Torn by US Sanctions, Tornado Cash Token Tumbles
Tornado Cash’s native token TORN lost 96.9% of its value since its all-time high in February 2021, and at least one developer is now in legal jeopardy
Source: Shutterstock
key takeaways
- Alexey Pertsev was arrested by the Netherland’s Fiscal Information and Investigation Service for suspected involvement with money laundering
- Tornado Cash DAO has voted to include Tornado DAO governance to its treasury’s multi-signatory wallet
Tornado Cash’s native token TORN has dropped by 22% in the past 24 hours, according to CoinGecko. At the time of writing, the token has lost 96.9% of its value since its all-time high on Feb. 13, 2021.
By contrast, popular tokens such as ether and bitcoin have only dropped 0.9% and 3.2% in value, respectively, in the past 24 hours.
The US Treasury on Monday sanctioned the cryptocurrency mixer — which allows users to make financial surveillance harder by commingling cryptoassets from multiple sources before transferring them — for facilitating money laundering by a DPRK state-sponsored cyber hacking group.
In response to the sanctions, Tornado Cash DAO has hastily voted in favor of adding the DAO governance to its treasury’s multi-signatory (multisig) wallet, which oversees a combined $21.6 million.
The proposal‘s voting period, which opened Wednesday, ended today with 100% approval from 12 participants who contributed 51,000 TORN tokens. Now, to access the treasury, four out of six signatories must approve the access, instead of the previous four-out-of-five approval.
The decision to extend multisig participants to the DAO’s treasury is likely to ensure wallet access is still possible, even if members of the multisig are arrested by law enforcement — a growing risk after the Netherland’s Fiscal Information and Investigation Service (FIOD) arrested 29-year-old Alexey Pertsev for suspected involvement with money laundering.
“Multiple arrests are not ruled out,” Dutch investigators said in a statement.
Access to Tornado Cash has also been restricted since the sanctions were announced. Users are no longer able to connect to the project’s Discord channel, and its governance forums and Github pages have likewise been censored.
Centralized cryptocurrency application programming interface (API) and node infrastructure providers Infura and Alchemy have also blacklisted Tornado Cash’s front end, making it trickier for users to access the service.
The protocol’s smart contracts are immutable and will continue to function as long as Ethereum exists, but more technical knowledge is needed to seek out alternative front-end user interfaces or interact with the smart contracts directly.
Tornado Cash is not the first privacy tool to have been sanctioned. The US Treasury levied sanctions against cryptoasset mixer Blender in May after it was accused of facilitating the laundering of $20.5 million stolen in the Ronin Bridge hack.
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