US Authorities Lift Sanctions on Tornado Cash Crypto Mixer
The US Department of the Treasury has announced the removal of sanctions from the decentralized cryptocurrency mixer Tornado Cash. Previously, authorities had linked the service to North Korean hackers from the Lazarus Group and the laundering of hundreds of millions of dollars.
Sanctions against Tornado Cash were first imposed in August 2022. At that time, the Office of Foreign Assets Control (OFAC) at the US Treasury stated that, since its creation in 2019, more than $7 billion had been laundered through Tornado Cash. The agency claimed that the operators failed or refused to implement “effective controls designed to prevent regular money laundering by bad actors.”
Reports indicated that North Korean hackers from the Lazarus Group actively used the mixer for their operations. Allegedly, funds stolen in the Harmony hack (about $96 million), assets obtained from the compromise of the Ronin blockchain (closely tied to the popular NFT game Axie Infinity, with over $600 million stolen and $455 million laundered through the mixer), and around $7.8 million from the Nomad bridge hack all passed through Tornado Cash.
Additionally, the service was reportedly used by other criminals to make tracking stolen funds more difficult. This included incidents following the hacks of the Audius music blockchain platform, the Beanstalk DeFi platform, the Uniswap decentralized exchange, and the Arbix Finance exit scam.
Court Ruling and Treasury Statement
However, last week a court document was published revealing that the US Fifth Circuit Court of Appeals ruled that OFAC had “exceeded its authority” when it imposed sanctions on the crypto mixer.
“We remain deeply concerned about large-scale government-backed hacking and money laundering campaigns aimed at stealing, acquiring, and using digital assets for the benefit of the Democratic People’s Republic of Korea (DPRK),” the US Treasury said in a press release. “The Treasury remains committed to using its authorities to expose and disrupt attempts by bad actors to profit from their criminal activities through the use of digital assets and this ecosystem.”
The Treasury stated that Tornado Cash and more than 100 Ethereum addresses were removed from the sanctions lists after reviewing new legal and policy issues that arose with the application of restrictions in a rapidly evolving technological and legal environment.
Background on Tornado Cash Founders
In August 2023, the US Department of Justice charged two Tornado Cash founders, Roman Storm and Roman Semenov, alleging they helped criminals launder over $1 billion in cryptocurrency. Storm was arrested in Washington on the day the charges were announced, while sanctions against Semenov were imposed in absentia.
Alexey Pertsev, the third co-founder of Tornado Cash and one of the main developers of the mixer, was arrested in the Netherlands in 2022. Last year, he was sentenced to 64 months in prison for participating in laundering over $2 billion in cryptocurrency.
However, on February 7, 2025, Pertsev was released from custody under the condition of electronic monitoring. The Tornado Cash co-founder wrote that this would allow him to “work on an appeal and fight for justice.”
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