By design, everything is public on the blockchain, which can deprive users from their right to privacy. Anyone can have view everyone elses entire financial history. The right of privacy lies in the ability to have control over the information we provide and to whom we provide it.
To this extent, **the compliance tool enables users to prove the origin of their funds through selective disclourse.** Each note translates to a unique deposit, **this tool will issue a cryptographic proof of a deposit** allowing a third party to authethicate one's transactional profile.
With each deposit made through the application, a new note is generated by the protocol. This note is necessary to withdraw the deposited assets later on any withdrawal address. It is this same note that, if needed, allow users to generate a compliance Report to prove the origin of their assets.
If the note wasn't spent yet (i.e. assets have still not been withdrawn), the compliance tool will only provide you with information about the deposit:
If the note was spent (i.e. assets were withdrawn to a given address using the note), the compliance tool will complete the information above by adding:
The nullifier hash is a public input that is sent on-chain to get checked with the smart contract and authenthicate the presence of the note's secret in the Merkle tree for the withdrawal.
Therefore, the tool allows users to re-link source and destination addresses in order to prove transaction history for assets transacted through Tornado Cash. The compliance report can be downloaded as a PDF format for accessible disclosure.
