A Tornado Ban

Market Meditations | August 9, 2022

The US Treasury Department has sanctioned Tornado Cash for allegedly helping launder more than $7 billion worth of virtual currency since its creation in 2019.

The American government has also claimed that Tornado Cash assisted the North Korean hacking syndicate linked to many high-profile hacks, including those against the Ronin and Harmonybridges.

  • On the August 8th, Tornado Cash was added to the Office of Foreign Asset Control’s (OFAC) list of Specially Designated Nationals and Blocked Persons (SDN List).
  • The OFAC administers and enforces sanctions against high-profile individuals, including major international terrorists, drug trafficking kingpins, and the financial/political elite of certain countries deemed hostile to American interests.
  • It is illegal for any US person to engage in trade, economic transactions, or “other dealings” with any person, company, or country on the SDN List, which now includes Tornado Cash.
  • At least 75,000 USDC have been frozen due to blacklisting Tornado Cash wallets, according to Ethereum blockchain explorer data.
  • This is not the first time Centre has blacklisted USDC wallet addresses due to law enforcement or regulatory action. In July 2020, the consortium froze about $100,000 in USDC based on ‘a law enforcement request.

According to Dune Analytics, there are currently 81 USDC addresses and 695 USDT addresses that have been banned at the smart contract level.