US senators, FBI aren’t opposed to crypto privacy: Railgun contributor

United States senators and intelligence agencies may not be as opposed to privacy-focused crypto protocols as some believe, according to Railgun researcher and advocate Alan Scott Jr. 

Speaking to Cointelegraph at ETH Global in Sydney on May 2, Scott — a contributor and public advocate for Railgun — said based on conversations he’s had with senators and the FBI in Washington D.C., he hasn’t seen any hints of a crypto privacy crusade on Capitol Hill. 

There are many people in the upper echelons of government who are “generally smart, want to do right, and protect people,” he said.

Railgun is a privacy-focused protocol that leverages smart contracts to ensure private transactions for decentralized finance (DeFi) users on the Ethereum network and several of its layer-2 networks including Polygon and Arbitrum.

However, Railgun is often lumped in the same boat as other crypto privacy protocols, such as Tornado Cash, which has seen the wrong end of the law in recent years. 

On April 17, an  X account touting itself as the official account for Railgun denied being used by North Korea and other U.S.-sanctioned entities to launder ill-gained crypto — specifically referring to an FBI statement that claimed Railgun was used to launder more than $60 million in Ether (ETH) during the 2022 Harmony bridge exploit.

Railgun said its zk-proof tech and “Private Proofs of Innocence” systems prevent bad actors from utilizing its protocol.

Scott said crypto users should remember the FBI is a large multifaceted organization and that the people he’d spoken to at the bureau were less concerned with privacy protocols and more concerned with bad actors looking to commit financial crimes.

Their concern is the potential problems around impeding their ability to catch bad actors.

“Which is a great thing for them to be concerned with,” Scott said, explaining earlier that other privacy technology such as 

Scott said that his conversations with politicians and regulators in the U.S. had been largely positive and that many of them seemed to be genuinely trying their best to understand the new developments in crypto more broadly.

“Whenever we talk about crypto, or we talk about DeFi you know, they ask well-informed questions and try to understand what the tech is like, how it operates, and why people like us like it so much,” he said.

On April 24, the co-founders of the crypto mixer and Bitcoin wallet Samourai Wallet were arrested on money laundering charges, with the Department of Justice (DOJ) alleging the platform handled $2 billion in unlawful transactions and facilitated $100 million in money laundering transactions.

Scott added that despite these actions against mixers like Samourai Wallet and the ongoing persecution of Tornado Cash developer Roman Storm, there didn’t seem to be a crusade against the concept of privacy in crypto more broadly.

“What [Railgun} is building is the disintermediation of finance, and DeFi is really quite a beautiful and very important thing to do.”

“Privacy is a keystone element of that. So while we’re advocating for it and being loud and talking about privacy as an important thing — it’s completely normal, and it's actually quite boring,” Scott said. “It's already a part of the traditional finance that exists today.”

He added that if the concept and application of privacy in crypto were to become illegal, it would be extremely unfortunate.

It just means we created a really hyper-accurate surveillance machine that can be monitored in live time.