Since its establishment in 2019, the protocol reportedly laundered $7 billion in virtual money, the Treasury claimed. This includes $455 million taken by the North Korean-backed Lazarus Group.
David Carlisle, who leads policy and regulatory relations at crypto asset compliance business Elliptic, said, “The United States will not accept the argument that mixers are impartial services.”
Carlisle said that many exchanges would likely be exposed to extensive Tornado Cash activity and must be cautious to avoid executing unlawful transactions.
Industry resistance
The Coin Center, a blockchain policy advocacy organisation, expressed constitutional concerns over the approval of Tornado Cash.
Coin Center’s executive director Jerry Brito and research director Peter Van Valkenburgh noted, “This particular application of OFAC raises heightened constitutional issues since it is not a prohibition on a single non-US person’s capacity to utilise the financial system, but rather a ban on almost every American’s ability to use a specific open source software tool.”
Coin Center also expressed worry about how the United States would implement these sorts of penalties. Due to the characteristics of blockchains, any American might receive Tornado Cash-related funds. A violation might occur without affiliation or purpose without the ability to refuse transactions.
Many business executives are scurrying to assess the consequences of the sanctions announcement. “Andrew Thurman of Nansen said, “Like everyone else, I had no idea that a piece of code could be sanctioned.
Hudson Jameson, an independent blockchain consultant who previously worked for the Ethereum Foundation, stated, “The implications for those developing privacy solutions on Ethereum could be enormous, as governments and regulatory authorities are notoriously behind technological innovation and unable to grasp it.” “Privacy is essential so that you are not monitored for metadata or improperly lumped with DPRK-related actions since a government cannot determine Tornado Cash’s code.”
Also Read: A Morgan Stanley Job Listing Hints At Big Crypto Initiatives
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
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