Is Crypto Market Regulation Facing New Challenges as Tornado Is Sanctioned?
Last week, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned virtual currency mixer Tornado Cash, which has been used to launder more than $7 billion worth of virtual currency since its creation in 2019.
Roman Semenov, one of the co-founders of Tornado Cash, said that his account on developer platform GitHub was suspended after the U.S. Treasury Department approved the privacy protocol.
Not only that, but Circle, the USDC issuer, has frozen more than 75,000 USDC worth of funds associated with 44 OFAC-approved Tornado Cash addresses on the SDN list. For example, one of the addresses marked by the Tokenview explorer as “Tornado.Cash: L1 Helper,USDC Banned Address” :
Tornado Cash is a virtual currency mixer that operates on the Ethereum blockchain and indiscriminately facilitates anonymous transactions by obfuscating their origin, destination, and counterparties, with no attempt to determine their origin. Tornado receives a variety of transactions and mixes them together before transmitting them to their individual recipients. While the purported purpose is to increase privacy, mixers like Tornado are commonly used by illicit actors to launder funds, especially those stolen during significant heists.
Both Circle, the USDC issuer, and Tether, the USDT issuer, can freeze stablecoin transfers between Ethereum and Tornado.An address blacklisted by Circle/Tether means that it cannot be traded for the asset.
According to Tokenview data, Tether has totally frozen 652 addresses, according to Tokenview; Circle totally froze 81 addresses. In 2022 (to date), Tether has frozen 135 USDT addresses; Circle froze 56 USDC addresses.
Once a USDT/USDC address is frozen, it means that transactions related to USDT/USDC assets cannot be conducted at that address. Ethereum is an open financial system, and the blockchain records all the addresses and their money flows. In order to improve the security of user’s assets, Tokenview provides the function of displaying the frozen list of USDT/USDC to facilitate users to query the risk degree and fund flow of interactive addresses.
Tokenview USDT/USDC blocked addresses lists：https://eth.tokenview.io/en/banned