“Before you publish anything, I will need these quotes to be vetted by my legal counsel,” Dr. Anish Mohammed said before I pressed the button on my recorder. 

He’d chosen to meet me in an Indian restaurant at Dubai's Financial District, where they offer his favorite Karak tea. 

Aside from the seemingly aggressive cautious disclaimer, he is extremely open and speaks his mind about his many passions, ranging from open-source drones to cryptography. 

His request was not surprising nor unreasonable, given the circumstances. He is the co-founder of the Panther Protocol, an “end-to-end solution that restores privacy in Web3 and DeFi, while providing financial institutions with a clear path to compliantly participate in decentralized finance,” according to its web site. 

In short, a crypto mixer. Only weeks after another crypto mixer, Tornado Cash, was sanctioned by the U.S. Treasury Department for allegedly aiding money launderers, Mohammed has good reason to be cautious.

The U.S. came after Tornado Cash because like all mixers it makes transactions untraceable. They pool large sums of cryptocurrencies from users and allow anonymous users with a unique key to withdraw funds at their discretion. That shields transactions on a public blockchain that are visible to all. While anyone can trace that a specific wallet sent a set amount of cryptocurrencies to another wallet and know precisely when it happened, when a mixer is involved that becomes much more difficult. 

Last May, the United States Treasury issued a sanction on Blender, a bitcoin mixer. In August, it did the same with Tornado Cash, the largest Ethereum mixer. The controversial decision accused Tornado Cash of assisting the North Korean state-sponsored hacking group Lazarus Group of laundering more than $455 million.  

To make matters worse, Dutch authorities arrested Alexey Pertsev, a developer they accused of helping the Tornado Cash protocol, causing outrage among many privacy proponents and worries among those building privacy tools. 

“I'm talking to lawyers and trying to understand what's my best way forward,” Mohammed said. “All privacy protocols are doing the same.”

From Medicine to Crypto

When he was 10 years old, Mohammed came across a puzzle by Martin Gardner, an American writer well-known for creating entertaining and challenging mathematical and logical problems. He could not solve the puzzle, but he became fascinated with cryptography.

“So, I taught myself mathematics and I became a programmer by 14,” he said. Mohammed speaks with a matter-of-fact tone that comes across as sincere.  

“Obviously, as a kid, you start understanding security,” he said with a smirk. 

I had to ask, “Did you hack anything?” 

“I can't comment,” he said, and the smirk turned into a loud laugh. 

“Being a security expert with a medical degree didn’t help. Everybody looks at you and says, ‘what the fuck do you know?’”

When it was time for college, Mohammed couldn't convince his family to allow him to follow his passion for computers. He abided by their wishes and graduated as a medical doctor, “the obvious choice for an Indian student from a middle-class family,” he said. 

Mohammed said he learned valuable lessons in his medical training, such as learning about human biases that may lead to incorrect conclusions and applying Bayesian reasoning in diagnosing problems. Aside from that, “it was incredibly clear to me that I didn’t want to do medicine,” he said. 

Through grinding and networking, Mohammed got a job in cybersecurity and anomaly detection at ERNET, India’s National Research and Education Network, then a job creating a micropayment system at Ericsson in Sweden.

“I became interested in learning about money and the infrastructure that transfers it,” he said. Yet, his background was not very convincing to many recruiters and higher-ups in the field. 

“Being a security expert with a medical degree didn’t help,” he said. “Everybody looks at you and says, ‘what the fuck do you know?’”

Mohammed returned to school to earn a Ph.D. in Information Security from Royal Holloway, the University of London. With his experience and a higher degree, Mohammed ventured into cryptography, working in security for corporations such as Accenture, Lloyds Bank and HSBC. 

Cryptography and Ripple

In 2013, Mohammed landed a side job as an advisor for Ripple and became more intrigued by blockchains and cryptocurrency. 

“Years ago, I was on a mailing list for people interested in cryptography and learned very early about Bitcoin,” he said. He read the Bitcoin white paper and was impressed by its implications and its unique solution to eliminate double-spending. But he thought it wouldn't generate much interest or get enough adoption. 

“That was my mistake,” he said. 

He was set not to repeat it. By his recollection, Mohammed worked on a dozen layer-one blockchains and 20 decentralized protocols.  In 2020, he decided to build the Panther Protocol. 

Praising Privacy 

“Given what has happened with Cambridge Analytica and things like that, we know for a fact that we are now in a world of surveillance capitalism,” he said, referring to the defunct consulting company that leveraged Facebook data to help Donald Trump win the 2016 U.S. presidential election. 

“If your economic activity is also known, the thing called democracy completely collapses in every way, shape, or form,” he said. 

Mohammed warns against a not-far-fetched scenario where insurance companies can spy on people’s buying habits and track every transaction. Then, they couple it with their medical data, gain intimate knowledge of their lives, and punish them by raising their premiums or denying them health care. 

In blockchain markets, surveillance could be easier since all transactions are public. Mohammed added that lack of privacy also harms market integrity since traders can copy smart investors’ moves and experiments the second they are deployed. The visibility of blockchain deprives investors of their alpha and eliminates their chances of beating the market. 

His proposed solution is Panther Protocol, which he defined as a dark pool for decentralized finance that supports Know Your Customer and Anti-Money-Laundering regulations. 

“This way you can make your cake, and eat it too,” he said. 

Panther employs a variety of mechanisms, such as detecting anomalies and selective disclosures find bad actors and abusers. It relies on third-party KYC providers. This way, it preserves its users’ anonymity while maintaining compliance with the law. Moreover, Panther only enables transactions between users and defi protocols, unlike Tornado Cash, which could be used for any purpose.  

Panther Protocol raised $32 million investors since its inception, and Mohammed thought the project was making promising progress. 

Shades of gray

“We were very close to releasing the protocol,” he told me. “We already released part of it that allowed voting in the DAO, but we temporarily stopped in light of what happened (with Tornado).”

Mohammed believes outlawing the entirety of Tornado Cash protocol and criminalizing any interaction with its code has negative implications beyond the cryptocurrency ecosystem.

“Life is not a boolean, a black or a white; there are shades of gray,” he said. “Within these shades of regulated and non-regulated spaces, two people try to take advantage of the situation, enterprise on the one hand and criminals on the other.”

Banning mixers without a distinction between the two is a dangerous heavy-handed approach in his opinion.  For example, some of the most used tools in building blockchains, like Infura, depend on  centralized services such as Amazon Web Service. A traditional web2 company may be implicated, without its knowledge, in money laundering charges or aiding terrorism. 

Once Tornado Cash was criminalized, anonymous activists tried to showcase the absurdity of the decision through a “dusting” campaign. They sent very small amounts of money, 0.1 Eth, from Tornado Cash to crypto wallets of known users. Once the wallet receives the tainted crypto, it could theoretically be sanctioned by the US government and denied service by centralized exchanges in compliance with the law. 

The campaign highlighted how the decision enforces a collective punishment on users, many of them who are not criminals. Mohammed pointed out that the decision also harms the most vulnerable. 

“If you are a rich white man, you won't have a problem (with dusting),” he said, “but if you are a brown-skinned man and your surname is Mohammed, you are fucked.”

For now, Mohammed and others in the privacy space are watching how the situation unfolds and whether anyone will be prosecuted for involvement with Tornado Cash. 

“We don’t want to put our investors or customers in danger,” Mohammed said. The entire situation has him feeling pessimistic about the future of not just crypto and privacy but much larger issues. 

“I see the collapse of privacy, democracy, and personal freedom,” he said with a sigh.