In the 1970s and ’80s, cryptography was largely confined to governments, militaries, and intelligence organizations - until Whitfield Diffie came up with public-key encryption, making cryptography accessible to the broader world (“... computerization is robbing individuals of the ability to monitor and control the ways information about them is used.”).
Building off the novel work of computer scientist Ralph Merkle, the duo of Richard Diffie and Martin Hellman had devised a way to achieve what was, once again, considered theoretically impossible. The method was outlined in their paper, New Directions in Cryptography, which WIRED would later describe as “a cypherpunk sacred text.”
That foundational shift planted seeds for a grassroots movement of privacy advocates who believed individuals (not states) should control encryption. Public-key cryptography would go on to be a cornerstone of the modern internet, protecting emails, bank accounts, website interactions, many other online matters, and, of course, everyone’s bitcoin.
By 1992, pioneers like Tim May, Eric Hughes, John Gilmore, and Jude Milhon had formed the Cypherpunks mailing list (which amassed 700+ subscribers by the mid-90s). The group used a system of distributed nodes to ensure the mainline list’s resilience, years before Bitcoin implements similar principals to its network.
Their monthly meetings in the San Francisco Bay Area is where they refined a shared vision crystallized in Eric Hughes' 1993 publication, "A Cypherpunk's Manifesto." The document emphasized the indispensability of privacy in the digital age, challenging the assumption that governments or large organizations would willingly grant it.
These cypherpunks weren’t armchair philosophers; they built tools, including anonymous remailers, PGP email encryption, early VPN, and other early projects (DigiCash, B-Money, Bit Gold, and Hashcash), which may not have achieved widespread success independently but collectively provided essential building blocks for Bitcoin’s creation.
Phil Zimmermann’s email encryption, ‘Pretty Good Privacy’ (PGP) and the Mixmaster remailer were literal embodiments of their ethos. Phil wrote: “The government knows what a pivotal role cryptography is destined to play in the power relationship with its people”.
The U.S. government attempted to restrict PGP as illegal “munitions,”. Two years later Zimmermann published the PGP source code and released a hardback book by MIT press. Exporting books is a First Amendment right that should trump any restrictions on the exportation of cryptographic software. The investigation was eventually closed and the Feds brought no charges. The community rallied and won, marking a landmark victory for digital civil liberties.
Fast-forward to 2009: the release of the Bitcoin white paper by “Satoshi Nakamoto” reflected very clearly the cypherpunk worldview. It proposed decentralized, permissionless digital cash that could operate without banks or surveillance. People like Hal Finney, first Bitcoin transaction recipient, were deeply embedded in cypherpunk circles, having already experimented with proof-of-work systems and anonymous remailers.
In both technical design and ethos, Bitcoin was a natural extension of cypherpunk principles: transparent yet pseudonymous, resistant to censorship, and built on open‑source code. It carried forward the belief that code itself is speech and technology can empower individual autonomy. In fact, the parallels go so deep, that one could easily sub Bitcoin-related terms into any number of sentences describing the fight for accessible cryptography:
“Diffie recognized that the solution rested in a decentralized system in which each person held the literal key to his or her own privacy financial sovereignty.”
“In the Cypherpunk mind, cryptography money is too important to leave to governments or even well-meaning companies.”
“You can have my encryption algorithm… bitcoins, when you pry my cold dead fingers from my private key.”
Despite Bitcoin's pseudonymity, all transactions are visible on‑chain. That transparency is by design… but it diverged from early dreams of full anonymity.
On February 20, 2024, Binance delisted Monero (XMR), citing that it no longer met the exchange’s listing standards - especially under tightening regulatory compliance requirements tied to privacy coins, which make illicit‑transaction monitoring difficult. This move was soon followed by Kraken, OKX, Gate, Upbit (South Korea), and Coincheck (Japan), all citing inability to comply with FATF-style AML/CFT rules, notably due to anonymous-based withdrawal/deposit features.
This decision followed earlier, region‑specific actions: Binance had removed XMR, ZEC, and Horizen (ZEN) from its platforms in countries such as France, Italy, Poland, Spain, and later Belgium in 2023, due to local regulatory laws requiring monitoring capabilities. It described being “obliged” to delist coins whose privacy features impair traceability.
In total, around 60 listings of privacy coins were removed across major exchanges in 2024, marking the highest rate seen since 2021. In short, there is a war going on between those who would liberate crypto and those who would suppress it.
Monero remains untraceable by default, built upon ring signatures, stealth addresses, and RingCT (confidential transactions) protocols. Still, law enforcement has funded research to deanonymize Monero transactions, reflecting its illicit-use appeal. A 2022 Dutch‑Italian study concluded: “For now, Monero is untraceable. However, it is probably only a matter of time and effort before it changes” (Wikipedia).
In March 2025, Chainalysis observed that darknet marketplaces had shifted back to Bitcoin as Monero liquidity and accessibility dropped significantly following delistings by Binance and Kraken, even though Monero had long been the privacy coin of choice among illicit actors.
A concrete example: In early 2022, hackers affiliated with North Korea’s Lazarus Group stole approximately $620 million via the Ronin (Axie Infinity) bridge hack. They laundered the stolen funds through the Tornado Cash mixer to obscure the trail. Despite the intent to obfuscate transfers, U.S. sanctions later froze Tornado Cash and blacklisted it, making it illegal, and investigators could trace portions of the funds, turning a privacy tool into a forensic window.
Last month saw one of the three founders standing trial in New York. He faces charges including conspiracy to commit money laundering, sanctions violations, and operating an unlicensed money-transmitting business, with possible decades of prison time. His trial began in July 2025 (last month).
Having authored open‑source code, he did not control how users applied the system. His case is seen by many privacy advocates as a major test of whether developers can be held criminally liable for user actions in open‑source software.
The Cypherpunk movement, with its persistent advocacy for privacy and decentralization and defining features of encryption, anonymity, and code as resistance, laid the ideological groundwork for and influenced the creation of Bitcoin. Yet over time, the drive for regulation, institutional legitimacy, consumer protection, and AML/KYC compliance pushed privacy to the margins.
Privacy in crypto is now often seen as a liability, not a primary value, especially for exchanges seeking institutional capital. Privacy coins get treated with skepticism, delisted from platforms, and sometimes even converted without user choice. Still, for true believers, privacy tech continues: zero-knowledge rollups, Zcash shielded pools, emerging sidechains, and privacy-enhancing layer‑two work all carry forward the original spirit.
The broader digital world is circling back to many cypherpunk concerns: mass data harvesting, surveillance capitalism, and algorithmic profiling. Messaging platforms like Signal now integrate strong encryption by default, an outcome rooted in cypherpunk advocacy.
While most of us think we are being smart by using crypto for ownership, are we really just surrendering ourselves to the lack of privacy that persists in crypto today? Are we freely giving away our information while we focus on the newest, fastest, shiniest tech that is released?
Within crypto, the debate continues: can hybrid models combining on-chain transparency with off-chain privacy regain legitimacy? Will regulation and privacy ever peacefully coexist, or will privacy remain sidelined as a niche?
💬 Do you think crypto can ever reclaim its privacy roots? Let’s hear it!
— Riverstone Team
Get in touch: riverstone.one | Follow us on X: @Riverstone_one
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