According to a report by Golden Finance, Andreessen Horowitz (a16z), a venture capital firm, has stated that modern encryption technologies such as zero knowledge proofs can protect user privacy and enable law enforcement agencies to effectively combat criminals.
In a report released on Tuesday, Aiden Slaven, policy partner of a16z Crypto, and regulatory legal advisor David Sverdlov stated that zero knowledge proofs can verify the authenticity of data without disclosing any detailed private information. They believe that this technology has the "greatest potential" by showcasing the source of funds without the need to disclose private information.
This report was released just two weeks after Roman Storm, co-founder of the cryptocurrency mixing service Tornado Cash, was found guilty. Tornado Cash allows users to hide the source and destination of cryptocurrencies, while Roman Storm was found guilty of conspiring to operate unlicensed remittance services and other charges.
In the Tornado Cash case, law enforcement and prosecutors argued that the cryptocurrency mixing service assisted criminal activities by providing means to conceal illegal gains.
Slaven and Sverdlov stated in their report, "If users can provide such proof when exchanging cryptocurrency for fiat currency, cash exchange points can obtain reasonable assurance that the cryptocurrency is not derived from criminal proceeds, while users can also retain the privacy of their on chain transactions
