As was earlier covered, the US Department of Treasury, via the Office of Foreign Assets Control (OFAC) has sanctioned crypto mixer Tornado Cash.
Mixers are used to boost the privacy of crypto transacts but may also be used to obfuscate nefarious activity.
Coin Center, a leading digital asset advocacy group, has issued a statement in light of the sanctions applied to Tornado. In a blog post, Coin Cener said this time its different as Tornado is being added to the sanctions list but a smart contract is a robot, not a person – and thus no individual is being sanctioned by the mixing machine.
To quote Coin Center:
“Even when Bitcoin addresses have been added to the SDN list in the past, the rationale for those additions is that they are under the control of persons who are engaged in sanctioned activities and the address is simply another alias for the sanctioned person. If it was the Treasury Department’s intent to sanction some group of persons who actively maintain or promote Tornado.cash, that would be one thing. This SDN entry, however, merely identifies a URL and a series of Ethereum contract addresses. Sanctioning a tool that is not an alias of any person meriting sanction is substantially different from typical usage of the SDN list. It is a ban on a technology and not a sanction against a person.”
Coin Center claims that OFAC’s actions “raises heightened constitutionality concerns” as it is in effect a ban on an open source tool.
As the list of affiliated addresses used by Tornado has been posted, some people on Twitter have noted that Circle has now banned these addresses, and thus if Tornado has your USDC – you probably will not be able to get your money out.
start curating some interesting takes here:
You might want to get your USDC out of Tornado – though I am not sure if you are allowed to touch it at this point? 🤔https://t.co/eCXgftgRnz
— Martin Köppelmann (@koeppelmann) August 8, 2022