Vitalik Buterin Applauds Railgun for Blocking zkLend Attacker’s Funds

Ethereum’s development community is making significant strides in both privacy enhancements and upgrade efficiency. In recent discussions, Ethereum co-founder Vitalik Buterin praised the Railgun protocol for successfully blocking an attacker’s attempt to launder stolen funds, showcasing the potential for compliant onchain privacy solutions. At the same time, Ethereum core developers have voiced strong support for a faster upgrade cadence, aiming to streamline protocol improvements through upcoming updates like Pectra and Fusaka. 

Ethereum Founder Vitalik Buterin Hails Railgun for Thwarting zkLend Attacker, Showcasing Onchain Privacy Compliance

Ethereum co-founder Vitalik Buterin has praised the privacy-focused blockchain protocol Railgun for successfully preventing an attacker from laundering stolen funds through its platform. The move, highlighted in Buterin’s post on Thursday, showcases the growing potential of compliant onchain privacy mechanisms that avoid backdoors and centralized snooping while still deterring illicit activities.

“This is a solid demonstration of Railgun’s privacy pools mechanism working in practice, allowing Railgun to avoid serving proceeds of crime without using any snooping/backdoors,” Buterin stated.

Railgun is a privacy protocol built on Ethereum that utilizes zero-knowledge proofs to obscure transaction details, including the sender, recipient, and transaction amount. Unlike traditional blockchain mixers such as Tornado Cash, which have faced significant regulatory scrutiny, Railgun integrates a system called Private Proofs of Innocence, designed to block tainted funds from being anonymized within its network.

When assets are deposited into Railgun, they are automatically screened against a database of known malicious addresses. If the tokens originate from flagged sources, they are prevented from entering the privacy pool, ensuring that Railgun does not inadvertently facilitate illicit activity. This mechanism represents a crucial step forward in achieving privacy while adhering to compliance standards that discourage money laundering.

The success of Railgun’s filtering system became evident when an attacker who exploited zkLend, a money-market protocol built on Starknet, attempted to use Railgun to conceal stolen funds. The attack, which took place on Feb. 12, involved manipulating a rounding error bug in zkLend’s “lending_accumulator” feature, enabling the hacker to fraudulently withdraw 3,600 ETH—worth approximately $9.5 million at the time.

After bridging the stolen funds from Starknet to Ethereum, the attacker moved them into Railgun. However, because of the privacy protocol’s security measures, the funds were flagged, preventing them from being mixed within Railgun’s privacy pool. This left the attacker with limited laundering options, as the funds remained traceable and could not be effectively anonymized through the service.

A New Standard for Privacy Compliance in Crypto

The incident is part of a broader evolution in blockchain privacy tools, which have historically been a double-edged sword—empowering users with financial confidentiality while simultaneously raising concerns over potential misuse by bad actors. Privacy-enhancing solutions like Tornado Cash and Bitcoin Fog have faced regulatory crackdowns due to their perceived role in laundering illicit funds, leading to legal actions against developers and increased government scrutiny.

Railgun, however, presents an alternative model, balancing financial privacy with regulatory considerations. By implementing an automated screening system, the protocol aims to cater to legitimate use cases—such as confidential payroll processing and private transactions—while mitigating the risk of becoming a haven for criminal activity. Buterin, who has long advocated for privacy-preserving solutions that maintain ethical and legal safeguards, has written extensively on the concept of Privacy Pools since 2023, emphasizing their potential to bridge the gap between decentralization and compliance.

“If you disagree with Railgun’s filters, anyone is free to fork and make their own pool with their own rules, though if you can’t get reasonably wide public support you’re going to have a tiny anonymity set,” Buterin remarked in his post, highlighting the open-source and modular nature of privacy-focused blockchain solutions.

With increasing regulatory pressure on blockchain privacy tools, the successful filtering of illicit funds by Railgun sets an important precedent. It demonstrates that privacy and security can coexist without resorting to centralized control or invasive surveillance mechanisms. The outcome of this incident may also influence other privacy-focused projects to adopt similar compliance measures to avoid regulatory crackdowns while still offering users meaningful financial confidentiality.

Meanwhile, the zkLend team continues to track the hacker’s activity, collaborating with blockchain security firms and law enforcement to retrieve the stolen funds. The attacker has yet to accept an offer to return 90% of the funds in exchange for leniency as a “white hat” ethical hacker. With their address flagged across multiple blockchain tracking platforms, their options for laundering the funds are rapidly shrinking.

Blockchain security expert Vladimir S. noted that the hacker’s best option may be to return the funds, as attempting to move them through traditional laundering methods like centralized exchanges or Tornado Cash remains risky due to increased scrutiny. “The best for the attacker is to return the money because otherwise costs for transferring may exceed 90%,” he commented.

The Railgun case illustrates how technological advancements can help the crypto ecosystem navigate the fine line between privacy and compliance. As the industry matures, tools that enable privacy while actively filtering out illicit activities could become the gold standard, helping blockchain networks maintain their integrity while resisting excessive government overreach.

As Buterin and other blockchain researchers continue to refine privacy pools and similar concepts, the crypto industry may soon see broader adoption of such mechanisms, ensuring that decentralized finance remains both secure and truly permissionless.

Ethereum Developers Push for Faster Upgrade Cadence, Pectra and Fusaka Set to Shape Network’s Future

Ethereum core developers and ecosystem leaders have signaled strong support for accelerating the timeline of future protocol upgrades, following discussions during the Feb. 13 “All Core Devs” meeting. 

The meeting, which included at least 25 participants, featured discussions on upcoming upgrades, notably Pectra and Fusaka, with Ethereum Foundation (EF) researcher Tim Beiko and protocol support team member Nixo Rokish weighing in on the need for a more aggressive approach to deployment.

“Pretty strong consensus from the Pectra Retrospective post that the people want faster fork cadences,” Rokish noted in a Feb. 13 X post. “That’s going to mean less dilly-dallying about scope and more aggressively presented opinions.”

The Pectra upgrade, expected to launch in April, could mark one of the most significant Ethereum updates to date. With up to 20 Ethereum Improvement Proposals (EIPs) on the table, Pectra is set to introduce enhancements aimed at improving user experience (UX) and wallet functionality. One of the key scaling changes involves doubling the blob count for data availability from three to six, a move expected to optimize Layer 2 rollups and network efficiency.

Beiko announced during the call that Pectra system contracts are scheduled to go live on Ethereum mainnet on Feb. 17, representing an important step in the upgrade’s rollout.

Alongside Pectra, Ethereum developers also discussed Fusaka, another forthcoming protocol upgrade focused on refining the transaction inclusion process. The development team has set April 10 as the deadline to finalize Fusaka’s specifications.

Key dates for Fusaka’s implementation include:

• March 13: Deadline for developers to propose Proposed for Inclusion (PFI) EIPs.

• March 27: Community deadline to submit preferences for which EIPs should be considered.

The Fusaka upgrade represents Ethereum’s continued effort to improve transaction efficiency and reliability, further reinforcing its position as a leading blockchain for decentralized applications (dApps) and DeFi protocols.

Pressure from Venture Capitalists to Move Faster

The push for a more rapid development cadence comes amid calls from prominent industry players, including venture capital firm Paradigm, urging Ethereum core developers to accelerate protocol updates and technical milestones. In a Jan. 27 post, Paradigm emphasized that Ethereum must move faster without sacrificing its foundational values.

“There are many high-impact improvements that Ethereum can start accelerating towards today without sacrificing its values,” Paradigm stated. “Discussions about tradeoffs in values might be premature and could lead to rigidity.”

The firm added that empowering developers with a mandate to iterate faster and in parallel will help Ethereum address technical challenges more efficiently while avoiding unnecessary delays caused by prolonged debates.

Ethereum’s history has often been marked by deliberate and methodical upgrade processes, ensuring security and consensus across its decentralized ecosystem. However, with increasing competition from alternative Layer 1 and Layer 2 solutions, industry leaders argue that Ethereum must adapt by streamlining its upgrade cycle without compromising decentralization and security.

The upcoming Pectra and Fusaka upgrades will serve as key test cases for whether Ethereum can strike the right balance between innovation speed and protocol stability. If successful, this shift could set a new precedent for how Ethereum core devs manage and deploy future upgrades, making the network more agile and responsive to the evolving blockchain landscape.