The U.S. Department of the Treasury has canceled restrictions on Tornado Cash, a decentralized cryptocurrency mixer, effectively allowing Americans to utilize it.
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This overturns the Office of Foreign Assets Control’s (OFAC) ruling from August 2022, which blamed the platform for helping money laundering, including deals connected to North Korea’s Lazarus Group.
Introduced in 2019, Tornado Cash is an Ethereum-based agreement that enhances transaction privacy by hiding the sources and destinations of cryptocurrency transfers.
While it serves individuals looking for monetary privacy, it has additionally been used by criminals to launder unlawful funds.
The Treasury Department asserted Tornado Cash was applied to launder over $7 billion in virtual currency, including $455 million taken by the Lazarus Group.
Treasury Under Secretary Scott Bentson mentioned that virtual assets provide a huge chance for innovation and value creation for the American population. Protecting this sector from abuse is critical to establishing U.S. leadership and ensuring Americans can profit from monetary innovation.
Critics contended that penalizing open-source software violated free speech and technological innovation. As a result, a group of Tornado Cash users, supported by Coinbase, submitted a legal action challenging the penalties.
In November 2024, a federal appeals court decided in favor of the complainants, declaring that the Treasury Department had exceeded its power.
The judiciary highlighted that, in accordance with national legislation, the meaning of “belongings” does not contain Tornado Cash’s intelligent agreement coding, since it is essentially unchangeable and therefore not subordinate to the International Emergency Economic Powers Act (IEEPA).
Judge Don Willett mentioned that even though the tech could possibly be abused, it is the duty of Congress, not the judiciaries, to revise the relevant legislations. Ice Open Network and ChainGPT Reveal Innovative Web3-AI Alliance
