US Treasury Sanctions Crypto Mixing Service Tornado Cash

In its first on-chain DeFi protocol sanction, the US Treasury Department added Tornado Cash to its blocked list

article-image

Source: DALL·E

share

key takeaways

  • Tornado cash is now on the Treasury’s list of services US individuals cannot use
  • The sanctions come as money moved via crypto mixing services increased in 2022

In its first on-chain decentralized finance protocol sanction, the US Treasury Department added decentralized cryptocurrency mixing service Tornado Cash to its blocked list, according to documents released Monday. 

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

US Secretary of State Anthony Blinken initially mistakenly identified Tornado Cash as “a U.S.-sanctioned, DPRK state-sponsored hacking group, used by the DPRK to launder money,” in a subsequently-deleted tweet. 

Secretary Blinken later clarified that Tornado Cash was merely used by a North Korean hacking group to launder money. 

Loading Tweet..

The sanctions come as 2022 has seen an uptick in the use of crypto mixing services, which allow users to conceal the transaction history of certain cryptocurrencies by pooling and mixing them together with other users’ funds. 

The 30-day moving average of value received by mixers reached an all-time high of nearly $52 million worth of crypto on April 19, according to a report by Chainalysis published in July. This is roughly double the volumes seen at the same time in 2021.

Mixers have also come under increased scrutiny as concerns about sanctioned Russian entities using crypto to circumvent the rules mounts. 

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

This is a developing story.

Updated Aug. 8, 2022, 12:50 pm ET.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

4.png

Research

This months PPGC covered four main areas. Firstly, debriefing the progress and status of the mainnet implementation of the Ahmedabad hard fork. Secondly, a retrospective on the testnet phase of the Ahemdabad Hard Fork. Thirdly, an update on PIP-36 which involves replaying failed state syncs. Lastly, PIP-47 which pushes upgrades to the Polygon Protocol Council.

article-image

Gurbir Grewal, who has been at the agency almost as long as Gensler has been chair, will depart on Oct. 11, 2024

article-image

The stablecoin’s supply has declined about 50% in the last month, from $660 million to $320 million

article-image

Plus, Sky’s soaring stablecoin and simpler bitcoin staking

article-image

Bitwise took the initial steps for an XRP ETF Wednesday

article-image

Plus, enrollment for the Donald Trump-backed crypto project is underway