Vitalik: The Railgun privacy pool mechanism can filter illegal funds without the need for monitoring or backdoors

ChainCatcher message, Ethereum co-founder Vitalik Buterin stated: "The Railgun privacy pool mechanism allows Railgun to avoid processing funds from criminal activities without any monitoring or backdoors. Here's how it works: anyone can deposit into Railgun. After the deposit, there will be a 1-hour detection period during which various algorithms will analyze whether the deposit may come from activities deemed criminal.

If the deposit passes the screening, the user can use zero-knowledge proofs (ZKP) for private withdrawals after 1 hour (but it is recommended to wait longer to achieve a sufficient anonymity set). If the deposit does not pass the screening, the user can only withdraw the funds back to their own address. This will not result in the funds being frozen or confiscated; it simply means the user cannot enjoy the anonymity features of the privacy pool. If someone disagrees with Railgun's screening rules, they are free to fork and create their own privacy pool, but if they cannot gain sufficient public support, their anonymity will be very limited."