The US Treasury on August 8 sanctioned 38 Ethereum addresses and 6 USDC addresses related to Tornado Cash. Tornado Cash has reportedly laundered more than $7 billion, including cryptocurrencies from hacker organizations like Lazarus Group and the recent DeFi attacks.
Being blacklisted means all US companies and individuals will be banned from interacting with and using Tornado Cash or they will be punished. Soon after, Circle, the issuer of USDC stablecoin in the US, froze about 75,000 USDC belonging to Tornado users. Among these addresses is Tornada Cash’s USDC pool, which means that users will not be able to withdraw their funds.
Although Circle did not release the full list of frozen addresses, their representative said: “Circle is a regulated company and conforms to sanctions compliance requirements. We have addressed the sanctions and blocked the addresses associated with OFAC’s Tornado Cash designation.”
Despite the decentralized nature of the crypto sector, Circle can still prevent USDC in any address from being transferred out, making the stablecoins held therein useless. This is not the first time Circle has blocked wallet addresses at the request of law enforcement. In July 2020, the firm once froze 100,000 USDC.
Tornado Cash’s website has been pulled down, Github page was also inaccessible. Tornado Cash founder Roman Semenov revealed his GitHub account has been suspended. The majority community has negative attitudes to this news. Many experts believe Tornado’s case is not really serious enough to be blacklisted because in fact, it is an open-source decentralized platform and does not intentionally collude with hackers to launder money. They fear this will set a bad precedent that could lead the government to enact many similar bans in the future, especially with major crypto exchanges.
Tornado Cash’s TORN token has lost more than 30% of its value over the past 24 hours because of the US sanctions.
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