The United States Department of Treasury removed economic sanctions against Tornado Cash, a crypto protocol known for privatizing onchain transactions, after sanctioning the platform nearly three years ago.
The Treasury Department removed Tornado Cash and several associated digital wallet addresses from the OFAC specially designated nationals (SDN) list, according to a Friday release.
The move comes after an appeals court ruled that the Office of Foreign Assets Control (OFAC), an agency within the Treasury, exceeded its authority by sanctioning Tornado Cash in November 2024, and a U.S. Disctrict Court in Texas ordered the sanctions to be reversed in January.
OFAC sanctioned Tornado Cash in August 2022 after claiming cybercriminals, particularly those tied to North Korea and its hacker ring, the Lazarus Group, used the platform to launder cryptocurrency procured from illicit activity. The U.S. government, along with Japan and South Korea, stated that North Korea uses crypto thefts to illegally fund ballistic missiles and other weapons of mass destruction projects.
Tornado Cash obscures the origins of cryptocurrency transactions by pooling together and redistributing funds in a process known as "mixing."
"Digital assets present enormous opportunities for innovation and value creation for the American people,” said Secretary of the Treasury Scott Bessent in a statement. “Securing the digital asset industry from abuse by North Korea and other illicit actors is essential to establishing U.S. leadership and ensuring that the American people can benefit from financial innovation and inclusion.”
Lazarus Group has been tied to numerous high-profile crypto exploits — most recently, the $1.4 billion Bybit hack, but also the $600 million exploit of the Axie Infinity sidechain Ronin and the $28 million hack of the crypto exchange Deribit.
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