Treasury’s Tornado Cash Sanctions Have Companies Stepping Back From Users

The Treasury Department alleges North Korea-backed hacking organization Lazarus Group used Tornado Cash to launder more than $455 million in stolen crypto


Source: DALL·E


key takeaways

  • The US Treasury Department sanctioned Tornado Cash and related wallets Monday, prompting some companies to suspend accounts and freeze assets
  • Roman Semenov, one of the three founders of Tornado Cash, said his GitHub account was suspended

In the hours after the US Treasury imposed its first-ever sanction against an on-chain decentralized finance protocol, Tornado Cash users and supporters took to Twitter to vent their frustrations. 

The Office of Foreign Asset Control added Tornado Cash and 45 related Ethereum wallet addresses to the Specially Designated Nationals (SDN) list, meaning their “assets are blocked and U.S. persons are generally prohibited from dealing with them,” according to the Treasury

Read more: Coin Mixers and Privacy Coins: Can They Resist Censorship?

The Treasury alleges North Korean-backed hacker collective Lazarus Group, which in May allegedly stole $625 million from Ethereum-linked sidechain Ronin Network, used Tornado Cash to launder more than $455 million in stolen crypto.

Tornado Cash repositories were removed from GitHub, an internet hosting service and grant provider for software development, following the sanction announcement, according to the now-deactivated webpage.

“My GitHub account was just suspended,” Roman Semenov, one of the three founders of Tornado Cash, tweeted Monday. “Is writing an open source code illegal now?” 

In what would appear to be the first time a pool has been frozen — as opposed to an individual account — Circle has also frozen 75,000 USD Coin stablecoins belonging to Tornado Cash users, according to one Twitter account.

Crypto advocacy group Coin Center criticized the Treasury’s move to sanction Tornado Cash, saying it is just a technology that could be used by good or bad actors, in a statement

“How is adding to the SDN list different from past OFAC actions?” the statement added. “A smart contract is a robot, not a person.”

Although the circumstances are different, it’s not the first time the crypto industry has dealt with fast-moving US sanctions. 

In February, following Russia’s invasion of Ukraine, sweeping sanctions against Russian entities prompted many crypto exchanges to consider blocking Russian users to comply with US sanctions laws. Exchanges Binance and Coinbase later blocked accounts associated with sanctioned Russian individuals and companies, a move that may have disappointed some digital asset enthusiasts but did not surprise legal experts. 

Sanctions laws are clear, Yankun Guo, partner at law firm Ice Miller, told Blockworks at the time.

“A US company using crypto to sidestep sanctions with Russia will be in violation of US laws. It is as simple as that,” Guo said.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg


In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.


Crypto markets overall haven’t yet tested all-time highs, but MetaMask is well on its way to record numbers of active users



Season 6 boasts a prize pool of up to $650,000, featuring $500,000 in TRX for regular prizes and $150,000 in energy prizes


Solana’s token extensions enables developers to build complex token interactions

It seems we’ve just traded scam accounts that pretend to be Musk for scam accounts that act like crypto industry leaders


Whether intentional or not, it’s clear that some newly proposed legislation could crush any incentive for the free market to create new crypto advancements


A proposal to allow venture firms to own cryptoassets, first put forward last year, moves closer to law