Privacy Cash has temporarily paused deposits following the Binance hack, saying it will strengthen wallet screening after investigators traced about $1.2 million in theft-linked funds into its privacy pools.
Summary
Privacy Cash announced the suspension in a Nov. 4 post, directly linking its decision to the recent Binance attack. The team said it wanted to prevent bad actors from using a product originally built to give ordinary users financial privacy.
“When we started Privacy Cash, our goal was to make privacy tools for everyday people, not to enable crime,” the project wrote.
During the pause, the team said it would continue strengthening its wallet-screening system. Existing users will still be able to withdraw, according to the announcement, which asked users to watch for further updates on when service would resume.
The team repeated its commitment to improving screening in replies to users questioning the suspension.
One user asked whether the pause meant the service was effectively unavailable for everyday privacy needs. Privacy Cash responded that it was working to make the product more robust and would provide updates.
Another questioned why Privacy Cash was suspending deposits while Binance, the exchange that suffered the theft, was operating. The project replied that Binance had paused withdrawals for several days and reiterated that its own screening system would be strengthened.
The announcement described a temporary deposit suspension without setting a reopening date or detailing the changes planned for its screening process. Its operational commitment was that withdrawals would remain available throughout the pause.
The suspension follows blockchain monitoring that first identified stolen Solana entering the service.
As crypto.news previously reported, Onchain Lens flagged 8,567 SOL in deposits from an address linked to the Binance hacker on Nov. 3. The monitoring account valued those transfers at approximately $798,000 and said several other addresses were showing similar activity.
Elliptic’s updated investigation subsequently described deposits across both Ethereum and Solana. The firm traced approximately 41 ETH and 9,600 SOL into Privacy Cash on Nov. 3, worth around $1 million combined.
Its Nov. 4 update identified another roughly 2,300 SOL entering the protocol, bringing the estimated value of theft-linked ETH and SOL deposits to about $1.2 million.
The initial Onchain Lens figure concerned one identified Solana address. Elliptic’s later assessment covered activity involving two assets and further deposits the following day.
Privacy Cash’s official documentation describes an existing screening process in which signed deposit transactions pass through a relayer that checks wallet addresses using CipherOwl. According to the project, deposits are rejected when an address is flagged as malicious.
The same documentation lists support for Solana, Ethereum, Base, BNB Chain, and Robinhood Chain. Users deposit tokens into a pool and later withdraw them to a recipient address, with zero-knowledge proofs designed to prevent a public link between the two transactions.
For withdrawals, the project says a proof generated on the user’s device prevents the relayer from changing the recipient or amount. Its documentation nevertheless acknowledges that observers may infer connections when distinctive amounts enter and leave a pool close together.
Privacy Cash’s announcement did not explain how the theft-linked deposits passed into its pools or identify a specific failure in the screening process.
Binance co-CEO Richard Teng said on Nov. 3 that the exchange had replenished 98% of assets affected by the $6.34 billion attack and was continuing purchases of less liquid tokens.
He announced completion of the exchange’s latest proof of reserves. The replenishment figure concerns assets Binance acquired to cover affected balances; it does not establish that investigators recovered the same proportion of stolen funds.
Elliptic’s Nov. 4 assessment put approximately $2.85 billion in frozen assets and about $3.21 billion remaining in theft-linked addresses. The firm assessed that only a negligible amount had likely been cashed out.
On the U.S. enforcement side, Elliptic noted that the FBI had published attacker addresses. Its investigators said centralized exchanges and over-the-counter brokers remained potential points where stolen funds could be identified and stopped when holders attempted to cash out.
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