After the US Treasury Department’s Tornado Cash sanction, the eyes were turned to potential sanctions.
The US Treasury Department’s Sanction of Tornado Cash has caused some of the leading names in the crypto industry to worry.
What’s Next After the Tornado Cash Enforcement?
Since Tornado Cash was founded in 2019, more than $7 billion has been allegedly laundered with the help of the protocol. This includes $455 million in funding from hacking group Lazarus Group, backed by the North Korean government.
David Carlise, one of the executives of crypto-asset compliance firm Elliptic, used the following statements on the subject:
“The US will absolutely not tolerate the pretext that crypto mixers are completely neutral services.
If mixers are facilitating activities for ill-wishers, in OFAC’s view the sanctions are perfectly fair. It’s that simple”
Carlisle emphasized that many cryptocurrency exchanges will be exposed to Tornado Cash activities and therefore should be vigilant to avoid processing such prohibited transactions.
Constitutional Concerns Rising
Coin Center, which is the political advocacy of blockchain technology, has expressed its constitutional concerns regarding the Tornado Cash sanction.
“OFAC’s move raises constitutional concerns. Because this is not a ban on the ability of a non-US citizen to use this system. A ban on all Americans empowered to use a particular open source software tool”
The company stressed that it has concerns about how U.S. regulators will enforce these sanctions. Due to the nature of the blockchain, anyone can send money to a US citizen using Tornado Cash, and there is no chance of that sending being cancelled.
After the news of the sanctions, many criticisms came one after another. “I don’t know if you can approve a piece of code, so I’m starting to catch up like everyone else,” said Andrew Thurman of Nansen.
Strong Criticism Following Tornado Cash Sanction
There was also harsher criticism following the sanctions. Hudson Jameson of Zcash said:
“Those who create privacy solutions at Ethereum can have a big impact. Because government and regulators are notorious for lagging behind and failing to grasp technological innovations. Confidentiality is of the utmost importance and therefore a government cannot trace metadata because it cannot identify Tornado Cash’s code and unfairly accuse it of activities related to North Korea.”
