The Department of Treasury has lifted sanctions against Tornado Cash, Ethereum -Based Smart Contract Mixer, following a number of legal defeats and administrative challenges.
“Based on the administration’s review of the new legal and political issues raised by the use of financial sanctions against economic and commercial activity that occurs in developing technology and legal environments, we have exercised our discretion to remove the financial sanctions against Tornado Cash, as reflected in Treasury’s Monday archiving in Van Loon against Department of Department,” Department.
Quick overview of the Tornado cash story
Tornado Cash was launched in 2019 as a decentralized protocol to improve transaction privacy at Ethereum.
In August 2022, the mixer was added to the Office of Foreign Assets Control (OFAC) list, which includes sanctioned persons and units. US law enforcement claimed that Tornado Cash relieved over $ 7 billion in money laundering, including funds linked to North Korea’s Lazarus group.
This led to a ban on American persons who used service and lawsuits against its co -founders, Roman Storm and Roman Semenov, which in 2023 was indicted for money laundering money tied to over $ 1 billion in transactions.
Six Tornado Cash users, supported by Coinbase, defendant the Treasury and challenged the sanctions.
A federal court in Texas gave up in January 2025 that the smart contracts could not be sanctioned, a decision maintained by the fifth Circuit in November 2024.
Today, the Treasury officially lifted the sanctions with reference to developing legal and technological considerations, although it expressed concern for continuous illegal crypto activities and reinforced its intention and authority to continue the DPRK sanctions.
Excitement continues
Nevertheless, the treasury reinforced its intention to enforce sanctions against Democratic People’s Republic of Korea (DPRK), an ongoing source of geopolitical excitement considering the recent $ 1 billion+ hack from ByBT, which argued to be executed by Lazarous, a hacking group with DRKP.
“We remain deeply concerned about the significant state-sponsored hacking and money laundering of money aimed at stealing, acquiring and inserting digital assets to the Democratic People’s Republic of Korea (DPRK) and the Kim regime,” the agency said.
“Treasury will continue to monitor closely any transactions that may benefit malicious cyber actors or DPRK, and American persons must exercise caution before being included in transactions that pose such risks.”
Although the canceled sanction seems to be good news for financial confidentiality software developers, it is too early to tell what this means for the Bitcoin and Crypto industry in general, or whether it will have an impact on upcoming litigation such as the ones against Samurai designer developers.
“Digital assets present enormous opportunities for innovation and value creation for the American people,” said Secretary of the Treasury Scott Bessent. “Securing the digital asset industry from North Korea abuse and other illegal actors is important for establishing US leadership and ensuring that the American people can benefit from financial innovation and inclusion.”