US Removes Tornado Cash Mixer from Sanctions List
The United States Treasury Department announced on March 21 that it has removed cryptocurrency mixer Tornado Cash from its sanctions list. This decision follows a January ruling by a US appeals court, which determined that Tornado Cash’s smart contracts could not be sanctioned as they are not the property of any foreign national or entity.
Court Ruling Leads to Removal
In January, the US appeals court stated that Tornado Cash’s immutable smart contracts—privacy-enabling software code—do not qualify as property belonging to foreign nationals. Consequently, the Treasury’s Office of Foreign Assets Control (OFAC) was found to have exceeded its authority by sanctioning these contracts.
Following this ruling, OFAC removed several dozen Ethereum blockchain addresses associated with Tornado Cash from its sanctions list.
Market Reaction
The news significantly impacted Tornado Cash’s native token, TORN, which surged approximately 60% following the announcement. According to CoinMarketCap data, TORN currently has:
- A market capitalization of around $73 million
- A fully diluted valuation (FDV) of nearly $140 million
Background: Money Laundering Allegations
Tornado Cash was initially sanctioned by OFAC in August 2022 due to allegations that it facilitated money laundering activities, notably involving North Korea’s Lazarus Group. The Treasury claimed Tornado Cash had enabled laundering of over $7 billion in illicit funds since its launch in 2019.
In 2024, Tornado Cash developer Alexey Pertsev was sentenced to 64 months in prison by a Dutch court for money laundering charges. Pertsev was later released on house arrest in February 2025, pending an appeal. The Ethereum Foundation has pledged $1.25 million toward Pertsev’s legal defense, emphasizing that “privacy is normal, and writing code is not a crime.”
Quick Summary
- US Treasury removes Tornado Cash from sanctions list following court ruling.
- TORN token price jumps 60% after the announcement.
- Original sanctions were due to alleged money laundering involving North Korean hackers.
- Ethereum Foundation supports Tornado Cash developer’s legal defense.
