News of Tornado Cash ban
- Many of us woke up to News about the US Treasury Department Press Release regarding their sanctions against Tornado Cash and ban of anyone conducting transactions using Tornado Cash with the geographic limits of the United States of America.
- If you are like me, this News raised more questions then answers.
- So let’s start with some basic information.
Tornado Cash is ..
A.) a service that helps some cryptocurrency owners protect their anonymity by scrambling information trails on the blockchain.
sourceB.) a mixer, a protocol designed to pool funds in an effort to obfuscate the origin of any given transaction.
sourceC.) a virtual currency mixer that launders the proceeds of cybercrimes, including those committed against victims in the United States.
sourceD.) All of the above.
If you picked D.) you were correct!
The News Media reports that US Treasury Banned Tornado Cash; What does that mean?
What was the ban?
Today, Treasury is sanctioning Tornado Cash, a virtual currency mixer that launders the proceeds of cybercrimes.
As a result of today’s action, all property and interests in property of the entity above, Tornado Cash, that is in the United States or in the possession or control of U.S. persons is blocked and must be reported to OFAC.
In addition, any entities that are owned, directly or indirectly, 50 percent or more by one or more blocked persons are also blocked.
All transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons are prohibited unless authorized by a general or specific license issued by OFAC, or exempt.
I have pasted the Press Release and Formal Statement below.
My thoughts about what this means.
- ‘It was not immediately clear how this effected me and as I understood the ban better I began to wonder how it would be enforced.
- Surprisingly, the very statement released by the US Treasury Department revealed or at least suggested weakness on the part of the US Government and perhaps their inability to stop the activities of Tornado Cash.
- As an example the statement listed several high profile crimes where the stolen funds were laundered by Tornado Cash.
- The listing of these crimes began several years back and the long list only ended a few weeks ago.
- No where in the statement did the US Treasury Department indicate that they had been able to stop, apprehend, interfere or slow any of these activities.
- This Press Release also threatened to impound any assets of Tornado Cash, but no seized assets were listed or indicated.
- The statement seems to have raised alarms amongst many cryptocurrency affictionados, who believe their rights to privacy are threatened by this ban, and their concerns about new requirements it’s new demands on reporting information on all people you have financial transactions with…
- Some people have gone so far as to start sending Ethereum to famous people whose Ethereum wallet addresses have been made public, from Tornado Cash. This points out the inability of people to provide identification of people sending them money, and shows that the US Government can’t stop Tornado Cash.
- ‘At this point it’s useful to point out that the main tool of a government is the ability to seize your bank accounts, your property and your person.
- But when your an anonymous developer and/or a group of smart contracts on the internet, there’s very little a government can do without shutting down the internet.
- Some see this as the first attempt by the government to control cryptocurrency transactions and demand transaction information.
- But since the government is asking for information that most people can’t provide, it is an area of the law where charges and convictions are routinely dismissed by judges in court, and expose the government to counter suits for frivolous prosecutions and libel.
- Some think this Press Release is more of an admission of ignorance, and helplessness. And not a sign of knowledge or resolve.
- What do you think?
