🟪 The war on mixers?

_{Brought to you by:}

Presidential working groups. SEC court retreats. A bitcoin strategic reserve.

The above are, I think, among the biggest crypto victories following President Donald Trump’s entry into office; ones scored after the industry threw its political — and financial — support behind the president’s campaign last year.

The announcement from the Treasury Department’s Office of Foreign Assets Control today is distinctly meaningful and, perhaps, more consequential in the context of American crypto regulation.

The US government sanctioned Tornado Cash in 2022 as part of a broader, international campaign against so-called transaction mixers, or tools that allow users to obfuscate the source of cryptocurrency transactions. At the time, officials alleged that North Korean-backed hackers used Tornado Cash to launder stolen funds.

The sanctions — and subsequent court cases against Tornado Cash’s creators — sparked a major clash between the federal government and critics who said that OFAC was wrong to target software, especially a non-custodial crypto tool like Tornado Cash — and those who write it.

Last year, OFAC’s sanctions were ruled unlawful by a panel of US judges, paving the way for today’s announcement. 

Targeting the tools used by would-be money launderers was a major governmental priority on the crypto front. Today’s news, and the court actions proceeding it, indicate that the war on transaction mixers is entering a new, and perhaps terminal phase, with enforcement shifting away from those who offer transaction mixers to the public. 

Still, the founders of Tornado Cash remain under indictment, and it remains to be seen if the OFAC action will have an impact. 

"Although Treasury's decision sets crucial precedent, the SDNY prosecutors still haven't dropped their case against me," Tornado Cash developer Roman Storm said on X Friday. "So while we have won a big battle, the war is far from over. I look forward to the community’s continued support as I head to trial and my legal team seeks a dismissal from the judge or acquittal by the jury."

I expect the campaign to quash the US government’s war against Tornado Cash to continue — and today’s events are cause to believe that supporters will be successful.

Now, onto the roundup:

— Michael McSweeney

Brought to you by:

DTCC ComposerX™ is the complete solution for financial institutions, providing an end-to-end platform for managing digital assets throughout their lifecycle, from issuance through distribution, servicing, and reporting.

Designed for financial institutions to bridge traditional and digital infrastructure, ComposerX addresses every aspect of the digital asset lifecycle while embodying the security, stability, and scalability that define the DTCC brand.

Discover how ComposerX can unleash your firm's potential.

NO SLEEP TILL BROOKLYN

Permissionless IV is where you stress-test your vision. This conference is for the engineers, founders, and devs building the next cycle’s backbone. If you’re scaling infra, rewriting DeFi, or experimenting with new primitives, join us.

Speaker applications? Open.

Hackathon devs? Your ticket is covered.