zkMixer: A Configurable Zero-Knowledge Mixer with Anti-Money Laundering Consensus Protocols

Abstract: We introduce a zero-knowledge cryptocurrency mixer framework that allows groups of users to set up a mixing pool with configurable governance conditions, configurable deposit delays, and the ability to refund or confiscate deposits if it is suspected that funds originate from crime. Using a consensus process, group participants can monitor inputs to the mixer and determine whether the inputs satisfy the mixer conditions. If a deposit is accepted by the group, it will enter the mixer and become untraceable. If it is not accepted, the verifiers can freeze the deposit and collectively vote to either refund the deposit back to the user, or confiscate the deposit and send it to a different user. This behaviour can be used to examine deposits, determine if they originate from a legitimate source, and if not, return deposits to victims of crime.