Privacy Matters, 41

gm, readers.

At Automata we work on protecting privacy and fairness. And in this newsletter, we find more reasons to talk about it. Explore headlines and catch up on the biggest crypto news in Web3 privacy.

This week:

  • DOJ arrests privacy-focused Samourai wallet founders over alleged money laundering and unlicensed money transmission

  • Nym partners with Aleo to enhance privacy for on-chain transactions

Zooming into ZK:

  • Scroll launches loyalty program

  • Matter Labs publishes a paper on Prooφ, a mechanism design for prover fee markets on ZK-rollups

  • Avnu launches Paymaster feature on Starknet

  • Mina Foundation announces plans to integrate Celestia’s Data Availability (DA) layer

  • Telos partners with Ponos to develop a hardware-accelerated zkEVM layer

  • RISC Zero launches R0 zkVM 1.0, a production-ready general purpose zkEVM

  • Coinbase executive joins Matter Labs to lead zkSync development

  • ZKasino launch sparks controversy as $33M in investments redirected to Lido

  • Vitalik Buterin criticizes ZKasino for misusing 'zero-knowledge' in $33M scam

  • Nym Technologies partners with Liquid Federation to enhance Bitcoin Layer-2 privacy and security

  • Nodle's DePIN launches on zkSync Era for media authentication

We dive into the details, so you don’t have to:

The Department of Justice (DOJ) has arrested the CEO, Keonne Rodriguez, and CTO, William Lonergan Hill, of Samourai Wallet, a privacy-focused cryptocurrency wallet, alleging it operated as a "cryptocurrency mixing service" facilitating criminal activity. Founded in 2015, Samourai Wallet offered privacy-enhancing features to obscure fund sources. The DOJ claims the platform enabled unlawful transactions exceeding $2 billion and laundered over $100 million in criminal proceeds. This arrest highlights ongoing regulatory scrutiny of privacy-enhancing tools in the cryptocurrency space.

The launch of ZKasino, a decentralized gambling network, caused outrage among investors when developers suddenly changed plans, preventing Ether redemption for users. Despite raising $33 million from over 10,000 participants, the funds were redirected to Lido, with the platform citing "noise and FUD" as reasons. Investors are concerned about a potential rug pull and seek accountability as the founder's personal information circulates online. Ethereum co-founder Vitalik Buterin criticized ZKasino for misusing the term "Zero-Knowledge (ZK)", emphasizing that its only ZK connection is through zkSync and warning about the term's misuse by fraudulent entities.

Nodle's smartphone-based DePIN, which powers applications for authenticating media content and locating assets, is launching on zkSync Era. The first initiative will introduce the ‘Click’ camera app as the world's first digital trust network, leveraging blockchain to combat misinformation. Nodle, originally based on Stellar and later on Polkadot, sees this move as a significant advancement in using blockchain technology for media authentication.

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This newsletter is for informational purposes only. It is not intended to be a substitute for professional financial advice or interpreted as investment advice. Cryptocurrencies are volatile assets and you should always do your own research before making any informed decisions when investing or trading.

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