action.

The company said it received a subpoena from the SEC’s Division of Enforcement over its stablecoin in November 2023. 

“The subpoena requests the production of documents. We are cooperating with the SEC in connection with this request,” PayPal stated at the time.

In its latest filing, the firm said the SEC notified it in February that the agency “was closing this inquiry without enforcement action.”

PayPal has said its stablecoin is 100% redeemable for US dollars and “fully backed” by dollar deposits, including short-term treasuries and cash equivalents. 

However, the stablecoin has struggled to gain momentum in a crowded market dominated by rivals Tether and Circle. PYUSD has a market capitalization of just $880 million, less than 1% of Tether’s (USDT) $148.5 billion.

PayPal’s stablecoin has seen better growth this year with a 75% increase in PYUSD circulating supply since the beginning of 2025, according to CoinGecko. It remains down 14% from its peak supply of just over $1 billion in August 2024. 

SEC drops investigation into PayPal’s stablecoin
PayPal USD market capitalization. Source: CoinGecko

Earnings on PYUSD, Coinbase partnership

That growth could be bolstered by a company announcement on April 23 introducing rewards for PYUSD in a new loyalty offering that will enable US users to earn 3.7% annually for holding the asset on the platform. 

Meanwhile, on April 24, PayPal announced a partnership with Coinbase to increase the adoption of PYUSD. 

“We are excited to drive new, exciting, and innovative use cases together with Coinbase and the entire cryptocurrency community, putting PYUSD at the center,”  said Alex Chriss, PayPal President and CEO.

Related: PayPal to offer 3.7% yield on stablecoin balances: Report

The payments giant also reported robust first-quarter earnings and the completion of significant share repurchase activities. 

The firm beat Wall Street estimates, earning $1.33 per share in the first quarter, topping analyst expectations of $1.16. Revenue rose 1% from a year before to $7.8 billion. 

Magazine: Bitcoin $100K hopes on ice, SBF’s mysterious prison move: Hodler’s Digest

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BlackRock files to create digital shares tracking one of its money market funds

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BlackRock files to create digital shares tracking one of its money market funds

BlackRock files to create digital shares tracking one of its money market funds

Asset manager BlackRock has filed to create digital ledger technology shares from one of the firm’s money market funds, which will leverage blockchain technology to maintain a mirror record of share ownership for investors.

The DLT shares will track BlackRock’s BLF Treasury Trust Fund (TTTXX), which may only be purchased from BlackRock Advisors and The Bank of New York Mellon (BNY), the firm said in its April 29 Form N-1A filing with the Securities and Exchange Commission.

The money market fund holds over $150 million worth of assets, invested almost entirely in US Treasury bills and cash.

BlackRock said that the shares “are expected to be purchased and held through BNY, which intends to use blockchain technology to maintain a mirror record of share ownership for its customers.”

Unlike the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), DLT shares won’t be tokenized but will instead be used as a transparency tool to verify ownership.

BlackRock will continue to maintain traditional book-entry records as the official ownership ledger.

BlackRock didn’t propose a ticker or set a management fee for the DLT shares in its filing.

A minimum initial investment of $3 million worth of DLT is required for institutions seeking to purchase the digital shares.

BlackRock follows Fidelity’s March 21 filing to list an Ethereum-based OnChain share class, which seeks to track the Fidelity Treasury Digital Fund (FYHXX) — an $80 million fund consisting almost entirely of US Treasury bills.

While the OnChain share class filing is pending regulatory approval, Fidelity expects it to take effect on May 30.

Wall Street heavyweights continue to explore blockchain use cases

Asset managers have increasingly turned to blockchain to tokenize Treasury bills, bonds and private credit over the past few years.

Related: BlackRock Bitcoin ETF buys $970M in BTC as inflows surge, boost market

The treasury tokenization market is currently valued at $6.16 billion, led by BlackRock’s BUIDL at $2.55 billion, while the Franklin Templeton-issued Franklin OnChain US Government Money Fund (BENJI) secures over $700 million worth of real-world assets, according to rwa.xyz.

BlackRock files to create digital shares tracking one of its money market funds
Market caps of blockchain-based Treasury products. Source: rwa.xyz

Ethereum remains the chain of choice for tokenizing treasury assets, and currently houses over $4.55 billion worth, while the Stellar network and Solana round out the top three at $474.9 million and $274.5 million, respectively.

The potential of RWA tokenization has also been championed by BlackRock’s CEO, Larry Fink, who believes the technology could revolutionize investing.

Magazine: Ethereum is destroying the competition in the $16.1T TradFi tokenization race

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US Treasury’s OFAC can’t restore Tornado Cash sanctions, judge rules

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US Treasury’s OFAC can’t restore Tornado Cash sanctions, judge rules

US Treasury’s OFAC can’t restore Tornado Cash sanctions, judge rules

The US Treasury Department’s Office of Foreign Assets Control can’t restore or reimpose sanctions against the crypto mixing service Tornado Cash, a US federal court has ruled.

Austin federal court judge Robert Pitman said in an April 28 judgment that OFAC’s sanctions on Tornado Cash were unlawful and that the agency was “permanently enjoined from enforcing” sanctions.

Tornado Cash users led by Joseph Van Loon had sued the Treasury, arguing that OFAC’s addition of the platform’s smart contract addresses to its Specially Designated Nationals and Blocked Persons (SDN) list was “not in accordance with law.” 

OFAC had sanctioned Tornado Cash in August 2022, accusing the protocol of helping launder crypto stolen by the North Korean hacking collective, the Lazarus Group.

The agency dropped the platform from the sanctions list on March 21 and argued that the matter was “moot” after a court ruled in favor of Tornado Cash in January.

This latest amended ruling prevents OFAC from re-sanctioning Tornado Cash or putting it back on the blacklist.

Initially, the court denied a motion for partial summary judgment and granted in favour of the Treasury. However, the Fifth Circuit reversed the decision and instructed the lower court to grant partial summary judgment to the plaintiffs, which led to the sanctions being revoked. 

In March, the Treasury argued there was no need for a final court judgment in the lawsuit.

US Treasury’s OFAC can’t restore Tornado Cash sanctions, judge rules
An excerpt from Judge Robert Pitman’s ruling. Source: CourtListener

Crypto body petitions White House over Tornado Cash

On April 28, the DeFi Education Fund petitioned White House crypto czar David Sacks to have prosecutors drop charges against Tornado Cash co-founder Roman Storm.

Related: Samourai Wallet, feds ask for time to mull dropping crypto mixer case

Storm was charged in August 2023 with helping launder over $1 billion in crypto through the protocol, and his trial is still set for July.

The group said that the Department of Justice was attempting to hold software developers criminally liable for how others use their code, which they argued was “not only absurd in principle, but it sets a precedent that potentially chills all crypto development in the United States.”

Magazine: Bitcoin $100K hopes on ice, SBF’s mysterious prison move: Hodler’s Digest

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