The Treasury Department has up Sanctions against tornado cash, smart contracts based on Ethereum, after a series of legal losses and administrative challenges.
“According to the review of the administration of the new legal and policy issues raised by the use of financial sanctions against the financial and commercial activity that occur within evolving technology and legal environments, we have exercised our discretion to eliminate economic sanctions against Tornado’s cash as reflected in the presentation of Treasury Monday in Van Loon V. fixed.
Quick general description of the history of tornado in cash
Tornado Cash launched in 2019 as a decentralized protocol to improve the privacy of transaction in Ethereum.
In August 2022, the mixer was added to the List of the Office of Foreign Assets Control (OFAC), which includes individuals and sanctioned entities. The United States Police claimed that Tornado’s cash facilitated $ 7 billion In money laundering, including funds linked to the Lázaro Group of North Korea.
This led to a prohibition that American people use the service and legal action against their co -founders, Roman Storm and Roman Senovwhich were accused in 2023 for money laundering linked to more than $ 1 billion in transactions.
Six cash users in cash, backed by coinbaseHe sued the treasure, challenging the sanctions.
TO Federal Court of Texas ruled in January 2025 that smart contracts could not be sanctioned, a decision confirmed by the Fifth circuit in November 2024.
Today The treasure officially lifted the sanctionsciting evolving legal and technological considerations, although he expressed concern about continuous illegal cryptographic activities and reinforced his intention and authority to continue with RPDC sanctions.
The tension continues
However, the treasure reinforced its intention to enforce the sanctions against the Democratic Popular Republic of Korea (DPRK), a continuous source of geopolitical tension given the recent Hack of $ 1 billion by Bybit argued to have been executed by Lazarous, a piracy group with DRKP links.
“We remain deeply concerned about the important campaign of piracy and money laundering sponsored by the State aimed at stealing, acquiring and deploying digital assets for the Democratic Popular Republic of Korea (RPDC) and the Kim regime,” the agency said.
“The treasure will continue to closely monitor any transaction that can benefit the malicious cyber actors or the RPDC, and American people should have caution before participating in transactions that present such risks.”
Although the raised sanction seems to be good news for financial privacy software developers, it is too early to know what this means for the Bitcoin and Crypto industry in general, or if it will have an effect on the next judicial cases such as those against Samurai wallet developers.
“Digital assets have enormous opportunities for innovation and value creation for the American people,” Treasury Secretary Scott Besent said. “Ensuring the digital asset industry of North Korea abuse and other illicit actors is essential to establish the leadership of the United States and ensure that the US people can benefit from innovation and financial inclusion.”
