Tornado Cash Thrives Despite U.S. Sanctions
Tornado Cash, a popular cryptocurrency mixer operating on the Ethereum network, has shown impressive resilience despite facing sanctions from the U.S. Treasury in August 2022. According to blockchain intelligence firm Arkham, over $77 million in assets have moved through Tornado Cash’s contracts on the Ethereum mainnet in the past month.
The Crypto Mixer Continues to Operate
Tornado Cash operates on multiple blockchain networks and allows users to obscure transfers of various cryptocurrencies. While it experienced a significant decline in assets and transfer volume after the imposition of U.S. sanctions, the platform quickly recovered. Currently, Tornado Cash has a total value locked (TVL) of approximately 118.3K ETH, equivalent to around $187.9 million.
Hackers Utilize Tornado Cash for Money Laundering
Tornado Cash faced sanctions due to allegations that it facilitated money laundering for North Korea’s Lazarus Group. The platform positions itself as a financial privacy tool, but the U.S. Treasury claims it enabled illegal transactions, including laundering $445 million connected to the Lazarus Group. Although a lawsuit aimed to reverse the ban on Tornado Cash, the court ruled in favor of the U.S. Treasury.
The Complexities of Regulating Decentralized Services
The sanctions against Tornado Cash highlight the challenges of regulating decentralized services. Its open-source nature allows developers to create similar platforms, making it difficult for authorities to completely shut down such services.
Hot Take: Tornado Cash Defies Sanctions and Sustains Strong Activity
Despite facing sanctions from the U.S. Treasury, Tornado Cash continues to thrive as a leading cryptocurrency mixer on the Ethereum network. The platform has witnessed a significant flow of assets, with over $77 million passing through its contracts in the past month alone. Although the sanctions initially caused a decline in assets and transfer volume, Tornado Cash quickly recovered and currently holds a substantial value locked of approximately 118.3K ETH. However, the platform’s involvement in facilitating money laundering has drawn scrutiny and legal action. The complexities of regulating decentralized services pose ongoing challenges for authorities, as similar platforms can easily emerge.
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