The United States of America Treasury Department has removed cryptocurrency mixer, Tornado Cash from its blacklist. According to the statement by the Treasury on Friday, the Office of ForeignAssets Control (OFAC) removed a host of smart contracts addresses on the Ethereum network belonging to Tornado Cash from the sanction list. Â
The removal surfaced in response to a January verdict by the US District Court for the Western District of Texas that overturned the ban on the crypto mixer. More so, the court established that it is beyond the jurisdiction of the OFAC to ban Tornado Cash because it doesn’t belong to a foreign individual.
However, the latest development is a significant relief for crypto mixer developers who are facing strong reprimand for their innovations. Like Tornado Cash, another blockchain privacy tool, Samourai Wallet suffered a clampdown by the US government after the Department of Justice arrested two top executives of the firm.
Then, there were growing concerns among crypto enthusiasts about what they perceived as an attempt to curtail the growth of the industry. By that, the removal of Tornado Cash from the OFAC blacklist is a huge relief and significant progress for the sector.
Timeline of the OFAC ban on Tornado Cash
Recall that in August 2022, the OFAC banned Tornado Cash indicating that the secrecy tool has helped North Korea-backed hacking syndicate, Lazarus Group to launder stolen funds. The agency said the Ethereum-based solution assisted the group in laundering more than $455 million.
In total, the agency said Tornado Cash has helped conceal the movement of more than 1.7 billion since its launching in 2019. As a result of the ban, a Dutch court sent Alexey Pertsev to five years, citing how the tool aided the illegal transfer of massive funds.
As reported, six users of the privacy tool approached the court of appeals, arguing that blockchain transactions are traceable thus compelling some users to desire more privacy. However, despite how the court overturned the ban in January, one of the developers of the crypto mixer, Alexey Pertsev remained in police custody.
The court ruled that Pertsev as one of the key developers of the tool could have assisted in preventing the huge illicit movement of funds. Thereafter, the following month, Pertsev gained his freedom from his house arrest as the Ethereum Foundation supported the developer’s defense with a $1.25 million donation.