On March 21, the U.S. Department of the Treasury lifted sanctions against the cryptocurrency mixer Tornado Cash.
Tornado Cash is a privacy-intensive crypto mixer built on the Ethereum network that allows users to encrypt their crypto transactions. It obscures traceability of assets on ledgers by pooling cryptocurrencies from multiple sources prior to a user's withdrawal of their tokens.
In August 2022, the Office of Foreign Assets Control (OFAC) sanctioned the crypto mixer, alleging that North Korea’s notorious Lazarus Group had leveraged the service to launder stolen crypto assets worth $455 million. The mixer facilitated laundering of crypto assets worth over $7 billion, the OFAC claimed.
In September 2023, the largest crypto exchange in the U.S., Coinbase, began funding a lawsuit against the Treasury for allegedly overstepping its authority in its action against the crypto mixer.
In Nov. 20, 2024, a federal appeals court ruled that the Treasury had indeed overstepped when it sanctioned Tornado Cash. Smart contract-based services do not inherently violate laws, the court ruled.
In its latest decision, the Treasury said that since it has dropped Tornado Cash from its sanctions list, the case against it should be considered “moot.”
“Digital assets present enormous opportunities for innovation and value creation for the American people,” said Treasury Secretary Scott Bessent. “Securing the digital asset industry from abuse by North Korea and other illicit actors is essential to establishing U.S. leadership and ensuring that the American people can benefit from financial innovation and inclusion.”
The TORN token jumped nearly twice its value to $15.26 following the announcement. The token was trading at $11.82 at press time.