Nocturne Labs, an Ethereum-native privacy protocol with backing from notable figures in the cryptocurrency community, including Vitalik Buterin, co-founder of Ethereum, has announced the closure of its operations. The startup had initially aimed to provide private Ethereum accounts and transactions. Despite securing $6 million in a seed fundraising round in October 2023, led by Polychain Capital and Bain Capital Crypto, the firm did not provide a reason for its shutdown.
Customers will still be able to access the Nocturne front end until June 30th to process withdrawals. The total value locked (TVL) for Nocturne has decreased significantly since the announcement of its termination, dropping from over $455,000 to over $129,000, according to DefiLlama statistics.
The scrutiny on privacy-focused initiatives in the cryptocurrency space has increased since the US government banned the crypto mixing protocol Tornado Cash in August 2022. Despite this, Vitalik Buterin remains a vocal advocate for transactions that prioritize user privacy. There is a shifting discourse within the crypto community regarding privacy on the Ethereum blockchain, with debates on whether Ethereum should provide transaction privacy by default, similar to the Transmission Control Protocol (TCP).
Buterin suggests delegating encryption responsibilities to higher levels within the Ethereum protocol, much like TCP does with encryption. This approach would maintain a strong foundation layer while enhancing privacy for users. Amidst these discussions, Nigeria is standing firm on the prosecution of a Binance executive, despite criticisms from the US.