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 the Treasury’s Office of Foreign Assets Control (OFAC) exceeded its authority by sanctioning Tornado Cash’s smart contracts.
Court Ruling Leads to Removal
The appeals court stated that Tornado Cash’s immutable smart contracts—privacy-focused software code—are not the property of any foreign national or entity. Consequently, OFAC lacked the legal grounds to impose sanctions on these contracts.
In response, OFAC has now removed several dozen Ethereum blockchain addresses associated with Tornado Cash from its sanctions list.
Market Reaction
The news triggered a significant market reaction, with Tornado Cash’s native token (TORN) surging approximately 60%. 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
OFAC initially sanctioned Tornado Cash in August 2022, alleging the platform facilitated money laundering activities, including funds stolen by North Korea’s Lazarus Group. The Treasury claimed Tornado Cash had processed over $7 billion in illicit funds since its launch in 2019.
In 2024, Dutch courts sentenced Tornado Cash developer Alexey Pertsev to 64 months in prison for money laundering. Pertsev was later released on house arrest 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.
- Appeals court ruled OFAC exceeded authority by sanctioning smart contracts.
- Tornado Cash token (TORN) price surged 60% after the announcement.
- Original sanctions related to allegations of money laundering involving North Korean hackers.
- Ethereum Foundation supports developer Alexey Pertsev’s legal defense.
