US Treasury Department withdraws sanctions on Tornado Cash
On Friday, the U.S. Treasury Department’s sanctions watchdog lifted sanctions on Tornado Cash, a cryptocurrency mixer that was previously blacklisted for allegedly helping North Korea’s Lazarus Group launder money from hacks and thefts.
The decision comes after a federal appeals court ruled last November that OFAC could not sanction Tornado Cash’s smart contracts because they did not constitute “property” of any foreign national.
Tornado Cash is Free, But Its Developer Is Still In Prison
According to a recent press release , the U.S. Treasury has reversed its previous decision by removing Ethereum coin mixing service Tornado Cash from the Office of Foreign Assets Control (OFAC) list of sanctioned entities. The decision comes after Tornado Cash was initially blacklisted in 2022.
The tool has been subject to multiple sanctions from OFAC, prohibiting US entities and individuals from financially interacting with it.
“We remain deeply concerned about state-sponsored hacking and money laundering campaigns aimed at stealing, acquiring, and deploying digital assets for the Democratic People’s Republic of Korea (DPRK) and the Kim regime,” the press release said.
The decision comes after a November 26, 2024, ruling by the United States Court of Appeals for the Fifth Circuit. The court found that OFAC exceeded its authority when it sanctioned Tornado Cash’s smart contracts, which the court ruled did not qualify as “property” under U.S. law.
While Tornado Cash is no longer sanctioned, the developer associated with it, known as Semenov, remains sanctioned. However, his sanctions have been adjusted to remove the cyber-related charges, although his ties to North Korea still keep him on the sanctions list.
Additionally, Roman Storm, co-founder of Tornado Cash, is set to appear in court this July. He is accused of developing the smart contracts and protocol for the service. Meanwhile, another developer involved has also been charged but has not yet been arrested.
Following this announcement, the value of the Tornado Cash cryptocurrency skyrocketed, recording a 54% increase in the past 24 hours.