Unveiled: US Treasury Reverses Tornado Cash Ban—Americans Can Now Access!

U.S. Treasury Lifts Sanctions on Tornado cash

The U.S. Department of the Treasury has removed sanctions on Tornado Cash, a decentralized crypto mixer. This decision legalizes its use for Americans, reversing the August 2022 sanctions.

Tornado Cash, an Ethereum-based protocol launched in 2019, enhances transaction privacy. It lets users hide the origins and destinations of thier crypto transfers. However, it has been misused for money laundering, including by North Korea’s Lazarus Group.

The Treasury had claimed Tornado Cash laundered over $7 billion in virtual currency. Treasury Secretary Scott Bessent said, “We must protect digital assets while preventing misuse.”

The Office of Foreign Assets Control had previously accused Tornado Cash of facilitating money laundering. The platform, launched in 2019, allows users to obscure crypto transaction details. While it offers privacy, it was exploited for illicit activities.

Sanctions were lifted after a federal appeals court ruled in favor of Tornado Cash users. The court stated that the Treasury overstepped its authority. The ruling highlighted the tension between financial privacy and regulatory oversight.

Key points include:

• Treasury Department reverses 2022 sanctions.
• Platform accused of laundering $7 billion, including $455 million stolen by Lazarus Group.
• Decision supports digital asset innovation and protects free speech.

This move supports digital asset innovation while preventing misuse.

Critics argued that sanctioning open-source software violated free speech.In response, Tornado Cash users, backed by Coinbase, filed a lawsuit. In November 2024, a federal appeals court ruled in favor of the plaintiffs, stating the Treasury overstepped its authority.