Railgun Denies North Korea Links, Nears $1 Billion Volume: A Closer Look at the Crypto Privacy Protocol’s Defense

Railgun, a crypto privacy protocol, has recently come under scrutiny for allegedly being used by North Korea and other United States-sanctioned entities to launder cryptocurrency. However, Railgun has vehemently denied these accusations, stating that its zero knowledge-based technology prevents such illicit activities and that there is no evidence to support these claims.

The Railgun platform, founded in January 2021, has seen its total volume approach the $1 billion mark, with a recent endorsement from Ethereum co-founder Vitalik Buterin further boosting its popularity. Railgun utilizes zero-knowledge (ZK) cryptography to protect users’ wallet balances, transaction history, and details, allowing them to interact with decentralized apps (DApps) on Ethereum and other supported chains while maintaining their privacy.

Despite being labeled as a “prime alternative to Tornado Cash” by blockchain security firm Elliptic, Railgun faced allegations from the FBI in January 2023 that North Korean cyber attackers had used the platform to launder over $60 million worth of Ether (ETH) from the 2022 Harmony Bridge heist. In response to these claims, Railgun denied any involvement with the group known as Lazarus, stating that they are blocked from using the Railgun system by the “Private Proofs of Innocence” mechanism implemented over a year ago.

Private Proofs of Innocence, also known as Private POI, was introduced by Railgun’s researchers and contributors in January 2023. This feature utilizes cryptographic assurance to verify that funds entering the Railgun smart contract are not associated with a list of undesirable transactions or actors. Users are required to create a ZK-proof demonstrating that their funds are not part of the pre-set list of transactions and wallets.

Vitalik Buterin has also defended Railgun, emphasizing the importance of privacy in the crypto space and highlighting how the privacy pools protocol makes it more challenging for malicious actors to exploit the system. As a result of Buterin’s endorsement and the platform’s growing popularity, Railgun’s total volume has reached $962.8 million, with its total value locked on Ethereum surpassing $25 million.

The Railgun token (RAIL) experienced a significant rally after reports emerged that Buterin had sent 100 ETH worth $325,000 to the platform. Currently trading at $1.18, the RAIL token has seen an 86.3% increase in value over the past seven days. Despite facing allegations of being used for illicit activities, Railgun continues to attract attention and investment within the crypto community.