Sanctions To USDC And ETH Addresses Linked To Tornado Cash
✍️ 10 August, 2022 - 17:41 👤 Editor: Jakub Motyka
- The Department of the Treasury has added several cryptocurrency addresses to its OFAC list.
- All are related to the controversial mixer Tornado Cash.
- Is this the end of blockchain privacy?
The United States Department of the Treasury has added several cryptocurrency addresses linked to Tornado Cash to its OFAC list. According to the announcement made on Monday, OFAC banned US citizens from using more than 44 USDC and ETH addresses connected to the controversial mixer app. This may be related to their participation in different hacks and exploits in the DeFi world.
For those who don't know, Tornado Cash is a privacy mixing application for the blockchain. Through a series of random transactions, it allows to break the link between the issuing wallet and recipient. In this way, it becomes practically impossible to track the location of a cryptocurrency, which is why it is often used for money laundering and tax evasion.
What Do The Treasury Penalties Mean For Wallets Tied To Tornado Cash?
The actions for non-compliance with the sanctions range from fines of USD 50,000 to 10 million, up to 10 to 30 years in prison. For this reason, some important companies in the crypto market have begun to move after Treasury Department announcement.
A clear example is Circle, the company issuing the stablecoin USD Coin (USDC), which froze more than 75,000 USDC of funds linked to the 44 addresses linked to Tornado Cash. Tether, the parent of USDT, and other issuers are expected to act accordingly. Similarly, various platforms such as Bitgo, Alchemy, and Infurahave started blocking access to Tornado Cash.
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