US Treasury Lifts Tornado Cash Restrictions After Policy Review
Date: 2025-03-24 Author: Gabriel Deangelo Categories: BUSINESS
The US Treasury Department has removed Tornado Cash from the list of Specially Designated Nationals (SDN), which previously included organizations and individuals with whom American citizens and companies were prohibited from having financial relations. Along with the service's name, more than a hundred smart contracts on the Ethereum blockchain associated with Tornado Cash were removed from the list. This decision effectively allows American legal entities and individuals to interact with the platform again without the risk of violating sanctions laws.
Sanctions against Tornado Cash were initially imposed in August 2022 by the Office of Foreign Assets Control (OFAC). At that time, US authorities accused the platform of being used to launder more than $7 billion in cryptocurrency since its launch in 2019. Of this amount, about $455 million, according to the authorities, is related to the activities of the North Korean hacker group Lazarus Group. After the restrictions were imposed, American tax residents were prohibited from using the service, and the site and the funds stored on it were frozen.
The Tornado Cash case subsequently caused a significant public outcry, especially among representatives of the crypto industry and supporters of digital freedom. They criticized OFAC's approach, arguing that sanctions were imposed not on specific individuals, but on open-source software, which created a dangerous precedent.
Earlier, an appeals court overturned a decision of a federal court in Texas that upheld OFAC's right to impose sanctions on Tornado Cash. The court ruled that the agency had exceeded its authority, since the object of restrictions was not an individual or legal entity, but a decentralized platform.
Now, after Tornado Cash was officially removed from the sanctions list, interactions with the platform are no longer subject to restrictions. However, experts note that the situation with crypto mixers remains under close scrutiny by the authorities, and new attempts to regulate such instruments are possible in the future.
